How to Leverage Technology to Optimize Your Business
Even though I have been working with ERP software solutions for more than a decade, I’m still at times surprised to find that even large, mature companies seem to struggle with optimizing their business processes across software systems and departments. Just like many small businesses, they’ve had a “brute force” approach to meeting operational goals as requirements arose. This practice results in an overall environment that can’t evolve and scale. Read on to learn several reasons why this sometimes happens as well as potential solutions to resolve these issues.
1. Legacy Systems and Technical Debt
Many companies have deep investments in legacy systems that may not integrate well with newer technologies. These older systems often lack the flexibility or agility to evolve with changing business needs, leading companies to patch and work around them instead of modernizing or replacing them. Doing so creates a situation where processes are clunky, manual or redundant across different systems.
2. Fragmented Software Ecosystem
As companies grow, they often acquire various specialized software tools to address different aspects of their business. Each department might choose its own software stack based on specific needs, resulting in a fragmented ecosystem of disconnected systems. Without proper integration or a clear enterprise-wide strategy, data and processes get siloed, making it harder to streamline operations.
3. Resistance to Change and Organizational Inertia
Companies tend to have entrenched processes and cultures, which can make it difficult to adopt new, more efficient ways of working. Even when there’s an awareness of inefficiencies, the scale of change required to implement a new, more cohesive system can be daunting. This inertia often results in companies resorting to workarounds rather than tackling the root causes of inefficiency.
4. Lack of a Holistic Process Design
Companies often view their business processes in silos, focusing on departmental needs without considering the end-to-end workflow. Doing so can lead to disjointed systems that may each work well on their own but don’t align or integrate effectively across departments. Designing processes from a holistic, enterprise-wide perspective often requires a rethinking of both technology and organizational structure.
5. Limited Data Visibility and Analytics
In systems where data is scattered across multiple tools, the inability to easily access or aggregate data leads to inefficiencies. Companies may rely on manual processes to move information from one system to another or generate reports, creating a “brute force” approach to data handling rather than a more automated, intelligent one.
6. Resource Constraints
Even large companies face resource limitations in terms of budget, time and talent. While they may be aware of the need to optimize their processes, the reality of doing so often comes down to prioritizing immediate, tactical needs over long-term strategic transformation. This reactive approach may stem from a lack of resources to fully assess and optimize workflows across the board.
7. Compliance and Regulatory Constraints
Mature businesses, especially in regulated industries, often have strict compliance and reporting requirements. These constraints sometimes result in processes that are rigid and require manual intervention or workarounds rather than allowing systems to function in a more streamlined, automated way.
Potential Solutions
To move beyond a “brute force” mentality with their software systems, organizations need to invest in:
- Comprehensive systems integration: Adopt systems and architectures that facilitate data flow between disparate systems.
- Process optimization: Conduct a process mapping to identify inefficiencies and redesign workflows for automation and better system alignment.
- Cloud and modern ERP systems: Transition to cloud-based systems that offer easier integration and more flexibility, reducing the complexity of managing multiple legacy systems.
- Data-driven decision-making: Leverage business intelligence and data analytics that can consolidate data from different sources and provide actionable insights.
Managing information technology is a constant journey. While it may be challenging to update and optimize organization-wide systems, doing so provides a significant return on both investment and effort in terms of organizational efficiency, agility and scalability.
Could you use help optimizing your organization’s software stack? At Creative Planning Business Services, we provide clients with the expertise and resources to innovate and secure their business processes. Contact us today to explore our services and learn how we can help take your technology to the next level.