Reactive vs. Proactive Decision Making in Technology

Decision-Making-in-Technology

“If the rate of change on the outside exceeds the rate of change on the inside, the end is near.” – Jack Welch, former General Electric Chief Executive Officer

There are many organizations that do things the ‘old-fashioned’ way. They don’t welcome new technologies that boost organizational performance, increase the flow and security of information, and most importantly, save time. The mindset of “if it ain’t broke, don’t fix it” or “we’ll cross that bridge when we get there” dominates many small to medium sized businesses all over the world.

This is not to say they don’t use any technology. They start their business by communicating with e-mail, purchase an accounting software to manage bookkeeping once they start hitting stride, bring in an inventory management or customer relationship management system to track revenue, and perhaps add one or two more applications for their business specific purposes. And just like that, they have several different applications, some of which are hosted, legacy applications which they can’t live without, but are also slowing them down at the end of the day. This is what NetSuite referred to as a “software hairball” which inhibits flexibility, productivity, and slows down a company’s ability to grow.

With technology offering so many competitive advantages, the question is: why do businesses still operate with legacy software and make reactive decisions regarding their IT strategic planning?

1)   Harish Venkat, Vice President of Oracle, suggests this is because CIOs are spending too much of their IT budgets on “run the business” technology and not enough on true innovation. The statistics he mentions are astounding; 

–      60-70% of spending to keep the lights on

–      20-25% for brand new opportunities

–      8-10% for knock-your-socks off, differentiating innovation.

2)   Steve Olenski, member of Editorial Journal of Digital & Social Media Marketing, suggests that this reactive culture requires companies to rethink processes and retrain people in a well-planned, coordinated way while having to continue to operate their old business model, which can be overwhelming.

Perhaps that’s why the average life span of an S&P 500 company has reduced from 65 years in the 1960’s to only about 15 years today and also why more than 80% of Fortune 500 companies from 20 years ago are no longer on the list. As forward thinking, proactive organizations which embrace technology continue to gain a competitive advantage, companies that operate with a reactive mentality are putting themselves at great risk including but not limited to:

–      Wasted employee productivity

–      Lack of real-time visibility

–      Integration complexity and cost

–      Increased customer churn

–      Going out of business

If your business is experiencing some of the problems mentioned above or other issues, it’s time to rip off the Band-Aid solutions and solve the deep rooted problems caused by technological bottlenecks.

Cory Crosland, president of Croscon Croscon, suggests focusing on integrated software that can reduce time and increase the pace of innovation. He particular refers to open source software which needs little or no coding, significantly shortening build times for business-line applications.

According to Nucleus Research, SMEs that adopt new business management solutions have reaped the following benefits:

–      Process integration (54%)

–      Resolve order processing issues (50%)

–      Replace outdated hardware and software (50%)

–      Resolve data duplication/errors (38%)

–      Reduce excess inventory (34%)

Other benefits of integrated software applications include:

–      Process efficiency across the organization

–      Dramatically improved visibility

–      Significant IT time and cost savings

–      Accelerated growth

–      User-driven innovation

Did this article bring up familiar pain points or desired outcomes for your organization? If so, contact us to learn about how Sirma Enterprise Platform can right size your organization’s information management systems in the present and prepare you for a bright future ahead. Contact us for a quick demo.

Thanks for reading,

Shamit Patel, Sirma Enterprise Systems

Resources:

BoCount Dynamics. 2016, October 8. Why SME’s adopt new business management solutions. Retrieved from http://www.bocount.net/en/why-smes-adopt-new-business-management-solutions/

Crosland, C. 2016, June 7. How software drives innovation and enables digital business. Retrieved from http://www.cio.com/article/3079864/innovation/how-software-drives-innovation-and-enables-digital-business.html

NetSuite. 2017. Benefits of an Integrated Business Software System. Retrieved from http://www.netsuite.com/portal/resource/articles/software-system.shtml

Olenski, S. 2016, June 8. Adapt or Die: The Dangers of Hanging Onto Legacy Technologies. Retrieved from https://www.forbes.com/sites/steveolenski/2016/06/08/adapt-or-die-the-dangers-of-hanging-onto-legacy-technologies/#3632982051c1

Venkat, H. 2015, April 27. Adapt or Die: The Digital Disruption Imperative. Retrieved from https://www.forbes.com/sites/oracle/2015/04/27/adapt-or-die-the-digital-disruption-imperative/#212f2ae645d4

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