Two weeks ago I attended the GDS CIO summit in Dublin, Ireland. I had the opportunity to talk to many CIO colleagues, primarily about Digitalization and Digital Transformation. David Buttery, CIO EMEA of Ford; Anosh Thakkar, CTO Phillips; and others made clear that simplification of IT systems is one success factor of Digitalization. They have had to deal with and consolidate an overwhelming number of different systems within their organizations.
I had the same discussion with my own team. We all believed that simplification and standardization is necessary, although it was a gut feeling rather than clear understanding.
To bring more clarity in this topic, here are five aspects of how simplification will support digitalization in business.
1. Simplicity in Business Processes
Digitalizing business processes requires a different kind of thinking. In the old days, we accepted media disruptions. We passed information on by paper, or we allowed Excel sheets to process additional data. Hence, business processes needed less thought in the design phase. Excel, paper, and customization of the software would fix it. Because of this, employees needed to be in their offices to get work done. However, Gen-Xers and Millennials have a totally different understanding: they prefer to work from home and offsite at coffee shops or coworking spaces.
Considering this, we need to fully utilize our IT systems to support business processes. We do not want to share information on a piece of paper. Input and output trays have to be replaced by digital workflows. How can we utilize mobile apps if a major part of data is still printed on paper and stored within the four walls of an office? Maybe even with crucial handwritten notes on them? Having all data in one system will not only prevent back pain from crawling under the desk to find lost documents, it will save a tremendous amount of time. This is why we need to embrace digital transformation. We want to become more efficient in many ways.
As I wrote earlier in my blog, we have to understand that companies founded many decades ago suffer from long-established business processes that were invented when we had typewriters. Today’s startups don’t have to deal with this heritage. If they are smart—and most of them are—they will build digital business processes from the very beginning. And why shouldn’t they? Using a standard cloud-based ERP or CRM system will automatically lead them in that direction. Today’s systems are very mature when it comes to digitalization.
Simplicity in business processes means having one source of information and a strong urge to stick with the standard software.
2. Agility and Flexibility by Using Non-Customized Software
To customize or not to customize: That is the question! This question is as old as software systems are. When I started my career, the answer was easy: software had to be customized in order to support existing—sometimes awkward—business processes. Besides that, many functions were not available, but had to be programmed by the customer. Many people in IT still believe in this paradigm, and even more are trapped in an overwhelming number of customizations.
Using ERP systems or CRM systems without customizations will give you a couple of advantages:
- New employees will likely know the software you are using in your company, know exactly how this software is supposed to work. This understanding helps to prevent errors due to misuse of the software or misunderstanding of the customizations in place.
- Every good, standard software gets updated from time to time. Not having customizations in place will allow you to apply these updates, and utilize new functions in a very short amount of time. If you have customizations in place, you have to upgrade these customizations in order to use the new versions.
- Refraining from customizing your standard software gives you the chance to simplify the business process. Why transfer awkward, preexisting business processes to new software?
- All of the above reasons will lead to lower TCO (total cost of ownership).
In my blog post, “Ready, Set, Cloud—How to get Ready for the Cloud,” I stressed that getting rid of customizations is one of the most important steps towards using cloud systems.
Don’t get me wrong: there are cases where customization is inevitable. Modern ERP systems provide tools that allow customizations without altering the standard software. But again, before you change the behavior of your standard software to support your business process, make sure you really evaluate this decision.
3. Standardization by Using Less Software Products
In the past few years, we found that the tendency was to get numerous software programs for what we thought were unrelated tasks. Sometimes IT wasn’t even involved in making these choices! After the software was bought, IT departments soon found that it was necessary to interface these with ERP or other systems already in place. This often resulted in direct access to different databases, or other tools to connect the data.
Doing so leads to less transparency, high costs, and less stable systems. Whenever one of the systems has to be updated, each connected system has to be checked and, sometimes, interfaces have to be reprogrammed.
Simplification here can be done by three major approaches:
- Use standard, robust data interfaces that do not rely on proprietary systems.
- Prepare to connect different systems with new software at a very early stage. Make sure that new software can be integrated easily via standard methods.
- Finally, try to utilize existing software for the business rather than buying yet another system.
The old saying “Less is More” is so valid in today’s digital world. This kind of standardization is a major task for all relevant personnel, which includes management. This is about corporate culture.
4. Simplify Software Functionality
There is a tendency that Cloud-based Software (SaaS) does not provide the full feature set of rich client-centric software that one would install on their PC. SaaS providers do their best to get as close as possible to the locally installed programs, but they also have to allow the software to run on very different platforms, such as PC, iOS, Android, macOS, and Linux. They work hard to provide a great user experience on every supported platform.
We lose some functionality and we gain a tremendous amount of flexibility. Let me give you an example: Autodesk now pushes the 3D design software Fusion 360. They still support their rich software “Inventor” (and will do that for many more years), but using Fusion 360 gives businesses a huge amount of flexibility and freedom in their work.
Utilizing worldwide groups in the cloud to get work done may boost productivity to an unprecedented level. Currently, we need very powerful hardware to run a 3D CAD system. To discuss design details, you have to sit in front of your workstation and either let your colleague visit you or set up a TeamViewer meeting. This is not ideal.
With Fusion 360, you can casually discuss design details during your lunch break at Starbucks, and can even share your design on a tablet or smartphone! I have used Fusion 360 on my Surface 4 Pro Tablet with i5 CPU and it works great. I easily share designs on my smartphone and am able discuss them with my colleagues or friends.
Microsoft Office 365 applications in the Cloud are not as powerful as the PC versions, but there are still great functions. For example, entire groups of people can work on the same Excel sheet or Word document at the same time. The only limitation is that you cannot change a paragraph in Word or an Excel cell at the same time as anyone else.
This simplified process makes collaboration functionality more and more relevant to the way we work. We may lose a little functionality, but the value of gained agility and flexibility will greatly change the way we work in the future. It is a strategic approach to once more weighing risk and opportunity.
Let me summarize:
The IT world has become more and more complex. Businesses wanted to apply this IT to more and more tasks, but used outdated paradigms to make choices. This has led to excessive and needlessly convoluted systems. It is our task to simplify and standardize this by
- Using simple digital workflows
- Using the systems “as is” rather than customizing them
- Using software that may provide fewer functions but supply tremendous freedom for team collaboration
- Using fewer systems in the first place
It may seem like a contradiction in terms, but to achieve this simplicity, we have to face a highly complex task.
The purpose of this blog is to start a discussion. Please leave your comments, whether you agree or if you disagree. I hope to hear from you!