Cost of doing nothing
Most organizations get paralyzed when committing to large-scale business application implementations. The fear takes over the rational decision-making process. The status quo starts to look like a good option. Doing nothing seems like the safest choice. Honestly, I don't blame the decision-makers. There is a big leap of faith when it comes to starting such large projects. They affect a lot of systems, people, and processes. It is like changing the engine while flying the plane. Yet, at the end of the day, I believe doing nothing has a much higher risk than other alternatives.
I have always thought of corporations as organisms. From the day they come to exist, they relentlessly struggle to survive and grow. They must constantly evolve to keep up with their environments. Let's not forget. It is not the strongest nor the most intelligent that survives. It is the one that is most adaptable to change that makes it at the end. This is very relevant in our fast-paced ever-changing business world. The consumer trends, government regulations, technology, and many other things are not in our control. Our environment constantly changes. If you are stagnant, you are doomed to fail. The environment will reward the ones - your competitors - that changed with it. They will dominate the market and you will become irrelevant. Unfortunately, the change itself is also getting faster. So, it is not only about whether you can change or not, but rather how fast you can change.
How can we break this chain of fear with rational thinking? How can we move forward? I think we need to focus on the value of the why. Companies have a gut feeling about what they need to do, but have a hard time explaining why. They cannot articulate the real business benefits of their projects and do not associate value with those benefits. They do not go through the trouble of assessing the value upfront. Since they could not quantify the value of their why, at the first sign of fear, they procrastinate.
Let's assume you have an AS400 based legacy ERP system that works just fine. It has been customized for over 20 years and runs like a clock. It can most probably run another 20 years if you like it to. Yet, the platform is slowly dying. Your IT department is losing the people (most of them retiring) and their skill sets are hard to find in the market. The new generation coming to work is appalled by the green screens. Your legacy system does not have the functions to support your expansion into new product lines, new channels, and new regions. In this situation, it is a no-brainer that you need a new cloud-based modern ERP platform. Yet, if you rush and do not take the time to quantify the expected value upfront, there is a high likely chance that you will do nothing. You must study the value of higher inventory turns, increased sales, reduced cost, improved margins, etc. - the true business benefits of what a new application platform can do for your company upfront. You need to make a case of how much doing nothing is costing you every day. That value assessment will protect you when the buyer's remorse settles in. You can use it to push your initiative forward.
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My name is Cem and this has been another gem.
