Summit Group Software Blog

I correspond with a gentleman from a company called Software Advice from time to time.  His company recently did a survey on strategies used in implementing ERP solutions.

This is a good blog article that highlights the different strategies available, and how many companies choose those strategies, along with their success ratings.

It’s worth a look if you are thinking of implementing or changing your Enterprise Resource Planning, or any sort of technical/software-based change.

http://www.softwareadvice.com/articles/manufacturing/erp-implementation-strategies-1031101/

What would you do if time and money were not a consideration?

Who cares?? I dare you to find one company for whom time and money are not a consideration. Even the largest companies with the deepest pockets have some sort of ownership or shareholders to which they are accountable for those little details like time and money.

Of course we want it all and we want it for as cheap as possible. Those are sometimes (not always) opposing desires. So what’s a company to do in making their decisions… simple — prioritize. I see companies struggle with prioritization everyday in my role managing implementation projects of CRM and ERP software for businesses. The catch though, is that prioritization really isn’t simple. It comes with… ugh… tradeouts.

My advice on tackling prioritization is to start at the very top. Assess the high level strategy as determined by the leadership. These strategies can help guide what is important down to some of the most tactical things. For example — is the strategy to ‘grow’? Then the priorities that should be emphasized in a software implementation are ones that support expanding the infrastructure, scaling out capabilities like access and reporting, and support flexibility or the ability to change processes as the organization grows.

Once you understand the high level direction of the company, those strategies need to be applied to the decisions around solutions that will support those goals. And then finally, those high level strategies serve as the directionality when making decisions about what that system needs to do, how customized something needs to be, and/or where tradeouts may need to be made.

This can guide decisions on everything on possible integrations with other systems to the depth of a customization. If a trade out over convenience and complexity has to be made taking cost into consideration, I will always challenge the decision makers I am working with by asking those questions about what is acceptable or not in the context of their short and long term business goals. And challenge assumptions about the both the cost of the software or services as well as the cost associated with their people, processes, etc.

Again, it isn’t simple. Even if you can gather consensus on the highest level strategies — interpretation of what that means for a team, department or an individual is often up for debate. This is the tricky part that often involves a little soul-searching on the part of the groups I am working with.  In the ’storm’ of the implementation, it is very hard to cling tightly to the highest level strategic priorities when the noise and pressure from individual users or teams is often not only loud - but legitimate. Open communication and a fair assessment of those true priorities, along with transparency (as much as is possible) to those affected by a prioritization decision helps garner support for those tradeouts when they have to be made. Good luck! Happy Prioritizing!

I woke up today and realized it is almost March.
It has been an absolute whirlwind since the beginning of the year - with year-end of course, and a ton of great projects kicking off the year right.

With spring — comes Convergence! Microsoft’s annual Microsoft Dynamics Customer Conference is held April 24-27, 2010 in Atlanta, GA.

Here’s why I love it:

• Lots-O-Learning - concurrent sessions galore — some highlights for sure this year are going to be the Microsoft Dynamics GP 2010 launch, Sharepoint 2010 and cool integration info for Microsoft Dynamics, and the next release of Microsoft Dynamics CRM
• Networking - It is incredible the number of businesses out there that use Microsoft Dynamics. Talking to other people who use Microsoft Dynamics, understanding what they do, how they make their living, and how Dynamics fits in is fascinating. AND - there are bound to be companies right in your industry with businesses like yours that you can network with and learn from. You can never have a deep enough network…
• EXPO!! And — SWAG!! (Stuff we all get ;-)) The Expo is full of ISV and third party providers that have amazing add-ons to Microsoft Dynamics. They will have what you need…
• Warm Temperatures! Who am I kidding… We all love a warm weather destination - double it with a fantastic learning opportunity and it is a winner.

AND FINALLY — Summit Group clients on Managed Services Plans have an additional financial incentive to attend… talk to us for more info…

Are you registered? Check it out:
http://www.microsoft.com/dynamics/convergence/atlanta10/default.aspx

I received an e-mail recently regarding my last post.  It suggested that the one missing component to ensure a solid return on technology investments was a focus on change management.  I couldn’t agree more!  Woodrow Wilson said “If you want to make enemies, try to change something.”  In the past couple of months, I have met with two different business owners who follow that way of thinking.  In both cases, they want to implement new financial management systems they know will provide many great benefits over their legacy systems, but both are waiting for their accountants to retire!
 
