The environmental cost of legacy systems
Consumers are becoming more conscious about the environment and the adverse effects of their consumption. As their awareness increases, they are looking more favorably at environmentally friendly brands. In order to compete, many consumer goods companies are changing their behavior to become eco-friendly. They are evolving their products, services, and processes to reduce waste. One area that can have a significant impact but is mostly forgotten is old information systems.
We all know that people and processes do not exist in isolation. People need systems to plan and execute their decisions. Even companies with the noblest ideals and best intentions can’t achieve anything significant in the long run without good systems. In fact, you can cause more harm than good if you have a bad system. Let me explain why.
Like a good doctor, we should observe the symptoms but apply the cure to the source of the disease. In this case, the disease is a waste. The symptoms are excess inventory, increased costs, high returns, etc. Even with the most environmentally, friendly products, if we make too much, consume too many resources to produce and distribute, or make products that don’t sell, we are doing more harm than good to the environment
If you peel the onion and look at the source of these symptoms, you will realize that your systems are playing a big role in creating this waste. Most companies run their operations in different systems. This creates virtual silos within the organization. The functions are compartmentalized. The data is not shared under a common platform. The information does not flow freely across the organization. Key business metrics are not visible to all the players. There is no one version of the truth.
All these system issues then result in bad business decisions. You make the wrong things. You order too many. You send products to the wrong places. The supply chain is broken. You scramble to address these problems. You move the goods around. Expedite deliveries. Scrap excess inventory. Create waste. A lot of it.
If you can establish a single, global business application platform that runs all your financial and supply chain operations (manufacturing, distribution, retail) across all channels (wholesale, retail, e-commerce, catalog), you will make big strides towards being environmentally friendly company. You will break down the virtual silos, integrate your operations, share your data, let the information flow freely across the organization, and make the one version of the truth visible to everyone. And make good business decisions. As a result, you will make the right things. You will order them in the right quantities. You will send them to the right places. There is no last-minute rush to fix things. The waste is reduced.
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My name is Cem and this has been another gem.
