When most companies contact us for help, they immediately assume that their current systems are the root cause of many of the operational pains that they are feeling. Processes are inefficient, employees hate the current systems, data is a mess and there is no way to scale for continued growth in the future. So, they often assume that new ERP systems will provide the silver bullet they need.
But when we dig a bit deeper, we often find that technology is not the root cause of the problems. In order to truly transform their businesses to get to the next level, organizations often need to address deeper root causes: improving business processes, better defining roles and responsibilities, better training employees and a host of process- and people-related issues are common drivers of improvements.
Enterprise technologies may be one component of your overarching business transformation, but we see our share of initiatives that lead to several non-technical work streams. Here are some reasons why your business transformation may not need to involve technology – at least not yet:
- Without business process reengineering, new technology will simply pave the cow paths. Too often, companies jump into their enterprise software initiatives without redefining their business processes. This typically leads to “paving the cow paths” – in other words, simply automated your already broken business processes. Business process reengineering is an important first step and foundation to an effective ERP implementation, so even if technology is a key part of your roadmap, make sure that you’ve done the heavy lifting to redefine key business processes prior to implementing a new system.
- Technology is useless without the right guiding enterprise and IT strategy. It’s easy to quickly embark on a new technology system because it will be an improvement over what you currently have – regardless of whether or not it fits into your strategic plan. There are simply too many options and variables to consider in the technology space, which can cause some to stumble when those decisions don’t fit your overall strategy. For example, a risk-adverse company that is focused on revenue enhancement and is also sensitive to biting off more than they can chew may be better off defining a strategy that puts sales-related technology (such as CRM systems) front and center, rather than more traditional, back-office ERP systems. Technology can actually be a hindrance to your overall transformation efforts when it is not aligned with your overall corporate, operations and technology strategy.
- Organizational change management is what ultimately drives transformation – not technology. Technology may enable it, but it rarely drives true transformation. Instead, people and processes are what will drive the change, so it is important to ask how important new technology is in the grand scheme of things. For example, your organization may have an outdated legacy system that hasn’t been upgraded in a decade. It’s easy to point at the system as the problem, but perhaps people aren’t using the system correctly and your team hasn’t taken full advantage of what that old system can do for you. It may turn out that technology still becomes part of the answer, but it is important to consider organizational change management as a potentially lower risk, lower cost and higher ROI type of alternative to a full-blown ERP system.
- Even if it really is time for a new ERP system, the other non-technical aspects of your initative will drive true business transformation. Let’s assume that your business transformation can’t happen without new technology. That may very well be true – and it is true for a majority of our clients– but it is important to recognize that it is one of many important components considered for your transformation. Especially in uncertain times of slow economic growth or flat revenues and profits, it is important to take a measured approach that looks at your transformation from all angles. Be sure to consider how CRM systems, HCM systems, eCommerce, and/or other enterprise technologies might address your needs relative to a higher-cost and higher-risk ERP software initiative.
You may very well find that new ERP systems or other enterprise technologies are key to your transformation effort. If that’s the case, then make sure that the timing for new technology is right and that you’ve addressed people and process issues first and foremost.
Many ERP projects fail because they don’t adequately address these important organizational change management issues.