When starting a business, and even during its first years, many seem to pay little attention to their Information Systems (or software solutions). Why? Because it’s one of those things that doesn’t stop the show, and isn’t really taught in business schools as a strategic enough lever. There are much more pressing issues to cater for.
While this may be acceptable, your Information Systems strategy may be the advantage you’re seeking and prepare you for true growth tomorrow. What is the right approach to carve out a strategy here?
Your first step would be to investigate your current situation, business horizon and foreseen requirements. Main points to investigate include:
The above investigation needs to be summarized in a document that will serve your next explorations. Some businesses take the opportunity to re-visit old processes or habits in the process, thus refining their business machine already. Most companies call for an external consultant to investigate and prepare this document.
Your next step would be to go out and do some shopping. Typically, an experienced consultant will short-list potential solutions for you, based on the document you (or he) created in the previous step. While it is tempting to start shopping around on your own, it is strongly advised to have an experienced consultant lead this process for you. The number of pieces at play here is significant, so are the market offerings. Identifying the best vendor, software and implementation partners is a key strategic decision that will impact your business for years to come, and you don’t want to save a penny today in exchange of grave investments that will hider your business, instead of grow your business.
In your business, you must be doing something unique, something that gives you the pinch of advantage over your competition. This is your core process. Other than that, you’re probably doing much of what everyone else is doing: managing employees, money, customers, inventory, production, etc. These are your context processes.
You want your operating costs of context processes to be very low, and you achieve this by using standard processes, just like many others do. This is where standard, packaged software solutions excel.
If you have a core process that gives you the edge you need in your battle field – this is where you want to invest to be the best.
The short answer: because you’re not a software house.
Here’s an advice any decent consultant should hand out to you up-front: If there’s a packaged solution out there that is supporting 80% or more of your context (non-core) processes fairly well, with all other checks in place (vendor reliability, software stability and market footprint, etc.) – go for it. How do you bridge the 20% gap? Mostly by changing your processes to adapt to the software – this is probably the most standard and economical way to do it. You can always complement missing parts you really must have locally with point-solutions you’ll either buy from other vendors or develop for your specific needs. Rarely will there be a standard solution covering 100% of your requirements. You’ll want to narrow the missing parts to a minimum.
The main reasons for buying and not developing software solutions, when available, are:
Implementation of software packages (or cloud-based solutions you subscribe to) can be very efficient and quick these days for a small to mid-sized company, if done properly. I’m talking about weeks to several months. What’s “Properly”? I’ll cover that in another post. Assuming you are implementing the best 80%-match for your business today, you still have the remaining 20% to cover, and of course, your core process. In general, I’d consider the following steps:
Last word: a re-visit of your strategy may be needed every 5-7 years, or at lower frequency if you’re not large enough or things in your business changes frequently.
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