Although our company focuses on ERP selection, implementation, and organizational change management, many of our clients ask for help defining their IT strategies as a precursor to a broader ERP software selection process. Since it is difficult to choose an ERP vendor without having a clear IT strategy in place, this approach makes perfect sense.  A lot of legwork needs to happen prior to defining an ERP strategy.

Five Steps to Develop an IT Strategy and Framework

  1. Define current enterprise systems inventory. The first step is to identify the systems you have in place, which can be difficult to do if you are a larger or more complex organization. Companies that have grown quickly and/or acquired one or more other companies are more likely to have a hodgepodge of ERP systems, spreadsheets, and other business software to run their operations. We often see companies with several hundred enterprise systems running their business, including a number of unauthorized “black market” systems that your IT department isn’t even aware of. It is hard to determine a logical path forward without first understanding where you’re starting.
  2. Rationalize current systems. Once the systems have been inventoried, attention then needs to turn to which ones are core to the business or are providing competitive advantage to the organization. It is also important to assess each system’s maintenance costs, pain points, flexibility, and scalability for future growth. It is also important to evaluate the opportunity costs associated with business benefits that are lost due to poor systems. Once the systems have been evaluated using these and other key criteria, you can then move on to identifying what to do with each of them.
  3. Identify low-hanging fruit. This is where the real fun begins. Once you have the quantitative assessment of each of the IT systems in your portfolio, you can then start prioritizing which systems can or should be consolidated, upgraded, or replaced. Typically there is significant “low hanging fruit,” or systems that can have an immediate and measurable impact by improving or replacing them. In addition to identifying the projects that may have immediate value, you will also want to prioritize the non-low-hanging-fruit.
  4. Identify your applications strategy. Once you have your priorities in place, your attention should then turn to your overall applications strategy. Based on your priorities, you will want to consider whether to pursue a single, consolidated ERP system, a best-of-breed solution, or a hybrid of both. This applications strategy should take not only your highest and most immediate priorities into consideration, but also the more intermediate and long-term priorities as well. Another key consideration is your hosting strategy: will you pursue Software as a Service (SaaS) or cloud solutions, on-premise software, or a combination of both? Single or multiple instance?
  5. Develop an IT strategy roadmap. The above four steps will be crucial to developing your overall IT strategy roadmap. These inputs will help you identify a three- to five-year plan for improving your enterprise systems infrastructure. In most cases, the plan will entail evaluation of potential ERP systems or other enterprise applications. In addition, the plan should identify how new systems will integrate to legacy systems, data consolidation and strategy, infrastructure upgrade requirements to support the new strategy, and organizational change management activities to support the new plan forward.

This is obviously a very simplified overview of how to develop an effective IT strategy but provides a good starting point. Contact us to find out more about our 4-week IT strategic assessment.

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