Todd Sherman
Consulting Manager
BlumShapiro

In our last newsletter we introduced the concept of reviewing and assessing the alignment of your business software technology with your business strategy, processes and people.  You might wonder how your business software could get out of alignment in the first place and what impact it could have on your business. It is important to understand how to recognize the symptoms and be able to make critical business decisions for your business when the time comes.

Does your software adapt with your business?

No matter what the current state of the economy, successful business leaders constantly update their business strategies and practices to achieve prosperity and success.  Does your business software support those changes or interfere with them?

Whether the right strategy for your organization is growth or right sizing, acquisition or divestiture, going public, entering new markets, supporting new supply chains or adhering to new standards — you need the software tools and change management skills to help your business adapt and succeed.  Your processes and people will not be properly aligned with your business strategies if your existing software cannot provide the necessary tools.  This can lead to inefficiencies, lack of agility or information and risk.

This article will explore:

  • Some common strategic changes that can test software adaptability
  • Common barriers to software adaptability
  • The impact of poorly aligned software
  • The symptoms of poorly aligned software
  • Solutions for aligning people, process and technology

Strategic changes that can test software adaptability

Strategic initiatives can create new requirements that existing business software applications, processes and users often have difficulty adapting to.  Common examples include:

Organizational changes

  • You started as one company with one site – now you have multiple companies and sites
  • You need to plan production and fulfillment across business units or sites and transact between them more efficiently and recognize inter-company profit
  • You want centralized customer service, finance or purchasing operations
  • You have to support field sales people or manufacturer reps with remote access to information

New markets/globalization

  • New customers require you to bill in foreign currency or charge tax
  • You have begun doing business in countries with local financial reporting requirements
  • New overseas operations require 24/7 operations and application screens in different languages

New product lines

  • New products require new manufacturing modes like engineer, make or configure to order
  • You require more robust product life cycle management such as version and quality control
  • You have new compliance requirements such as serialization or lot traceability

Supply chain

  • Your customers and suppliers are requesting real time on-line access to supply, demand, order and account status
  • You need to provide on-line ordering with credit cards
  • Several of your best customers are asking to do business using EDI
  • You’re considering outsourcing fulfillment to a 3rd Party Logistics provider

Common barriers to software adaptability

There are many reasons why a business’s software cannot easily adapt to new strategic requirements.  Some of the most common include:

  • Entry level software that was never designed to support the growing complexity of the business
  • Old or highly customized software that is no longer being updated or supported by the vendor
  • Multiple point solutions addressing specific business requirements have become difficult to make work together and even harder to easily adapt to changes
  • Multiple business software applications (often inherited through acquisition), which are even more difficult to make work together and adapt to change than the point solutions mentioned above

The impact of poorly aligned business software

Poorly aligned software will ultimately result in:

  • Inefficient business processes
  • Lack of agility responding to business partners and markets
  • Poor information access
  • Increased risk

The symptoms of poorly aligned business software

Inefficient business processes

Inefficiency is often a byproduct of implementing new business strategies, which in turn, introduce new business requirements.  Having software that cannot adapt properly to these new requirements can cause inefficiencies or fail to take advantage of potential synergies.  For example:

  • Poor coordination between departments, business units, customers and vendors
  • Lack of automation and many manual steps, pass-offs, queues and approvals
  • Inability to easily learn, monitor, measure and complete process activities in a timely fashion
  • Redundant and error prone data entry or busy work that fails to add value
  • Complex work instructions that require accessing multiple applications and screens

Lack of agility responding to business partners and markets

Lack of modern software capabilities can make it difficult to be more responsive to your business partners or prospects, leaving your business behind your competition.  For example:

  • Difficulty eliminating internal organizational complexity for customers and vendors
  • Inability to share information through customer and vendor portals or EDI
  • Poor order fulfillment and delivery performance
  • Reactive versus proactive response to significant business conditions, such as stock outs
  • Sluggish business software response time

Poor information access

A poorly aligned software environment will make timely access to comprehensive information extremely difficult.  Examples include:

  • Batch processing or periodic delays to current information
  • Rigid and complex data reporting and analysis tools
  • High use of spreadsheets to fill reporting gaps
  • Information spread across multiple software applications and screens

Increased risk

A poorly aligned software environment introduces many risks to the organization over time.  Perhaps your auditors have already commented on some.  Examples include:

  • Inability to easily monitor key business indicators and performance trends
  • Inadequate application security, separation of duties, fraud detection and process controls
  • Challenges adhering to compliance requirements
  • Inadequate business continuity and disaster recovery mechanisms

Solutions for aligning people, process and technology

Are you experiencing any of these symptoms?  Sometimes efficiency, responsiveness and risk are not a focus until an organization experiences competitive or economic pressure.  It can certainly inhibit growth, especially as economies and markets recover. Businesses can improve by designing and implementing practical solutions to better align their business software technologies.  Companies can remain competitive and successful by leveraging modern software technologies such as:

  • Cloud computing and software as a service
  • Business process workflow automation, alerts and activity monitoring
  • Master data management
  • Business Intelligence, KPI Dashboards and Corporate Performance Measurement
  • Modern and highly integrated ERP business applications
  • Web services integration

BlumShapiro can help by performing a Business Enterprise Review (BER).  We can quickly help you develop a business software alignment strategy at a reasonable cost.  Learn more about our BER service at: http://consulting.blumshapiro.com/services/business-solutions/Business-Enterprise-Review

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