Last week, my blog addressed why we are reaching the end of ERP systems as we know it. The reason for this statement – which may be news for some – is that there are simply too many enterprise technology options beyond traditional, “big ERP” systems to myopically assume that this one technology is going to be a silver bullet for your organization.
During strong economic times, companies often dive head first into their enterprise software initiatives without considering the multitude of options at their disposal. This may have worked for companies 10 or 20 years ago, but as Bob Dylan once said: “Times, they are a changin’.”
Looking at the big picture and understanding how various options do (or don’t) align with our overall corporate strategy are two of the biggest challenges with today’s enterprise technologies. Too many companies focus on technology without ensuring those technology decisions are aligned with overarching corporate strategies, which leads to overinvestment in irrelevant software and a poor return on investment.
Most of the clients we work with simply don’t have the luxury of accepting these dismal results. This is one of the key reasons why our enterprise and IT strategy service offering is one of our fastest growing areas of our business.
Below are five key steps to defining a well-aligned enterprise strategy:
1. Clearly define or understand your corporate strategy. Most of our clients have a fairly clear strategic direction, but just don’t know how to translate that into a meaningful and relevant IT and enterprise systems strategy. This is why many companies simply buy what is sold to them (such as shelf ware from big ERP vendors) rather than letting their overall strategy drive their purchasing decisions. On the contrary, best-in-class organizations clearly define their corporate strategy and convert into meaningful objectives that can provide clear direction on enterprise application decisions. Panorama often begins with a strategy articulation map to facilitate these discussions (contact us for a sample of this extremely important tool)
2. Translate your corporate strategy into an operational and business process strategy. This is where our clients often see a disconnect between the executive boardroom and the front lines of people designing and executing day-to-day business processes. If your strategy is to centralize operations across multiple offices and locations, then you will want to engage in business process management that focuses on building-shared service business processes. If one of your corporate strategies is to drive top-line revenue growth and increase market share, then you will want to focus your business process work on sales, customer service and other customer-facing operations.
3. Translate your business processes into organizational change strategies. Once you begin to define your business process and operational strategy, you will then need to define how your organizational change initiatives will support those “to-be” operations. You will need to define everything from skills that you have now relative to the skills you will need in the future, to the roles and responsibilities of all of the employees affected by these changes. In addition, you will need to address how those changes will be implemented using employee communications, change impact assessments, training strategies and other key organizational change tools. (Contact us for more information regarding how to leverage our organizational change methodology and toolset for your organization).
4. Define how technology can best support #1, 2 and 3. Notice that we haven’t even discussed technology in the first three steps of defining the best enterprise strategy. This is because technology should simply support the corporate, operational and organizational strategies that you deploy. Now that you better understand what you’re trying to accomplish from a people and process perspective, you can more effectively navigate through the confusing plethora of options available in the enterprise technology space: best of breed, cloud, integrated ERP, CRM systems, business intelligence, mobile applications, internet of things, eCommerce, HCM systems and hundreds of other possible strategies and tactics. Instead of myopically focusing on an ERP selection and implementation process as they have done in years past, organizations now need to focus on how to leverage the best technologies to help them achieve their goals.
5. Define strategic KPIs and benefits realization plans to maximize your return on investment (ROI). None of this matters if you’re not setting target levels of performance and measuring results. The most effective enterprise strategies include detailed metrics and key performance indicators that will determine expectations and define success. In addition, these metrics are translated into specific benefits realization plans that define how exactly your organization will achieve target levels of performance.
An effective enterprise technology strategy requires an independent, technology-agnostic and big-picture view of how to best align your corporate and IT strategies.
Be sure to check out our on-demand webinar, How to Define the Best Enterprise Strategy Roadmap for Your Organization.
Also, contact us and mention this blog to get a free enterprise assessment of your operations.