There is an old saying in poker; if you can’t see the sucker in the room…it is probably you. The same can be said of advancements in technology. Forrester’s recently forecasted increases in IT spending of 8% in 2011 and 2012[i]. Recent M&A activity suggests the sector is heating up.
In many industries, market leaders create proprietary technologies and information systems that improve the customer experience directly or indirectly through information flow, efficiency, cycle time, etc. At the current rate of change, a company either realizes a technological advantage, or is likely at a competitive disadvantage.
We have numerous clients who are either in the midst of ERP implementations, or considering similar upgrades to their systems. At some point the business owner must ask the strategic question; are our technology improvements truly game changers, or only an enhancement to existing ways of doing business?
More than 90% of ERP type systems are delivered late, and their implementations can be taxing to small and mid-market businesses. It is not difficult to spend $1 million+ (in hard and soft costs) in such systems, which is a drop in the bucket compared to the cost of disappointing customers due to errors or missed timelines. If entrepreneurs are going to expend valuable resources (time and money) on technologies, they had better select the right ones, and prime their organization to implement them seamlessly.
I find there are often two extremes during such implementations. In some companies, functional department heads (such as sales, engineering, design) lack experience in software integrations and do not become invested in the deliverables until it is too late. Other times, companies become so fascinated with perfection, they lose sight of the objective, and become paralyzed in analysis. If a company’s enterprise system becomes dated because of their inability to act, competitors can seize the upper hand.
If you are considering such upgrades to your technology, it is often sensible to take the aggressive but measured approach. In other words, the strategist is always looking to leverage technology that reshapes the customer experience, improves efficiency or reduces costs in some material way while simplifying or automating processes. Such decisions should not be left to the technologists, but shared by the leadership team who must be equally responsible for selection, scoping and integration. Failure is not an option as an unsuccessful project can put a company years behind.
Don’t be the sucker.
Marc Emmer is a President of Optimize Inc. a California based management consulting firm specializing in strategic planning. Marc is the author of the book Intended Consequences. Marc can be reached at email@example.com.
[i] Source: Wall Street Beat: Underlying Confidence Marks Tech Sector IDG News