December 15, 2014
Many companies in our industry are looking to replace their legacy software with shiny new applications. It's a "Will it run on my iPhone?" sort of dysfunctional decision process. On our way from doing software reviews to embarking on multimillion-dollar software implementations, we'll make many stupid decisions. Here's the standard drill.
We decide we need new software, mostly because we're sufficiently spooked by "digital disruptors" creeping into our neighborhood. We do a strategic assessment, producing a heat map or some form of criticality analysis.
The consultant hired for our strategy review has, naturally, won the engagement for the software selection. He encourages us to form a cross-functional team, comprising operations and administrative people from different parts of the company, for two key reasons. One, we need buy-in to succeed, and that will come from being part of the selection decision. Two, a sound assessment process requires many disciplines. One department, especially IT, just doesn't know enough.
[Some products just invent themselves. For a chuckle, read 9 Implausible Tech Products For 2015.]
And here is where we get stupid. Individually, many line-of-business people are brilliant. But assemble them in a room with a software sales pro and they become very stupid collectively. And if the sales pro has invitations to the next Salesforce.com Dreamforce shindig in his pocket, watch out.
These line-of-business experts have, generally speaking, no experience whatsoever in what they're about to do. They've never been part of a technology assessment process before. They can't separate fact from fiction, as they have no training for that assessment. They don't know the difference between useful flexibility and productivity-killing complexity. They barely understand the tech jargon: cloud, on-prem, software-as-a-platform, virtualized this and that, AWS, blah, blah, blah. They want out of the process before they're even in.
Most LOB experts focus on the here and now. That's what lines of business are all about. But we make major software investments for the future, for requirements we don't necessarily have yet, for the business we want to create. It's difficult for most LOB managers to step into a software assessment project and shift their perspective. They're not being replaced during the evaluation, so they're distracted by present-day work.
The three major players in this type of software project have three different objectives. The company wants to power current and future business capabilities -- to increase customer value and create competitive advantage. The consultancy wants to establish a reasonably lengthy strategy and review process that aligns with its time-based compensation model. The software vendor wants to sell as many seats or subscriptions as possible, preferably this quarter.
I don't envy the vendors in this situation. Who do they sell to? Who has the power in the room? The marketing VP, who wants the software to integrate with her department's online store and e-commerce platform? The finance manager buried in Excel hell who's looking for some slick-looking analytics and BI solution? The VP of IT who wants/doesn't want to move to the cloud? The Millennials in the room (assuming they showed up for the meeting) looking for everything mobile? Or the head of Plant A, who wants the new system to look exactly like the existing system, because he can't afford any disruption in production? Or does the vendor seek out those who do understand the total company strategy and attempt to present a case for software that will power the future? ("All of the above" just isn't possible.)
I've watched four sizable companies go through this type of selection and implementation process for ERP software in the last five years. In each case, the start-to-finish time was more than four years. And more than a year after implementation, the companies still aren't back to where they started.
One of our operating divisions will face this type of decision in the not-too-distant future, and we can't afford to take this dysfunctional path. I have to find a different way. It all starts with executive support and CEO sponsorship, but that's just not an answer to this problem. A "gets it" CEO removes barriers, but he doesn't effect success.
My current thinking is to start building a team of technology experts who will become completely knowledgeable in their functional areas of business. They will be IT specialists in LOB clothing. They will become the business design and solutions team, with full authority to create a new business model for the division through technology-enabled changes. And they -- and only they -- will review the various options and decide on our path forward. And for their efforts, they will be well rewarded.
This will take some time. I'd better get started. We can't afford to make stupid decisions.
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