Technology is always changing, and making software and tech updates can benefit your business financially. However, you must evaluate your processes first to make sure your upgrades go according to plan.
Everyone who invests in new technology or software hopes that it will save money and generate revenue, but you may dash your hopes if you don’t align your new tools with your business processes and goals. You can then demonstrate to employees, leaders and other stakeholders that your investment will advance the organization.
The most important step is in updating your technology is understanding your processes. Many people will remember the story of Hershey Food’s failed enterprise resource planning (ERP) project from the 1990s. Hershey wanted to upgrade its legacy IT systems. Project leaders advised them it would be a 48-month process, but Hershey sought a 30-month turnaround to wrap the project before Y2K. They planned the cutover for July 1999.
Unfortunately, the company lost track of a key fact: Summer is when they receive most of their orders for Halloween and the winter holiday season. The implementation team cut corners on critical testing phases, and the result was a disaster. Hershey was unable to process $100 million worth of Kiss and Jolly Rancher orders, even though they had the candy in stock. The result? A 19 percent drop in quarterly profits and an 8 percent decline in stock price.
Not so sweet, right?
Let Your Process Drive Your Investments
Hershey’s example illustrates that taking the time to map your current process and capture key steps in them — before you purchase software, new technology, or start a major implementation project — is time well spent. It allows you to identify the essential parts of your processes and landmarks in your business timeline that you cannot compromise.
With this information, you can then revise your software or technology implementation plans not only to accommodate your existing processes but also to think about how you might change them once your new tools are in place. The trick is to include the time and budget for the people and change management work needed to help employees understand how the new processes truly deliver value to employees and customers.
Understanding your processes will also help you avoid the expense — and pain — of purchasing software or technology you don’t need. Conduct a software and technology inventory and then tie your current capabilities to your processes. Where do you see overlap? Where are the inefficiencies? Where is the friction? This inventory will give you a better idea of the jobs you need your new solutions to do.
Alternatively, you may find that you have a perfectly good set of solutions, but they aren’t well integrated, are too complicated, or is something you can simply eliminate rather than upgrade or replace.
For example, I once worked with a finance company that had created effective, but complex, software in its loan operations, from underwriting through final transactions and payments. As a result, they had a lot of unique functions, created in-house with Java.
Over time, the Java script became outdated and nearly impossible to maintain. Management believed they needed to create an expensive custom system to manage the company’s workload. However, after reviewing their processes and the bulk of the work their software did, they realized they could manage most of it using an off-the-shelf, commercial system with modest modifications and external support. That allowed the company to save millions of dollars annually.
Align Your Investment and Your Goals
Next, think about your organization’s future state, especially in the context of today’s rapidly evolving, digital-first world. Any software implementation or new technology will cause disruptions, so you must articulate your vision for where the company’s trajectory is headed, how the new technology will help get you there, and the benefits everyone will enjoy. They must understand the software’s short-term, internal disruption is worth the organization’s ability to manage bigger, long-term external disruptions.
The long-term impacts you need to consider include not only up-front financial costs, but also the cost of improving business processes, re-aligning staffing needs, customer experience and satisfaction improvements, and more.
However, your investment is not only about cost. New software and digital technologies also allow you to save money and grow revenue. When implemented correctly and with a solid understanding of your business’s core processes, new tools can:
- make your business more agile
- create happier employees
- streamline how you do business
- track changing customer needs
- bring the high-quality products and services they need quickly to market.
The key to achieving these benefits — whether cost avoidance, cost savings, or revenue generation — is for you to develop a compelling vision of how your business will operate after the new tools and process changes are in place and the benefits they will deliver. Then, share your vision early and often throughout your new software or technology implementation.
Conclusion: Avoid Change for Change’s Sake
Change is hard. Hopefully, one thing this blog post has helped you realize is that, sometimes, it may not even be necessary. But you can only determine that — and determine the shape your changes take — if you invest the time upfront in understanding your processes, identify your goals, and make sure your investment aligns with both.
Then, the sales work begins to convince leaders and stakeholders to sign off on it and to drive employees to adopt the new tools and processes. I’ll be exploring these topics and much more in future posts. Until then, keep improving!