Business is hurting
from the lack of the right tools and enablers, we need a good dose of IT to
create efficiency. We acknowledge the need to transform and that is why we are
talking; the team also agrees with the direction and the way forward. The
benchmark results are well received and we would like to be in the top quartile
of the industry. We should create the framework for evaluation of options to
our specific requirements before we finalize on the best option and let’s work
to an aggressive time line.
The CEO intuitively knew, to take performance to the next
level, technology has to play an important role. Coming in of global competitors
had started slowing growth and put pressure on profitability. Operating margins
and other business metrics were lagging behind; survival was not at stake but
to stay relevant to major customers, the business begged for technology. The
absence of mature IT leadership posed additional challenges in execution of the
strategy defined through a technology consulting engagement.
Early investments in technology solutions had not delivered
to promise; early decisions were taken by the business based on promises made
by vendors on business benefit. Business participation in the project waned
quickly as technology formalized processes and exposed lacunae in operations. People
on the ground resisted the change creating roadblocks – real and imaginary –
towards deployment. The cycle repeated itself a couple of times leaving
everyone frustrated and wondering if technology will ever deliver.
That was before global players invaded the market changing
the way business was done, improving customer satisfaction and driving profitable
growth became an urgency. Even with higher overheads and manpower cost, they
delivered; in came Consultants offered a mirror to the business and helped them
with a well-crafted plan and strategy; technology strategy followed. A new CEO
added to the excitement with experience at competitors. Culmination of events necessitated
that the company reach a decision rather quickly.
In a perceivably low margin business where the average
margin was half of the best, it was evident that operational efficiency can
gain significantly with the right IT interventions. Industry specific solutions
and generic options competed on functionality and price with a wide variation
in between. An all hands meeting agreed to the strategy and initial steps
enthusiastically committing resources and time. With negligible investments
thus far, in parallel the Management decided to approach the Board for budgetary
approvals.
The Board members had diversified business interests with
business operations of varied size; they were also parsimonious in their
approach to investments especially technology which was seen as necessary but
not essential. Thus while their companies had grown in size and reputation,
they had not been able to realize the true potential while newer competitors
had moved ahead. The minnow in the family thus started from a disadvantage when
the CEO put his case across for investments in technology.
Discussions went back and forth on various technology
options, merits of one over the other, cost of acquisition and support, TCO
(Total Cost of Ownership) and business benefit; the figures appeared obscenely
high even though they were competitive and in line with benchmark investments. For
the Board reality was that other larger entities in their bouquet too had
rarely invested similar amounts barring the initial stages for industry
standard ERP solutions. They finally approved a significantly reduced number
which turned the project into a non-starter.
The business case was clear in identifying the benefits –
financial, customer satisfaction, growth, profitability – the ROI was less than
a year; but past experience made the Board wary of committing to the
investment. Ensuing “What if” had no answers beyond a point; there are no
certainties, only probabilities of success. The sanctioned budget did not cover
basic costs even if executed in phases to demonstrate potential success. Risk
mitigation strategies can be created for most action plans, the keyword being
“action”.
Except in cases of some of the new technologies and
innovative digital models, most of the solutions – vertical or horizontal – have
successfully established credibility to deliver business value with discipline
of execution and leadership oversight and endorsement. Phases can reduce risk
if logically broken down with continuity in the journey. Processes if left out
of design consideration will fail to provide the end result. Analysis paralysis
can miss opportunities that become clear only in the future, status quo breeds
mediocrity.
Years have passed since the above happened; they are still at the same milestone the debate continues, they are yet to decide and the industry continues to grow rapidly !
