Too often, companies jump right into selecting new ERP software without first understanding their overarching enterprise and IT strategy. It’s an easy mistake to make when your current systems seem so dated compared to newer options in the industry, but it typically leads to disappointment.
A disconnect between the strategic direction of your overall company and your selected and implemented ERP system can lead to trouble, so here are some tips to develop an enterprise IT strategy that aligns with your overall company strategy:
- Define your company’s overall strategy. Some organizations have well-defined strategies, while others don’t. In either case, it is important to either define and document your strategy if it doesn’t already exist, or leverage your existing strategy to complete the additional steps below. This entails ensuring that you have a clear vision for where the organization is headed in terms of growth prospects, future markets or customer bases that you plan to pursue, potential M&A activity and other key strategic criteria that should ultimately influence how you move forward with your IT strategy.
- Define IT’s role and purpose in your organization. Ask yourself a key question: does your organization view IT as a commodity or support role in the company, or is it viewed as a competitive differentiator that can help provide unique value to your customers? The answer to that question will likely lead you down one of two paths – one that leads to outsourcing IT functions and applications, or another that leads to building those competencies in house. This will also determine the types of enterprise solutions you might pursue in the future, such as cloud, SaaS, on premise, best of breed, etc. The graphic below shows a basic framework that can be used to drive some of those decisions.
- Assess your internal IT group’s competencies. Based on your answer to #2, you also need to look at how sophisticated your group is (or isn’t). A more sophisticated group, for example, may be better suited to handle a best of breed on premise environment, whereas a less robust IT department may be better suited to manage a SaaS ERP system. When assessing your competencies, be sure to take into account the breadth of your team’s skills, as well as your overall physical infrastructure.
- Priority of short-term benefits versus long-term benefits. Certain companies move faster than others. Some are more patient in realizing benefits, while others may not be. It is essential to understand how important it is for your team to implement solutions quickly and inexpensively versus focusing on maximizing longer-term business benefits. Those two paths can lead to very different IT strategies. Either way, it is important to look for low-hanging fruit to realize some benefits early to help build momentum.
- Other considerations. There are a host of other considerations to keep in mind when building your enterprise IT strategy. For example, how open are your employees to change? How unique is your business compared to peers in your industry? How much are you looking to standardize your business operations across multiple locations or business units? Which areas of your business are the “real” competitive differentiators that you want to focus more resources on? All of these and other questions will help determine the appropriate enterprise IT strategy for your organization.
These five areas will help define an enterprise IT strategy that is aligned with your company vision and strategy. That alignment is more likely to lead to enterprise software success than your industry peers and counterparts.
Learn more by watching our on-demand webinar, How to Define the Best Enterprise Strategy Roadmap for Your Organization.