May 1, 2017
The battle lines are drawn: Miller Coors is suing HCL for $100 million after a catastrophic SAP implementation. A few years back, Oracle and Montclair State University ended up in a two-year legal battle over a $20 million cost overrun for a proposed software implementation.
In the annals of enterprise software, these are just a few of the horror stories. In the past decade, there have been countless failures: Nike’s woes include $100 million in sales lost due to unforeseen complications with its supply chain software. The U.S. Air Force pulled the plug on an enterprise software project after spending a billion dollars.
According to McKinsey, on average, large IT projects are 45 percent over budget. In addition, 17 percent of IT projects are executed so poorly that they threaten the very existence of the company. The results are decidedly mixed.
Finger pointing, mud-slinging and tremendous failures abound. Let’s face facts: enterprise software is complex and expensive. Countless projects hit the skids every year. Absolute chaos can become the norm, and the cost to businesses can be calculated in human terms — and the bottom line.
Every company, no matter how large or small, grapples with finding the most effective operational systems for their company. It is one of the most critical decisions top management must make.
We know these platforms will enable our businesses to complete jobs, manage inventory, plan for production, keep track of manufacturing processes, manage staff, accounting, and other routine but critical tasks. The systems provide sophisticated solutions that result in better analytics, higher productivity, smiling satisfied customers, revenue generation, and cost savings.
Sounds simple, right? Software will solve everything. A magic bullet or so we think. Enterprise software requires time and effort – as well as human and financial capital – to adopt. There is no such thing as plug and play. In addition, it is not a panacea for operational or deeper management issues that may exist in our companies.
Lots of companies sell all sorts of solutions – Oracle, Microsoft, Salesforce, and more. They promise the moon. Your company purchases this solution, but it doesn’t solve the issues – in fact, it creates more. You complain and say: “What is going on? Your technology is making my job harder, customers are getting angry because your platform isn’t seamless, and I am spending a lot of money.”
LOOK AT THE PROBLEM FIRST
What exactly is wrong here? Companies want a quick fix. After all, with an enterprise system, companies are supposedly creating an automatic workflow, creating efficiencies by adding technology into their processes.
However, technology integration requires people. Leaders forget that companies consist of three legs: people, process and technology. Just because leadership selects technology solutions doesn’t guarantee success. When a company implements a new system, leadership assumes that they can take existing processes and “map” them onto the new system. However, this implementation may not always solve problems. In fact, if the approach is the wrong one, the result is called “automating current frustration.” Executives cannot take broken processes and map them onto a new system and hope for success.
In addition, companies may purchase the wrong system, spending tens of thousands and sometimes millions of dollars. Witness the beginning of finger pointing between companies and vendors. More wasted resources.
How can this be avoided? Examine the problem from day one. More importantly, begin with the end in mind. What should the workflow look like? What is the optimal customer technology journey – are there external or internal vendors, customers, employees? Clients? Some or all? It is critical to map the journey out. Look at IT from a customer-centric approach. What is their pain point? More importantly, where can innovation skyrocket business processes?
For example, Joe in human resources should be using an applicant tracking system to log progress on new hires. Sarah in the marketing department shouldn’t be using 15 different tools to do her job. Jim in operations should be using a dashboard to track his KPIs as opposed to disparate spreadsheets.
Taking it to a new level would be ensuring KPIs are set, and that everyone has these unified tools at their fingertips. What wisdom can be extracted?
ONE SIZE DOES NOT FIT ALL
When companies map the customer’s technology journey, they can use that to inform their decisions on technology purchases. Which platform is appropriate? This prevents what I have observed in the past – seeing managers that say, “All my competitors are using ERP solution X, so it must be the right one.”
This is lazy thinking. I can tell you that I have seen many six or seven-figure, and even nine-figure business system implementations that go awry. Once I saw a health care company spend $100 million on a solution that one was not implemented correctly — and employees did not use it. Management didn’t consider the human aspect of managing change when deploying a new system.
DO YOU REALLY NEED THAT FERRARI?
That red Ferrari is sexy, shiny, and goes to 0-to-60-mph in less than three seconds. But do you need to go that fast, and do you want to pay that much just to get somewhere?
The same can be said for your technology decisions. Know what your company and customer’s real needs are. Problems arise when the optimal customer journey is not mapped, the wrong technology system is chosen, and then implementation goes badly. At best, companies lose time and money; at worst, they lose customers, revenue, and reputation – and end up filing lawsuits.
Companies throw the integrators under the bus: they are boutique shops that might not have the bandwidth or expertise to help, or they are the big guns that can’t give the attention that is needed and deserved.
MISSION CRITICAL: A CHAMPION
An absolute must: putting the right advocacy inside your company – a CTO provides this, especially from a business and technology perspective. On the tech side, you need an informed advocate that understands how the integration process works. Both the business and technology leadership needs to drive change management – or risk failure.
A second issue at hand: employee use. Remember, I said there is no magic bullet – people are creatures of habit. We must educate, inform and let employees know that the benefits of the new system will allow them to do their jobs more efficiently. We need to manage their uptake of the system. Are we always checking in? It is not enough to “do it right” and then flip the switch, hoping the lights stay on. Are we bringing our employees along on the journey?
There is always room for improvement. A trusted counselor can organize the process. Are they listening, getting feedback, and driving change? This is how to extract true value and maximize their investment of time, energy and money.
THE JOURNEY NEVER ENDS
Just when management thought it was done — integration complete — they learn they cannot simply pass it on and hope the system works. Ongoing support is critical – what works today may not work tomorrow. Not being happy with the status quo is a huge part of this – as the system grows, processes need to evolve. What is working, and what isn’t?
In short, the key is to constantly poll, prioritize and implement as the process moves forward. Successful implementation is not the result of chance, but of a well laid out, systematic approach. Remember the famous quote by the world’s greatest inventor and innovator Benjamin Franklin: “If you fail to plan, you are planning to fail.” The choice is yours.