Earlier this week, I met with a Panorama client that is experiencing explosive growth. Not your run of the mill 10 to 20% year-over-year growth, but more like hockey stick, doubling-in-annual-volume type of growth.
This company is struggling with how to best implement new ERP software to streamline their business and scale for growth. Simultaneously, they need to manage the day-to-day demands associated with increasing volumes, employees, and customers.
This is no easy feat. Managing a transformation while experiencing exponential growth creates conflicting priorities. It can be a lot to handle when you’re already lean on resources. In addition, it’s hard to do things the “right way” when you’re trying to get that next big order out.
Digital transformation and ERP software initiatives are difficult and complex, but even more so in high-growth environments. Here are a few pitfalls to watch out for:
Balancing long and short priorities
A big conflict we see in high growth companies is that the best long-term decision may not be right for the short term. It’s difficult for employees (and in some cases, the executive team) to make strategic decisions while trying to keep their heads above water. While you might be tempted to “just get it done,” you also want to make sure you take the time to evaluate the potential ongoing value. Be sure you have a solid plan that considers short-term needs but doesn’t ignore what’s best for the future requirements of the company.
Is it time to standardize that flexible and entrepreneurial culture?
I’ve nearly been run out of the room on occasion for saying the “S” word. Entrepreneurial companies may have gotten to where they are by being responsive and flexible to customers, so standardization isn’t typically a goal. However, fast growth can lead to inefficiencies and patchwork business processes that need tightening. Quality can suffer. This can create tension in your organization, so it is important to have a solid organizational change management strategy and plan to mitigate those risks. Standardization and flexibility aren’t mutually exclusive, but it is a balancing act that can be hard to navigate.
Don’t water down your competitive advantage
You may have a “secret sauce” that makes your business successful. Understand what that is so you can preserve it. ERP vendors often suggest that their software has best practices for your industry, but don’t buy that at face value. Business processes related to your competitive advantage should drive the software. Or, to use an old analogy, don’t fall into the trap of the tail wagging the dog.
A minimal viable product won’t likely deliver a strong ROI
High-growth companies often gravitate toward the concept of a minimum viable product. That’s typically the philosophy they use when introducing products or services to the market, so they tend to want to adopt this approach with their enterprise systems – and understandably so. The downside risk is that this doesn’t allow you to leverage the full strengths and capabilities of today’s ERP software. In order to maximize the benefits of new technology, you’ll need to take the time to map your to-be business processes, organizational roles, and other aspects of your business blueprint.
A sturdy foundation
Your ERP software or digital transformation initiative is more than a technology project. It is more like a blueprint for the continued success and growth of your company. Without a strong well-thought-out blueprint, your business could eventually flounder atop a crumbling foundation. This is why business process management and reengineering is so important to your company’s future success. Be sure to take the time to define your desired business processes before the meter starts running on expensive technical resources who will charge you while they wait for you to make decisions.
The good news is that we’ve seen and helped many companies manage the conflicting dynamics of ERP software implementations and high business growth. It’s very tricky, but it’s also very doable. It’s an area the Panorama team is well-equipped to handle, so contact us to learn more about how we can assist.