When I switched careers, leaving the IT business in 2000, the statistics showed that 60% of IT projects failed to meet expectations (source Robbins-Gioia). Even more so, costs overrun and went up to 189% of the original budget (source KPMG). Nowadays, and according to an IBM study, only 40% of projects meet their schedule, budget and quality goals.
Recently, I had the example of a company who wanted to replace its aging ERP and CRM system, 15 years since its first implementation. After three years, two false starts and spendings reaching 70% of the budget, they haven’t got a clue of what their future IT backbone will be.
To start with, I would like to acknowledge that it is not easy for SMEs to take the right decision concerning information technology. Most of the advice you can get will come from software manufacturers or from consulting firms that specialize in only one or two software platforms. They will each propose you their best solution, with one faulty initial step: their starting point is the software itself, not your need.
Know why you do it
Before making any choice concerning an IT system, whether it is an ERP, a CRM or a collaborative environment, you may want to go through the following checks.
1 Rely on your company strengths. What are your employees good at, as a team? Once you have spotted the features that are behind your success, you can investigate an information system that will leverage these strengths and therefore help your people go from good to great. For example, if you are good at managing client relationships, you might want to develop your presence on the web and increase your use of social media. As another example, if you have a strong presence and expertise in a certain sector, setting up a BI (Business Intelligence) software architecture that enables you to stay ahead in that sector makes a lot of sense. So, what are the strengths of your company?
2 Support your company strategy. Information systems should be embedded within the company strategy and not be a stand-alone expenditure. In fact, every IT project should first answer the question: what makes it a strategic initiative? A way to guarantee each IT project is strategy related is to write IT strategic guidelines. The purpose of this document is to define the IT strategy for a period of 3 to 5 years, depending on your strategic cycle. The key feature of these guidelines is that the company strategy is the starting point from which IT strategy is derived and, which in its turn, cascades into a series of IT projects.
3 Employees must own it. Very often when you ask people from your IT department, they will tell you that your IT systems are great. Of course they would think so! They often participated in its design or at least its implementation, so they cherish it as their “own creature”. If you want all employees to have the same feelings toward the information system running in your company, make sure they all contribute to it.
I like the examples given by Gary Hamel in his books (i.e. The Future of Management or What matters now) because they show how employees who take ownership of company projects often over-perform. Transposing this to our context, we can understand that when employees are behind their information system, meaning it does what they want it to do, the chance that they will actually be using it and making the best out of it is far much higher.
What are two features companies like Amazon, LinkedIn or Wal-Mart share?
1. They are successful
2. And to be so, they have developed custom made information systems that leverage their businesses.
One of the reason is, in regards to their information system, they didn’t go for the copy/paste or the standard piece of software because their needs were new, their models and processes were new and moreover, they wanted to lead, not to follow. Therefore, they have developed an IT architecture that would meet their needs, those of today and even more, those of their fast growing tomorrow.
So, when you want to change your information system: think big, think far ahead and be clear with what you want. And make sure that all those concerned, hence all employees, are involved early in designing the change.