How to Avoid the ‘Bright Shiny Toys’ Syndrome
Software doesn’t solve anything. Software is not the solution to any problem unless it is integrated into how you do business. Buying the latest ‘bright shiny toy’ is a waste of time, effort and funds and builds in ongoing costs and, often, constraints. Too often business management has been sold on the idea that software is a solution, install it and they (the expected benefits) will come. They need to be set straight.
Software Is Not the Panacea for Business Problems
Software is automated processes. It can undertake massive numbers of computations but can only do what is it told to do. It can’t instinctively remember that article from last year, take note of what competitors are doing in the industry or decide to ‘try another alternative’. It can only execute the logical steps it has been told to.
Buying software is never a panacea for but can be major cause of business problems. Badly installed systems create workarounds, constrain operations and compromise your competitiveness and profitability. When a systems project ‘goes bad’, the true cost is not in any cost overruns but in what damage it does to the business on an ongoing basis.
Can software be beneficial? Of course, immensely so when it is appropriately defined, design and integrated into business-as-usual. But it has an equal if not greater ability to destroy value when inappropriately used. There are multiple ways to destroy value and incur waste with systems—yet this waste is easily preventable if you remember three simple software selection rules.
1. If you select the wrong software, you are doomed.
A major corporation was persevering with a project that had just gone into its fifth year and more than doubled its original estimated cost. (Either of these factors should have caused the project to be stopped, but we digress.) Why was the project in trouble? Answer: It had bought the wrong software. It had selected the software on the basis of a series of required features and functions including:
- Does it manage meter readings?
- Does it generate invoices?
- Does it chase overdue amounts? Etc.
In this case what was missed was that the selected software was built to manage quarterly meter readings and invoices, but was being used to manage hundreds of thousands of meter readings per day, many with an immediate invoice required. The software was not designed for this type of use—which is why they were struggling to adapt it.
If this organization had defined its software slection criteria in process and information flow terms, the mismatch between how the processes were to work and how the software was designed to work would have be visible from the outset.
2. If you buy unnecessary software you are just incurring waste.
A major bank was proposing to install a credit management system—its third. Did this new system have functionality the other two systems did not? No. Why were they complicating matters and increasing the bank’s ongoing costs by buying a third system? Answer: the “shiny new toy syndrome”. This part of the bank wanted its own solution. It wanted to define, design and develop its own piece of software rather than use and adapt an existing “second hand” piece of (totally capable) software.
Experienced software salesmen are often amazed at how often organizations buy new software to do what their existing installed software already does. A vendor recently found one customer had bought and installed six new systems to obtain functionality their ERP system already had.
Before you buy any new software check to see if you already have that functionality embedded in some of your existing software.
3. If you don’t fully use the software you have bought you are incurring waste.
A major manufacturer spent tens of millions on installing a range of ERP system modules. As an exercise at the end of the implementation, the system implementer calculated how much of the modules’ functionality the company was using. Seven percent. Approximately 93% of the investment had been wasted.
Know what you want and only select the software required. Buying functionality you are never likely to use is pure waste. Also make sure it's fit for purpose—a government reporting requirement was estimated to cost $5 million to automate, but was addressed for $20,000 by hiring a temp for a few days a month to extract the data and generate the report.
The only solution is a business solution.
Business management—aided and abetted by vendors, systems implementers and consultants—often want to see the installation of a new software package as the solution to their business problems. But the only solution to a business problem is a business solution. This business solution may include a system as an enabler, but the software is never the solution in itself.
It is quite possible (and too often the case) that you can install a piece of software excellently that is worthless. NB Forty percent of projects still leave their organizations worse off than before. These ‘failed’ projects are often because at least one of the three rules above have been broken.
When business management asks for a new system, ask them:
1. What are the business outcomes you’re trying to achieve?
2. Which business processes and information flows are you addressing?
3. How do we know that we don’t already have this functionality?
4. Is there a lower cost solution than a new (or enhanced) system?
5. Is this really a priority now?
If they cannot adequately answer all five questions you are not ready to buy any software as you will not deliver much value.
Value delivery comes from business integration.
Remember: Your business runs on processes and information flows. Systems are automated processes and information flows. To be effective and deliver the optimum value any system must be integrated into your business’ end-to-end manual and automated processes and information flows to create a seamless end-to-end solution.
Too often, systems are jabbed into the existing processes and information flows, causing gaps, information loss, process inconsistencies and poor results.
This is unnecessary IF you select and manage your software on a process basis, as a strategic business project to deliver a clear set of business outcomes, and implement as a business change project.
It really is that simple.
FEEL FREE TO SHARE THIS BLOG WITH ANYONE YOU THINK COULD BENEFIT FROM IT