Malanaphy Consulting, LLC

By Brian Malanaphy

If you’ve ever remodeled a house, or portions of a house, you know how important it is to do as much up-front planning as possible. Pre-planning eliminates costly mistakes and enables your remodeling to be done quicker, cheaper and better.

In the same way, pre-planning for your company’s needs should be put into place. Depending on the size and complexity of your business, performing an overall systems “remodeling” plan can be a mandatory and critical task. The right planning serves many functions:

•  It establishes initial budget estimates.
•  It ties directly to business requirements.
•  It establishes what the new system infrastructures will look like.
•  It justifies and confirms which system components get replaced or upgraded.
•  It prioritizes which tasks or projects begin and the order in which they proceed.
•  It identifies the gap between the existing “as-is” system environment and the “to-be” system vision.
•  It identifies the gap between the existing, “as-is” manual business processes and the “to-be” automated business process vision.
•  It identifies roadblocks, pitfalls and problem areas up-front.

A business is different from a house in that a house is static and unchanging, but a business is required to constantly change in order to remain competitive. Even if a business manufactures, sells and distributes a fairly mundane product in a consistent market, it still needs to react effectively to always increasing competitive forces.

Developing and implementing a strategic systems plan can be like trying to hit a moving target, but that is all the more reason to spend the time and effort to complete a plan and to modify it as business requirements change. Although a remodeling project can be completed in a few months, upgrading and implementing new computer systems can sometimes go on for years before being ready to be deployed to end-users. Mistakes can be costly if the right planning is not done in advance.

Many companies seek outside consulting help after attempting to plan, select and implement systems on their own. Sometimes their own internal IT staff lacks the necessary experience and skills to do the correct project planning and execution. Sometimes they have the skills but are too busy with daily responsibilities to spend the time required on planning. In any event, bringing in an outside consultant is like bringing in an architect, or licensed contractor. It will cost some money to hire them, but the results will be attained faster and be better than if you tried to do it on your own. The biggest reason to bring in a consultant though is to avoid the risk of making the mistake of implementing the wrong systems at the wrong time. As you can imagine, poorly selected and poorly implemented systems not only can cause undue hardship on employees, but more importantly, will limit the ability of executive management to utilize information to make effective decisions.

For example, if the vice president of sales is unable to get any type of reporting on the effectiveness of sales promotions, how does he know which sales promotions are most successful? How does he know which are ineffective and even counter productive?

With today’s computer systems, it is possible to capture and report on nearly every transaction that is made by an organization. Some companies, however, don’t know which product categories are their most profitable. Some don’t know what it cost them to produce, market, sell and service a product. Other companies have this information, but it’s not in the computer system … it’s on paper in filing cabinets.

It might be possible to hire a person to track down, gather, sort, summarize, verify and produce a report on last months sales, but it would be costly and by the time a report was completed, it would consist of old information that would have limited usefulness.

All of these symptoms illustrate the need for a strategic systems plan. Common signs for a business that would be a good candidate for such planning includes:

•  Many manual processes and procedures.
•  Pre-printed forms that are required to be filled out by hand.
•  Over-reliance on the re-keying of data into spreadsheets to produce reports, forecasts, models and budgets.
•  Re-keying data from one system into another.
•  Antiquated, inflexible core business applications (Accounting, Sales, POS, Inventory, Manufacturing, Human Resources, Payroll).
•  Custom applications developed years ago on obsolete platforms.
•  More time spent processing transactions than using information to make management decisions.
•  Lack of accurate and timely reporting.
•  Non-integrated applications on dissimilar platforms.

A strategic systems plan starts with a review of the overall business strategy of your company. Are you going to continue to sell the same products and services, or are you expanding your product lines? Will you open new sales channels? Will you begin selling on the Internet? Are you planning on slow steady growth or aggressive growth? What are the main concerns of executive management? Key business requirements need to be identified and documented.

After the business strategy and requirements are understood, a detailed review of the current hardware, software applications, databases and network infrastructure needs to be completed. This requires inventorying and mapping systems and creating diagrams of the relationships of systems to each other, to end users, to customers and to suppliers.

Focus groups should be held to brainstorm and determine the future systems vision or the ideal way that the systems environment will support the key business requirements. Various systems scenarios need to be identified. High-level budgets need to be developed for each scenario. Then the most reasonable and cost-effective projects need to be selected from those scenarios. After the top-priority projects are selected and after all company stakeholders agree that those are the most important projects to pursue, a detailed workplan for each project should be developed. These initial projects are short-term tactical projects. Other important projects that follow-on to these projects are longer-term, more strategic projects. All of these should be included in the plan. Over time, as circumstances change, the systems plan should be adjusted and modified to best match evolving business requirements.

As you can imagine, just as planning for a home remodeling project can be a complicated and laborious task, so too can strategic systems planning. However, the right planning and the subsequent implementation of the right systems enable your company to have a bright future and be a leader, rather than a laggard, in its market.