Technology implementations and their related costs shouldn’t be viewed an as expense, but rather as the investment in the growth of the business that they are. To put the above example in investment terms, these two small business owners are taking an ‘in the money’ type of strategy.  In both cases they figuratively have a ‘call option’ to adopt the technology that can be exercised at any time.  This type of view means that there is ‘option value’ to waiting, That is, adoption should wait until benefits are above costs.  There may be large benefit to the systems they want to implement; but the costs, primarily the impacts of change to the organization, are viewed to be too great.  This view is common.  Many IT projects fail not because of the technology, but because human beings resist change and uncertainty.  Here are a few ideas to get your employees onboard with your next technology investment.  
 
Go Grassroots
No one likes to be force-fed anything.  How do people react when top-down decision making happens?  Typically, they happily nod their heads during meetings and implementation discussions only to silently object or work against things.  These actions undermine the project and lower the overall return on investment.  Getting employees engaged with the decision making early on, helps to eliminate buy-in issues.  We have worked with more than one company where the demand for implementing a new system came from the bottom-up.  In those situations, huge hurdles were removed before the projects even started.  Louis L’Amour wrote in The Lonely Men, “Even those who fancy themselves the most progressive will fight against other kinds of progress, for each of us is convinced that our way is the best way.”  If you get people to be part of a decision for change, they’ll believe in the positive outcomes and be onboard from the start.  
 
Training Matters
Many companies view training as an area where they can cut corners instead of solidifying an investment.  Companies that do skimp on the training investment fail in two areas.  The first is the actual implementation of a new piece of technology.  They may select to self-teach themselves with tools such as online help to save money.  This tends to leave employees frustrated and only knowing the exact functionality to do their jobs.  Second, over time as new employees are hired or upgrades are installed new, or even existing functionality goes without notice. This ‘application erosion’ silently adds up to a significant impact. Both of these scenarios detract from the value of a technology solution.  Just last week I met with a company who has made large technology investments, but has never given their staff sufficient training on how to fully take advantage of the investment they have made.  A small amount of training solved a number of issues they were having and made their investment exponentially more valuable.  
 
As a very smart reader pointed out, change management is a really big part of successfully implementing a new technology in your business. Make sure that the input of your staff is provided in the decision making process early on and don’t skimp on the training investment.  These two relatively simple ideas will help make sure people are on board and capable of being successful with the new direction or tools.  

Successfully implementing a new CRM strategy requires much more than just installing a new piece of software.  It requires a balanced effort with equal focus on the systems, people, and processes.  Companies who view a CRM strategy as simply purchasing new CRM software typically fail to realize the desired value or return on their investment.  These companies fail – not because the software didn’t work, but because they didn’t have a well thought out vision or strategy that took into consideration both their customer and employee engagement strategy.  According to AMR research, companies that put a new CRM system in without analyzing and defining key business processes and objectives fail over 90 percent of the time! 

Implementing CRM is commonly misunderstood to mean “installing CRM.”  The problem with this view is that it fails to realize that in reality, CRM is a business strategy.  Successful companies effectively leverage software and other technology to enable the CRM strategy and processes.  Companies who fail at implementing a new CRM solution typically have spent significant amounts of money and time on technology without the proper vision, strategy, and processes being defined upfront. 

A well-defined CRM strategy takes into consideration the entire organization’s customer engagement strategy.  This includes a careful analysis of how existing customers are managed, customer service, and sales strategies to name a few.  Defining how customers engage with an organization starts from prospective customers all the way through the customer life cycle.  A successful CRM strategy will provide a system to support this full span.  In addition, a successful CRM strategy takes into consideration the people within the organization.  It includes change management, user adoption, organizational design and proper training.  When these factors are included in the upfront and supported by technology, a CRM initiative will produce significant return on investment and competitive advantage. 

Not only must a strong CRM strategy be defined, but it also must be supported and owned by the executive leadership team.  People throughout the organization must hear from executives about how CRM is a critical initiative that generates significant return on investment and competitive advantage.  Executives must stress that CRM is not just about technology, but about engaging customers to maximize customer profitability and long-term potential.  A CRM initiative is not a short term project, but an ongoing commitment to perfect customer engagement.  Executives must be ‘champions’ who push the organization to continually focus on improving customer strategies, reinforce objectives, and continually act as the messenger of the benefits to both customers and employees.

