CIO 005 Take Another Look Created by James on 6/13/2013 3:28:55 PM
Most corporate head office buildings are unique and custom designed or selected for the business in question. Most corporate executives live in houses that are unique and distinct. Most warehouses and factories are custom designed and equipped.
Mechanical, Electrical, Civil, Industrial and other engineering disciplines as well as architecture and construction companies comprise a huge body of professionals whose sole occupation is the custom design, construction, commissioning and operation of buildings and infrastructure that are uniquely tailored to the requirements of individual clients whose needs are frequently similar at a broad conceptual level.
The essence of business survival is uniqueness expressed in terms of "competitive advantage". Corporations constantly invest in finding different and better methods of manufacturing, distributing, administering, operating, etcetera.
Yet, when it comes to business information systems, particularly "Enterprise Resource Planning Systems" (E.R.P.) there is huge pressure to conform. E.R.P. advertising positions big brand products as the only viable solution and successful corporations with existing systems that have supported the business to achieve its present size and profitability suddenly find themselves confronted with board room buzz that they should change systems.
Frequently this discussion takes place in the midst of deliberations as to how the corporation will remain competitive and grow in the decade ahead while executives seem unaware of the potential paradox associated with implementing the same software as their competitors.
The question is essentially the distinction between what is truly strategic and necessary for competitive differentiation in support of advantage and what constitutes mundane infrastructure.
In practice the complete information technology solution in any enterprise is a complex mosaic or jigsaw puzzle of standard components combined with uniquely specified elements that are essential to the competitiveness of the organization.
In many cases there is inadequate attention to the components that will contribute to sustainable competitive advantage and considerable focus on the utilitarian infrastructural elements that are largely common to every business. In addition, issues of training, intellectual property knowledge and experience investment in existing systems and related issues are frequently ignored or seriously discounted. Issues of data engineering, the structured definition of the content of the systems, are generally overlooked yet are often at the root of system under performance.
By way of example, a general ledger is a utilitarian application and there are many to chose from yet strategic value will be created by strategic focus in the definition of the chart of accounts, not by the product.
At the other extreme of the spectrum there are facilities that support the core strategic drivers of the business -- software that is optimized around the special and unique ways of doing things that distinguish the business competitively. Frequently such software will require measurement of soft measures of performance that are not being measured or recorded electronically in a manner that supports better competitive decisions. Replacing the existing systems and modules that are utilitarian in nature and in the process destroying the few that are really strategic will frequently give rise to competitive set backs associated with considerable cost for which no competitive advantage can be realized.
A sober review of many proposed E.R.P. replacement projects will reveal that disciplined expenditure of a percentage of the true cost of a new system on refinement and cleaning up of the existing system will generate a substantial real return on investment, particularly when combined with actions to strengthen competitive capability.
The best brand solution for your enterprise is quite possibly the solution that you already have.
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