Imagine you’re the CEO of a multinational company. One of your teams has come up with a new idea to improve specific business processes that will make you more efficient, more agile, and more customer focused than your competitors. But putting that into practice is where the challenges begin.
In principle the idea works — a clearly identified issue with a well scoped software solution, that will provide measurable business benefits in the future.
Getting from your current position to that future state takes hard work and a commitment to change, but importantly, you also need a good understanding of how and when you will realize the value from this transformation, and exactly what that means to your organization in today’s competitive and disruptive landscape.
One of the toughest questions comes back to software — when do you buy out of the box? And if you do buy out of the box, then how do you differentiate?
Be careful what you ask for
Running a business is like running a marathon. You need to be constantly moving forward, doing so faster and with better focus than your competitors if you want to stay ahead of them. This means deriving value from your technology investments as quickly as possible, confident that the direction you’re taking is the right one.
This is where selecting the right enterprise applications is crucial. Implementing a series of bespoke software solutions doesn’t work because it’s slow and leads to issues with integration and upgrades. Neither does designing applications from the ground up. The development time needed to create a usable system is too long and delays value realization.
Some companies try to buy a solution off the shelf and then customize it to fit their business, but variations to standard enterprise application functionality are often problematic from the start. It can take years to customize the system until it has every feature imaginable, but by the time it is up and running priorities might have changed. And that’s only the beginning. When the next requirement to upgrade or modify the solution comes along, all those personalized capabilities will need to be adjusted and customized again to fit with the new system.
As time goes on, this problem compounds. New projects will be held back for longer, take more time to implement, cost more and be slower to achieve their goals. Time to value lengthens, efficiency declines, profitability can fall, and business value delivered by the system diminishes.
Specialize and stay ahead
The key to making the most of what tech can offer to your business is to use as much of the standardized toolbox as possible. I realize that this can seem counter-intuitive. If the business ethos is to differentiate yourself from your competitors, then how can standardized tools be appropriate? But the reality is that standardized tools save the organization significant time and money both throughout the implementation of the system, and in every future upgrade.
To be clear, I’m not suggesting that a business should tailor its entire operation to suit its enterprise technologies. Instead, find solutions that provide sophisticated and industry-specific functionality for you out of the box, but that are also easy to configure. This will allow you to find technologies that fit your business and can easily adapt as you move forward. The same ERP template does not fit both a bank and a food manufacturer, so by finding a solution that is a strong fit for your industry, you will gain maximum functionality immediately. This helps to keep customization low and your time to value short.
Learning from our own experience
At IFS, we’ve been through the process ourselves. We implemented our own ERP solution – IFS Applications 10 - across our entire global business. There’s nothing as good for learning about what works – and what doesn’t – as using it in your own business, where it will affect your own working practices, your own efficiencies and your own time to value.
It took us 24 weeks to make the change. It was so quick because we took the standardized software route and trained our own people to work with it rather than specifying bespoke elements. It was not easy, but it was possible and the pay-off was well worth the exercise.
Always have an eye on the future
ERP implementations can be risky, costly and disruptive to the business. I empathize with the project owners because they have a lot of weight on their shoulders to show the benefits of such large projects – and to do so quickly.
This is compounded by the huge variation between enterprise application vendors in delivering meaningful value. With the right software approach, methodology and partner, ERP software can help businesses hit break even on their investment after just 15 months, whereas the legacy vendors in the market are quoting 3 to 5 years. Operational efficiencies, user productivity, improved delivery times, order completion rates and budgeting cycles are among the key data points cited by customer organizations.
It may seem that all enterprise software vendors use the same talk-track when it comes to cost savings and productivity benefits. But what we’re really talking about here is giving your business a two-year advantage through an accelerated time-to-value from software. And that is seriously significant. Think about that for a moment. What could your business achieve in two years? How many opportunities can you miss in that time and what would the cost of that be to your business? What can happen to your competitor landscape in two years? Your workforce? The ever-shifting technical space?
Adopting a new system or changing ERP vendor can feel like a big change. But change is inevitable. The key to success lies in managing that change quickly, effectively, and with confidence that your system will bring value to the rest of your business. With the two-year advantage, that value is a lot closer than you think.