How do we decide whether to keep, replace, or enhance our systems?

Great systems can add tremendous value to your business. They make processes more efficient, control risk, deliver a better customer experience, and produce superior data and insight. Poor systems are inconvenient and sometimes devastating – demoralizing employees with red tape, offering a difficult and frustrating user experience, leaving data fragmented and inaccurate, and creating confusion with customers.

If your systems aren't adding the value they should, what should you, as a leader, consider when making decisions to keep, replace, and enhance your systems that maximize the possibility of success?

Systems are a lot more than just technology and business processes. They are behavior patterns, incentives for collaboration, institutionalized cultural norms, and tacit expectations for how your people should be efficient and effective. Successful systems account for:

  • Psychology - why do people think this way?
  • Sociology - how are groups of people behaving?
  • Tools - what do we use to do things better?
  • Management science - how do we measure what's happening?

They are of course also rooted in business science, mathematics, and core technology.  They amplify both desirable and undesirable behaviors and, in turn, either accelerate or hold back your business growth.

The success of your business systems will be determined by three main factors:

  1. How well the technology and processes fit your business strategy
  2. The quality and capabilities of the technology
  3. How well your users adopt

Understanding where your business stands with each of these will help you choose the best path forward.

For purposes of this article, “systems” refers to both the business processes and the technology used to support them.

Fit to the business

The basic question is: did you choose a reasonable solution up front? There are few legitimately bad software packages and also few that will exactly fit your business processes without modification. The question is not “Is the system perfect?” but rather “Did we make the right trade-offs and decide to change the right processes when we selected (or designed) the software?”

To be clear – if a system failure is because of a major deficiency in this area, you will probably need to replace it. If the deficiency is minor, see section 2 for a few ways to address it.

How do you ensure business fit?

A rigorous system selection will force your team to collaboratively decide on the most important requirements up-front and agree on major process changes. Systems projects are a litany of trade-offs – what needs to be perfect, what areas can you change your process to fit the system, and what processes are worth spending more effort and money on (e.g. customizing the system or purchasing a separate bolt-in). The thoughtfulness of these trade-offs are what will set the implementation up for success.

Do not skimp on the selection process. Some of the most expensive implementations are the result of the cheapest selections. Analyst reports will tell you general quality and focus of products, but not how appropriate they are for your business. You need to get inside your business, uncover its operating priorities and biggest value drivers, and match them with the systems you are considering. This takes a little bit of money and a lot of time from your best people – but it’s worth it.

Technology and Functionality

The base technology is usually fine – if it doesn’t “work” it can usually be fixed with some professional help. Custom software can be more challenging or more expensive, but these systems can be fixed as well. The good news is that in the new world of enterprise technology, there are many more options than those offered by your primary vendor to support your most valuable areas, mitigate major risks, or make a challenging system more palatable for your users.

Example: ERP

ERP systems are sprawling technologies that do a lot and ask a lot of their users. The accepted approach to ERP used to be to standardize business processes to the functionality of the package, adjusting only when absolutely necessary. This maximized the vendor’s ability to support the solution and tried to concentrate investment in the most important areas.

This isn’t necessarily the case anymore. There are more niche solutions, software is easier to build, and most platforms play nicely with each other. It’s more important to choose the right ecosystem of technologies that give your business flexibility and in the aggregate add the most value than it is to standardize on a specific package.

If your platform is mostly successful but failing in a small number of critical areas, is it possible to simply plug those holes with secondary applications? This is often easier, less disruptive, less expensive, and more effective. Odds are good that you can avoid a wholescale replacement.

In these cases, you should perform selection processes for add-ons where the base system doesn’t fit the business. This can include features like subscription billing, customer support, portals, analytics and reporting, or workflow applications. Not all packages do these things well, but there are many third-party products that will play nicely with your other systems and dramatically improve these areas.

User Adoption

Your users will ultimately determine the success of the solution. Assuming you made acceptable trade-offs, made reasonable assumptions, and have a fundamentally sound, supportable ecosystem, your users are responsible for the consistency, efficiency, and innovation the new systems drive.

If you don’t think your current systems are adding value, ask yourself: How much is due to poor technology and how much is due to employees resisting using it correctly?

Fixing user behavior is challenging. Most of it is set in motion during the implementation itself. When a system has been deemed a failure, it can be hard to recover. Good project managers will help manage these user expectations in the immediate aftermath of an implementation but this can only last for so long. If things spiral in the months following a go-live, sometimes this can be a lost cause.

So what do you do?

It depends on how bad it is. Sometimes a few loud user groups end up coloring the organization’s perception of the entire system. You need to put a laser-focus on these groups, solve their problems while giving them ownership, and slowly bring them back into the fold. At the same time you need to roll-out incremental improvements demonstrate momentum to improve the business.

If the system isn’t being adopted because people don’t understand it, this can be easier. Start with aggressively pursuing stakeholder buy-in from senior leadership. They need to re-inforce with their staff how important it is to use the system as intended and to identify additional training requirements. This needs to be combined with a rigorous enhancement process that uses stakeholder feedback to improve the system.

If this is the core problem, have an independent professional work with your users on assessing the source of the system’s weaknesses. They will cut through the noise and the politics and be able to tell you the heart of the problem. This is very difficult for anyone who had a stake in the original process.

And remember that the users’ complaints may be right: Maybe the system was the wrong choice or was not implemented well. Given that they have the most detailed view of the solution, they may have valid points in this area. In these cases, the details matter. Understand the specific issues instead of the broad complaints and have someone help you understand if they can be resolved or not.

Remember: it doesn’t matter what the users should be doing, it matters what they are doing. Blaming users doesn’t accomplish anything while giving them resources, listening to them constructively, and supporting them accomplishes a great deal.

In Summary

If you feel your business needs technology changes, look at your systems holistically. Understand the processes, the system possibilities, and the cultural needs of your users. Ensuring all of these elements directly support your growth strategy will greatly improve your business and ensure you can be successful as you grow over the long-term.

Most of all, get an independent opinion. It may end up saving you a lot of money and aggravation, and will certainly help confirm your best path forward.

Stephen Ronan

Ronan Consulting Group, 06907

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