How to Reduce Spending on Enterprise Software Integration

In the past decade, there have been countless failures, including Nike’s woes include $100 million in sales lost due to unforeseen complications with its supply chain software and the U.S. Air Force pulling the plug on an enterprise software project after spending $1 billion.

Let’s face facts, enterprise software is complex and expensive. Every company, no matter how large or small, grapples with finding the most effective operational systems for their company. It is one of the most critical decisions top management has to make.

According to McKinsey, on average, large IT projects are 45 percent over budget. In addition, 17 percent of IT projects are executed so poorly that they threaten the very existence of the company. The results are decidedly mixed.

We know these platforms will enable our businesses to complete jobs, manage inventory, plan for production, keep track of manufacturing processes, staff management, accounting and other routine but critical tasks.

Enterprise software requires time and effort as well as human and financial capital to adopt. There is no such thing as “plug and play.” In addition, it is not a panacea for operational or deeper management issues that may exist in our companies.

Look at the Problem First

What exactly is wrong here? Companies want a quick fix. After all, with an enterprise system, companies are supposedly creating an automatic workflow and efficiencies by adding technology into their processes.

However, technology integration requires people. Leaders forget that companies consist of three legs: people, process and technology. Just because leadership selects technology solutions doesn’t guarantee success. When a company implements a new system, leadership assumes that they can take existing processes and “map” them onto the new system. However, this implementation may not always solve problems.

In addition, companies may purchase the wrong system, spending tens of thousands and sometimes millions of dollars. Witness the beginning of finger pointing between companies and vendors. More wasted resources.

To avoid this, examine the problem from day one and begin with the end in mind. Figure out ahead of time what should the workflow look like, the optimal customer technology journey and are there external or internal vendors, customers, employees and clients involved.

For example, Joe in human resources should be using an applicant tracking system to log progress on new hires. Sarah in the marketing department shouldn’t be using 15 different tools to do her job. Jaden in operations should be using a dashboard to track his KPIs as opposed to disparate spreadsheets.

One Size Does Not Fit All

When companies map the customer’s technology journey, they can use that to inform their decisions on technology purchases and decide which platform is appropriate. This prevents what I have observed in the past as managers copying solutions that their competitors are using and assume it’s the best one for their company.

This is lazy thinking. I can tell you that I have seen many six- or seven-figure, and even nine-figure business system implementations that go awry. Once I saw a health care company spend $100 million on a solution that was not implemented correctly and employees did not use it. Management didn’t consider the human aspect of managing change when deploying a new system.

Slow Down on Your Decisions

That red Ferrari is sexy, shiny, and goes to 0-to-60 mph in under three seconds. But do you need to go that fast and pay that much just to get somewhere.

The same can be said for your technology decisions. Know what your company and customers’ real needs are. Problems arise when the optimal customer journey is not mapped, the wrong technology system is chosen, and then implementation goes poorly. At best, companies lose time and money. At worst, they lose customers, revenue and reputation – and end up filing lawsuits.

Have a Champion to Advocate

An absolute must: putting the right advocacy inside your company. A CTO can provide this guidance, especially from a business and technology perspective. On the tech side, you need an informed advocate who understands how the integration process works. Both the business and technology leadership needs to drive change management or risk failure.

Here’s the second issue at hand: employee use. Remember, there is no magic bullet. People are creatures of habit. We must educate, inform and let employees know that the benefits of the new system will allow them to do their jobs more efficiently. We need to manage their uptake of the system, check in with them and make sure they are informed along the way.

The Journey Never Ends

Just when management thought it was done (integration complete) they learn they cannot simply pass it on and hope the system works. Ongoing support is critical, and what works today may not work tomorrow. Not being happy with the status quo is a huge part of this. As the system grows, processes need to evolve. You need to figure out what is working and what is not.

In short, the key is to constantly poll, prioritize and implement as the process moves forward. Successful implementation is not the result of chance, but of a well laid out, systematic approach. Remember the famous quote by the world’s greatest inventor and innovator Benjamin Franklin: “Those who fail to plan, plan to fail.” The choice is yours.

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Written by:
Scott Krawitz is the Founder & CEO of People Driven Solutions. An innovative and seasoned business technologist and entrepreneur, Scott’s 15 + year career includes engagements consulting executives and leading teams through all project phases from strategic planning, analysis, design and development to implementation, iterative improvement and ongoing support. Industries served include Financial Services, Healthcare, Software, Retail, Business Services, Legal, and Education Technology.
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