Oscar Wilde wrote, “The cynic knows the price of everything and the value of nothing.”  Unfortunately, current global economic conditions make it too easy to fall into this way of thinking.  Based on recent headlines, it seems that far too much attention is being placed on eliminating unnecessary jobs and far too little attention on actually cutting unnecessary work and increasing efficiency.  Contributing to this negative perception in the boardroom is the idea that IT projects are too costly, take too long to implement, fail to deliver differentiation, don’t line up with business strategies, and deliver value only when completed. 

Putting aside these negative perceptions, few people would argue the increases in productivity over the past decade are due mostly to advances in technology.  According the U.S. Bureau of Economic Analysis, businesses increased their investments in IT from about $3,500 per worker in 1994 to approximately $8,000 in 2005.  During this same period of time, annual productivity growth in U.S. companies roughly doubled after moving along at about 1.4% for the previous 20 years.  The challenge is ensuring that the dollars invested in technology provide the necessary return and deliver a strong competitive advantage.    

Align Business and IT Strategies

While aligning business and IT strategies may be a concept that is widely accepted, it is far less frequently accomplished.   The fundamental flaw that leads to this is that many IT professionals don’t focus on or truly understand the business need and business leaders do not invest the time required to appreciate the power and challenges of technology.  An example of this is implementing a customer relationship management (CRM) solution. 

I worked with a local company a few years ago who misunderstood that implementing CRM is more involved than simply installing new software.  They failed to realize that CRM is a business strategy and instead viewed it simply as a piece of software.  The value in their eyes was simply the cost of the software that they believed would improve their performance.  They never viewed it as anything more and therefore never got anything more out of it.  They are still wondering why it didn’t have the significant impact they were expecting. 

Successful companies effectively leverage software and other technology to enable their business strategies.  In my above example, failing at implementing a new CRM solution typically is a result of spending  significant amounts of time and money on implementing a piece of technology without the proper vision, strategy, and processes being defined upfront.  Companies, who adopt standard packaged software, unfortunately often end up adapting their business to the technology instead of adapting the technology to their business.  Although this can benefit companies who give up inefficient processes to utilize standard best practices, it more often leads to sacrificing competitively differentiating capabilities. 

Keep it Simple

Leonardo Da Vinci said it best, “Simplicity is the ultimate sophistication.”  This same idea applies to enterprise IT solutions.  Standards such as network protocols, platforms, databases, and operating systems should be limited to as few as possible.  IT projects typically start with just a few standards but most of the time they multiply due to additional requirements and initiatives.  Limiting standards and simplifying technology and design allows organizations to devote less time to quality assurance and more to building new functionality.

I recently visited with a large corporation that had 92 separate systems that held structured customer information; most of which were not integrated or connected.  This causes duplicate entry, more room for errors to occur, and the end result is a lot of inaccuracies on what is the most current information.  Imagine being a new employee at this company and trying to find something about a customer; where would you look?  Keeping things simple helps to deliver a quick and early win; one that builds confidence and delivers value to the business. 

Define and Focus on Priorities

There is always tension between who gets what they want and who doesn’t; just ask my daughter.  In the business world, this conflict is only intensified by prevailing economic uncertainty.  This battle between priorities can be between competing projects or conflicting goals/features within a project.  It is vital to the success of an IT project to define these priorities up front and to make sure that projects are not delayed or pushed over budget by non priority goals.  “Keep your eye on the ball” is a mantra that applies to many sports; it also applies to IT projects. 

Far too many times I have witnessed companies start a project with goals such as increased data integrity, increased scalability, and/or better access to data; but then get derailed by solely focusing on a non-priority item.  An example of this is a customized software solution we recently built for a company to replace an older application.  The previous solution was horribly inefficient and had significant data issues.  The new system solved all of their upfront goals, provided previously non-existent reporting, increased reliability, and the users absolutely loved it.  However, one person within this company almost derailed the entire project because one task required two additional mouse clicks compared to their old system.  Sometimes keeping your eye on the ball is harder than it seems. 

Technology is at the heart of competitive advantage and today more than ever that can make all the difference.  Technology can be a vital tool to help a company cut costs, better manage customers, increase efficiency, provide better business intelligence, and provide numerous other benefits.  However, the fact remains that technology in and of itself can’t deliver on these promises alone.  When technology is implemented as part of an overall solution with an equal focus on the business processes and the people involved it can be wildly successful.  The keys to success are simple; focus on making sure that IT investments are in line with business strategies, keep things simple, and stay focused on the end goals.