You’ll have to excuse the use of inverted commas in the title. One of the difficulties with the question posed is knowing where to draw the line between rigid and flexible and as such I’ve gone with ‘rigid’ to encompass systems where the cost of change, once implemented, is prohibitive when put up against something more flexible and easily configurable.
With that in mind, the reason for this article is to explore the idea that technology has progressed far enough to result in truly flexible, configurable systems being more cost effective for large organisations, not just in the long term but in the short too. It’s all very well having external consultants produce the perfect solution at the point of implementation, but, it won’t take long for the need for changes to arise.
As you’ll know, the ideal business model for most SaaS vendors out there is to have someone buy their solution and be able to provide it at the click of a button, no customisation, no fiddling, no time consuming changes, simply an out of the box solution that will solve every problem the customer has – and bring in some healthy recurring revenue for the vendor. That, or to implement a rigid solution that is heavily customised at the beginning with the idea being that in the long run there will be no need to make changes.
With the Enterprise market the first option is rarely going to be possible. Even if we stick to one particular sector there will be significant variations in how the internal processes work. For example, some companies grow aggressively by acquisition and as such will struggle to integrate all their new technologies they are constantly absorbing into a central/Shared Service function. Others will have a different growth strategy that will have resulted in completely different internal workings, they may even have just one ERP instance. A rarity, but it does happen.
The second option could be accepted as a good option. But with this in mind, let’s consider the choice between the rigid option and the flexible and configurable option.
The Rigid Option
If the solution is relatively ‘rigid’ then an awful lot can end up being asked for. At the very least, if the vendor signs the prospect, they are going to have to hope that the new customer trusts them completely. Especially when they announce that the first step is for them to completely restructure all their internal processes and workflows to fit with what the vendor deems to be ‘best practice’ (a phrase that too often means little, if anything at all).
That said, for a smaller company a rigid solution may work rather well. After all, internal processes/workflow are still being developed and there may be real value in the experience that a good vendor can bring to the table. There is absolutely nothing wrong with moving quickly in regards to digatising processes.
This really doesn’t work for the larger companies out there. With numerous intricacies to be considered, something that doesn’t work with the company in question will end up working against it and there will be no common ground.
For the midsized companies, or the newly crowned £1 billion turnover companies it’s a little different. In our experience they don’t tend to come into this conversation as they rarely enter the debate. They tend to invest heavily in what is perceived as safe and reliable, aka a software solution like SAP that is perceived to be blue-ribbon. A generalisation perhaps, but one based upon experience. This solution is usually an ‘Option Two’ as described in the opening paragraphs. This is good in principle. However, when the future isn’t accounted for, it inevitably results in significant problems. Change will always happen and often when least expected. Being able to make changes quickly and cost effectively can make a significant difference to the bottom line.
The Flexible Option
The other option for these companies, would be to work with a vendor who focuses on providing a flexible solution that can be adjusted easily to an organisations specific processes – in the long and the short term. Yet here we have problems too.
The first one is the preconception that this will be outrageously expensive, something that has unsurprisingly come about given the cost associated with making changes in rigid systems – which most companies are using. So, yes, it can be incredibly expensive with certain vendors and it’s certainly something to look at during the selection process. How much will the system cost you in the long run? Not just in making changes but in the ability to make those changes and the timescale associated with making them.
Another big issue is not necessarily technology related. It is marketing related. The overuse of words such as flexible, efficient, functional etc has made actually finding a solution that is in fact flexible, efficient or functional, very difficult. One option to get around this would be to spend time talking to analysts such as Gartner or Spend Matters who are often extremely knowledgeable. That said, not all analysts work with all vendors. It’s never going to be a perfect science.
Perhaps the answer is in use cases and doing your own research. Making sure your RFP is testing a wide range of vendors on the specifics that you would like and on how the future relationship can develop. If you are looking for a flexible solution, this can be a good way of drawing out the best vendors. If the model allows your organisation to make changes internally, with far less reliance on the IT vendor, then there will be significant saving in the long run.
Which one should you go for?
There are pros and cons on both sides and every organisation will have different priorities.
This one argument should be made though: If flexible solutions are available at the same price as rigid solutions and are considerably cheaper in the long run, it may well be that we are about to see a big shift in the market. One in which far more control resides with the organisation that has bought the software, where changes are quick, easy and cost effective.
For many vendors, this is something to aspire to. But for a select few, this has become a reality and an exciting one at that.
Just as a final point, there is one option that should just never be done. Well, two. The first is using software that isn’t relevant to the sector, for example, Salesforce to manage your Supplier Data Management needs. Whilst most software solutions are simply digital workflows the fundamental difference is the expertise within the sector. Not having this expertise can easily result in opportunities and problems being missed with implementations easily taking years and eating up internal resources and finances. The other is a mistake you’ll only make once. Selecting a completely bespoke solution to your problem. It’s dangerous. You’ll be reliant on the same people going forward, costs will spiral, expertise will be lacking and flexibility will be costly.
Flexible or rigid, configurable or customised, ultimately the decision is an easy one, what will support your company best, now and in the long term as the world around us changes.