Standalone Software Complicates Business
Standalone software can cause business processes to be complicated often resulting in duplication, deterioration of services and has an impact on profits.
As a business grows, its systems become more complex as it recruits more people to service more customers and offers more diverse products.
Over time, standalone software systems that have been deployed to make business processes more efficient begin to affect the productivity of the organization.
Leaders need to recognize the complexities created by separate or poorly integrated software systems and identify ways of simplifying these issues.
The Cost of Complexity
Many businesses start when their founder identifies a problem. Their first step is to offer a product or a service to solve that problem. At this stage, the founder often undertakes all tasks, from sales and customer service through to invoicing.
As the business grows, the founder hires people to perform these functions and implements software systems to support them. These systems include email, word processing, spreadsheets, contact management, accounting software and other solutions that may be unique to that industry.
Individual business units then evolve or select new systems to meet their changing needs and comply with new policies and regulations.
While each system may work well within its division of the business, they often integrate poorly. This, in turn, leads to inefficiency and inaccuracy due to data entry having to be repeated as siloed information is invisible to the broader business.
Complexity can be costly. Standalone, inefficient or duplicated systems cause slow service and product delivery undermines customer service and impacts profits.
A study of data from the Children’s Medical Center in Dallas reported that on average a duplicate medical record often caused by unintegrated systems costs the organization more than US$96.
The study also revealed that four percent of cases involving confirmed duplicate records had an impact on critical care, each incurring an average of US$1100 in unnecessary tests or treatment delays.
The Simplicity Cycle
The answer to excessive complexity is simplicity. However, simplification is a double-edged sword. While complexity is linked to cumbersome, complicated, and convoluted processes, oversimplifying essential systems has a detrimental effect on the competitiveness of a business.
Business author Dan Ward describes this challenge in his book, published in 2005. According to Ward, companies become increasingly more complex in order to service markets and customers, manage technology, supply chains and make effective commercial decisions but organizations reach a nexus at which point they must simplify – or risk becoming too complicated to be effective.
Failing to recognize that complexity has become problematic can incur a technical debt that is difficult to repay. Being aware of these signals and investing the necessary resources to simplify business systems can propel the business beyond the constraints of complexity into market-leading performance.
Simple Steps for Consolidation
The ideal combination is when business systems eliminate complexity, simplify tasks for employees, reduce operational risk and makes it easy for customers to buy products or services.
The following four-step process helps businesses to identify their requirements and how simplified and integrated software systems can meet those needs.
- Document business objectives to define what and how the business delivers value to customers. Recognize that many systems may have been selected when software choices were less comprehensive and business goals may have been different
- Map business processes through value streams, identifying software programs used to manage each process and how they are integrated
- Evaluate how this software helps achieve business goals and then examine alternatives
- Consider emerging technologies that may deliver greater long-term value for the business
Before undertaking any changes, it is important to recognize that software systems should serve the overall business, not just an individual employee or a business unit.
While employees often resist change, a well-considered decision and transition training will improve efficiency for both the business and its employees.