Why you should (sometimes) let software run your business
- 12 April, 2017 23:36
Changing your business processes to match your software sounds like a classic case of the tail wagging the dog. After all, business leaders are responsible for deciding how their company is run, and software is supposed to support that, helping the company run as efficiently as possible.
Yet this is exactly what is happening in 82 percent of enterprises, according to a survey by TrackVia, maker of a low-code software development platform. These companies report changing a part of their business operations or processes to match the way their software works.
Is allowing corporate software to dictate how a company is run an abrogation of management's duty to manage, or can it sometimes be the best way to manage a company?
The first things to consider are what the software is meant to do and whether it gives your company a competitive advantage, says Forrester analyst Dave Balotelli. "Would it be better to change processes to match the software available where the business process is not highly differentiating to your business? Probably," he says. For example, he suggests that few, if any, companies need to run a bespoke email server when they could just as well use any one of the many free or low cost standard email servers and services that are available.
If you don't want to change specific business operations or processes because you believe they give your company an edge over the competition, then the software you use to run that part of the business must match your existing operations and processes exactly. And since every business is different, building a custom application is the most sure-fire way to get a software application that perfectly matches your needs.
But there are drawbacks to this approach, notably cost. Custom applications can be expensive, and the time frame for development is uncertain and often underestimated.
But it gets worse. While an application may be perfectly tailored to fit your operations and processes when it is commissioned, your company may grow, evolve and adapt to exploit new opportunities, technologies or other changes before the software is complete. That means that there is a real risk that by the time the software is ready to use it will no longer match the way you do business. You then have to choose between making changes to your business to match the software — which is what you were trying to avoid in the first place — or making changes to the software, which will take more time, more money, and offers no guarantee that the same thing won't happen again.
A less radical approach is to take an existing software product (which could be run on premises or accessed as a service) and have it customized to match your company's operations and processes — either by the vendor, by a third party or internally. "That can still be expensive and open-ended," Bartoletti warns. "You can spend two years customizing software, and every change you make can cost you millions." He adds that there is also a risk that you will end up out of sync with the base product's update cycle. That's because each time the base software is update it is your responsibility to test the customizations to ensure that they still work as expected with the base software and modify them as necessary. By the time this work has been carried out the base software may have been updated again — perhaps to include some of the functionality that your customizations provide.
By taking an open source base product and modifying the code to more closely suit your requirements, it may be possible to reduce the total cost of a modified application. This can be done using in-house or third-party developers, or, in some cases, it may be possible to have customizations carried out by the sponsor of the open source project, who should have developers with the appropriate knowledge of the software, and who will also be able to provide support.
But Bartoletti warns against expecting to save money by customizing open source software. "Open source used to be an alternative to expensive," he says, "but today you are making a multi-year commitment to an open source company to provide maintenance and support."
The lowest cost option, at first glance anyway, is to compromise by choosing an off-the-shelf solution that closely matches the operations or processes that you want to preserve (because they give you a competitive advantage). Off-the-shelf solutions are likely to have lower license costs since they are designed to be used by many different organizations and development costs are shared across a much larger user base.
The problem is that since an off-the-shelf solution won't match your special operations and processes exactly, your organization will still have to adapt to match the software. This process re-engineering will incur some costs, and there will be additional costs to retrain staff to work with the new processes. There will also likely be some amount of lost productivity as staff adapting to the new processes; even seemingly insignificant factors such as different terminology or nomenclature used by the software may require changes to the way your business operates, incurring more costs.
And so we get to the heart of the problem. It can be expensive and risky to develop a new application, or customize an existing one, but the benefit is that you can preserve the operations or processes that give you a competitive advantage. Or you can change your operations and processes to better match existing software, which involves giving up some competitive advantage, but there is less risk. There may be less cost involved too, but changing operations and processes have costs of their own.
The key question, then, is this: is the competitive advantage that you wish to retain as valuable as you think? Is how your business runs the best way, or has it evolved over time in a semi-haphazard way that is sub-optimal?
This is a business question rather than an IT question, but there's an argument to be made that many off-the-shelf applications incorporate best practices for many types of business operations — especially if the software is industry specific.
Put in that context, the fact that 82 percent of companies change their operations or processes to match their software may not be so shocking. It could mean that many of these companies are moving to a much more efficient and proven way of operating, with the handy side benefit that they can then take advantage of industry standard software without the need for expensive customizations. It also likely means that these businesses are finding competitive advantage not in their operations and processes but in the renewed focus on customer experience that is the hallmark of digital transformation.