Untangling your business systems will pay dividends
What a mess! The business systems in most large business are a spaghetti
nightmare. These systems have grown like topsy – with many different solutions
bolted together. Try to make a change – it’s like trying to construct a new
motorway through the centre of London.
As the economic crisis unfolds, it is common sense that large companies will
have to live with reduced sales, tighter cash flow and the need to streamline
their costs in order to survive. IT can be the answer to most of those
As the economy gets more difficult to predict, large companies are trying to
integrate disparate business systems together and at the same time simplify
business processes. Huge savings can be made by making business systems more
efficient – saving labour costs, improving cash-flow and providing management
with up to date and accurate information. I dread to think how some boards have
recently made these colossal business decisions which have hit the headlines –
in many cases these decisions have been based on inaccurate and outdated
I recently held a masterclass for a major ERP developer’s customers – all
FTSE 100 companies – on how they could streamline their systems and make them
more efficient? The outcome was a complete stalemate, – they all saw the
advantages of ‘Purchase-to-Pay’ and ‘Activity Based Costing’ etc. But none of
them had the budget or inclination to take on the huge change process required
to transform their business systems – it would affect too many other
Technology – what is happening?
When you think that systems architecture is stabilising – it all changes
again. Traditional in-house server-based technology is gradually being replaced
by hosted software as a service (SaaS) technology. Instead of having to maintain
and upgrade internal systems let a third-party do it for you. We have seen
bureau systems – 20 years ago; facilities management – 10 years ago;
Application Service Provider (ASP) – 5 years ago and now SaaS. Yes they all have
similar concepts but are in fact quite different.
The SaaS model is a charge per user per day rather than a capital charge – it
provides a wide area network web-based solution with external hosted
applications and data servers. The hosted data has been the stumbling block but
gradually organisations are coming to terms with the model. We have seen the
success of SalesForce.com and we are now starting to see other specialist
applications start to appear.
For today’s decentralised corporations the concept of a web-based solution
accessing central databanks has a lot going for it. SaaS can be deployed
anywhere in the world without the need for local technical expertise,
maintenance and support. Many of the leading ERP developers are offering SaaS
models but the take-up has been slow so far. Beware of third parties that
finance and manage the infrastructure with little or no track record – stick to
Dennis Keeling is chief executive of Business Software
Intelligence. He was previously one of the founders and CEO of software industry
Finding help to change the business
So if it is so difficult to change existing systems what can be done? We went
through a similar crisis in the early 1990’s when ‘Windows’ and ‘NT’ were just
emerging. Corporate heads did not have the authority to instigate the huge
change process necessary so they turned to third parties – consultants.
A new term emerged ‘Business Process Re-engineering’ and the largest firms
created large teams of experts to help. They were very successful – they were
independent and external to the organisation. Consultants could make sweeping
recommendations for change that no department head could ever contemplate and
more importantly – consultants can effectively manage and monitor the process of
Few corporate heads have the vision to instigate the changes that are
necessary to unravel their spaghetti architecture; few could logically argue the
return on investment of those changes to the organisation.Today there are
significant savings to be made and ROI is at long last a meaningful measure. We
are no longer treading uncharted territory with our business systems
architecture. Many concepts are well proven and workable – it’s just the sheer
scale of changing the organisation, to implement a new systems architecture and
business processes, that is the problem.
All the major accounting firms still have IT change consultants. There are
also specialist independent groups of consultants – like Knowledge Peers –
http://www.knowledgepeers.com/ who provide online bespoke consultancy in most
complex areas. There are the big traditional (and expensive) international
consultancies like Gartner (gartner.com) and Forrester (forrester.com). For more
specialist help try the Hackett Group (thehackettgroup.com) they have done a lot
of work on redesigning business processes.
Time is of the essence. It’s no good instigating a 3 year project to
rationalise business processes – the company may be dead by then. What is needed
is a quick focused action plan that can be implemented within 6 months to
highlight the areas of maximum impact.
Selecting a system
Corporates are hardly going to replace their existing legacy systems at the
moment and install shiny new ERP systems – but they are scratching their heads
about some of the specialist changes that they will have to make to their
existing systems. The market today is for specialist add-ons that will integrate
to existing legacy systems.
That is not to say that their existing legacy systems cannot provide these
specialist add-ons – but very often that will mean upgrading their existing
legacy systems – an impossible task just to get added specialist functionality.
ComputingMI lists over 2,000 business software products – but only about 100
are the established products we know. The vast majority of the other products
are specialist products that bolt-on to existing legacy systems. Some are new
start-ups; others have been quietly plodding away in the background for many
years. Many are known to the legacy system providers as these smaller specialist
companies provide the high-tech stuff that bolts on to their systems. Document
management, business intelligence, customer relations management and
professional services automation are the new bolt-on names not often found as
standard in legacy ERP systems.
But where do they find these specialist products? You can Google the
specialist feature that you are looking for – and you may get some interesting
links – but the majority of the search results will show irrelevant listings.
But here are however specialist web-sites for selecting business software: