Remember when the company was small and everything was done manually? It got a bit bigger and some automation was introduced. It acquired a number of other businesses – inheriting their systems – few of which were rationalised. It got even bigger and a home-grown system was developed to try to keep things together. Years later, after even more changes, various upgrades, patches and a lot of investment, the company decided to go SAP. But the direction from the top was “You can change anything you want, as long as you don’t change anything!”
The result was not much got turned off and the systems environment became even more complex. Changing anything became so complex and costly to make sure everything “talked” to everything else that improvements never delivered real productivity or better control outcomes. Systems chewed up a significant slice of the annual capital budget, but because investment had to be made on many different systems to keep them “talking”, the effect was that nothing really advanced, it just stayed functional.
The company’s competitors became more aggressive and margin pressures saw the ‘rivers of gold’ become a trickle. The cash-flow available to invest to increase long-term productivity and reduce operating costs dried up. The company was consequently ill-prepared to meet its competitors head on.
As some might say “What a way to run a rail-road!”
Some forward thinking leadership early on could have developed the policies and systems framework, such that a lot of this complexity could have been avoided. Furthermore, leveraging the master system to improve (in other words “change”) business processes could have seen a systems environment able to handle acquisitive and organic growth, at significantly less cost.
These are hard-learned life lessons. To avoid the ultimate DISintegration of your business, think integration every step of the way.