Is Your Business Software Limiting Your Business?

The rapid development of information technology and all types of business software yields a lot of possibilities for businesses and other organizations that were previously unavailable or even unimaginable. The positive effect of the mass adoption of business software is clearly visible and well known, and I am not going to pursue that subject here. Negative consequences, however, also exist.

In reality, businesses have become so congested and dependent on enterprise software applications that they are often not able to function outside the templates provided by software applications and their embedded so-called “best-practices.” Moreover, while software can resolve certain business issues, in doing so it can create other restrictions and limitations for companies.

Business Software Systems Have Inherent Limitations

Software as a rule lags behind business because it’s built to address existing business processes. The vast majority of software packages that are available on the market are developed on this principle. There is no chicken-egg dilemma with regard to commercial software—it’s almost always built based on real-life issues that someone has already faced. And if the software you implement drives your business well, it means that you have reached a level that someone else attained before you, and resolved a problem that at least one business has already faced. Your software cannot innovate for you on its own.

It is also a convenient fallacy to believe that business software systems are solely a good thing. It’s pretty well known in the business software industry that when you try to automate a messed-up business process, you’ll eventually get an automated mess instead of an improved business. Still, lots of people believe that buying and installing good software is a panacea for all their business woes. But your software can only automate what you already have.

Several instances of business practices happen rarely, or even only once. So there is no reason to buy or make modifications to existing packages to accommodate your unique business processes (see the article by my colleague Jorge García on "case-by-case syndrome"). The more business processes that can be repeated over time, the better suited they are to being run by an automated system. But know that your software will never handle every conceivable situation and there is always a room for non-standard or forward-looking processes that can only be done manually or using other tools.

Business software sets up certain frames for companies, sometimes very rigid ones, and can impose its business scenario templates on an organizations’s activities, while real business success is often associated with uncommon ideas, approaches, or processes that nobody else is using. Those unique processes can be a company’s real competitive differentiators—and they are not yet accommodated by any available software.

Your Software Should Work for Your Business, Not Vice Versa

If you don’t use business applications correctly, or if you use business software systems that were not selected or implemented properly, those systems can do more harm than good for your organization. We’ve all heard the horror stories, and about the resulting lawsuits, regarding overpromised and underdelivered ERP systems that companies and government structures were relying on to resolve their problems. But even besides the immense financial and creative overhead involved in purchasing, implementing, and maintaining a system, significant resources are regularly being spent on trying to adjust real-life business processes to a system’s built-in algorithms.

As a result, instead of adding more value to your products and services, improving current processes, and developing new ideas based on nontraditional approaches, you spend a lot of time trying to conform your business to the “best practices” built into the system—which may not necessarily suit your own operations, strategies, and business vision. You may eventually end up killing your own uniqueness and competitive advantages in order to adhere to common industry practices, ultimately adopting your competitors’ practices.

In other words, instead of looking for the best solution to a business problem first, and then selecting and adapting software to automate improved and optimized processes, organizations often look to software to solve the business problem.
Because of their nature, business software systems can impose additional artificial limitations on the organizations using them. For example:

  • Some business initiatives may be getting squelched because there’s no way to integrate them into the software within a reasonable time frame without significant and expensive system modifications that would require diverting both finances and human resources.

  • Both management and end users can come to rely too heavily on a system, and may be reluctant to embrace new initiatives if those initiatives can’t be integrated into the system immediately.

Put Your Business First, Software Second

Generally speaking, business software is primarily designed for stability, not change. Once you have implemented your software enterprise-wide, making changes to the ways you operate, and therefore to your business processes, can be painful and expensive. As a result, it is not unusual to see companies change their ERP or other corporate-wide systems because their current systems can’t accommodate new or updated processes.

It turns out that many business issues can be successfully resolved without using cumbersome software at all. The most impressive example I am aware of is on Toyota factory shop floors—not a computer in sight. Extremely complex and continually improving production planning, scheduling, and assembly execution procedures are performed using a carefully designed, highly organized process for the entire car assembly: precisely detailed operations, regular Kanban cards, simple but visual performance indicators, trained and responsible personnel, and so on.

Businesses have been improved greatly over the last few decades thanks largely to the information technologies and multiple software packages they use on regular basis. But I’d suggest that business management and regular users need to continue developing their business processes as needed, putting business priorities first and software priorities second. Organizations should capitalize on their software, not be handcuffed by it.
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