The agile organization
On my flight to meet with internal auditors at their company’s annual IA conference, I sat next to a partner in the advisory practice of Deloitte. He helps the finance organizations of his clients in a number of interesting ways, including process engineering.
One of the types of projects where he is asked to assist is the implementation of ERP systems. The concern of the finance team is that their interests would be insufficiently addressed during the 2-3 year project.
I can understand that some companies may not have the bandwidth or the expertise in-house and go to one of the large accounting firms, like Deloitte, for help. (I asked about other firms, such as Accenture, and he confirmed that they are also a major player.)
What I have more difficulty with is the idea of a 2-3 year ERP implementation.
How can we be confident that we know what the business will look like, and what our needs will be, in 2-3 years?
Organizations of all stripes (private, public, government, NGO, etc., etc.) and in all industries need to be agile.
They need to be able to react promptly and with confidence, if not anticipate, change.
If I was on the board of a company where management told us that they wanted to take such a long time to implement a new system, I would be highly agitated!
ERP systems cost a ton of money, and I would challenge management:
- Can the business wait two or three years to have its IT needs met?
- Won’t those needs change over that period?
- Will there be an acceptable return on investment for the project?
- Isn’t there a better, more agile way to meet our current and future needs?
As an executive, I would be asking the same questions.
As head of internal audit, I would sit down with the CEO and share my concerns.
If we are not agile, we may perish.
The IT industry is moving towards faster delivery of services, using methods like DevOps.
Amazon Web Services (AWS) explains:
DevOps is the combination of cultural philosophies, practices, and tools that increases an organization’s ability to deliver applications and services at high velocity: evolving and improving products at a faster pace than organizations using traditional software development and infrastructure management processes. This speed enables organizations to better serve their customers and compete more effectively in the market.
I attended a conference in Las Vegas last year organized by Gene Kim of IT Revolution and was excited by the progress I heard from companies using DevOps.
If you want to learn more, I recommend Gene’s website and the book he wrote with Kevin Behr and George Spafford, The Phoenix Project.
Don’t let IT stop your organization from being agile, ready to change as the environment changes.
In fact, consider whether your management team (and board) are sufficiently agile to survive.
I welcome your thoughts.
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Norman Marks on Governance, Risk Management, and Internal Audit 
Norman, I assisted the introduction of Oracle Financials into a large company. Won’t the needs of the company change in 2-3 years? Of course, they will change over the course of introduction as well as the years the system is in operation. That is why any system chosen must be flexible. It’s better to choose a system which meets 80% of requirements in the first year of implementation and 80% in the tenth year than 100% in the first year and 50% in the tenth.
However ‘agile’ a company is, implementation takes time. Staff affected must be involved from the very start, and they have day jobs. You can’t hurry user acceptance testing and. training. My experience of using outside consultants is that they slow down implementation since they have to spend time learning.
My ideas are at http://www.systemsimplementation.co.uk
When SAP bought BusinessObjects, they insisted that we migrate from Oracle to SAP ERP in 6 months – which we did.
The point here is that in the “old” days, it took a long time to implement new systems.
We can’t afford that now, when the business environment is moving fast.
If you can find a solution that will address 80% of your requirements in one year, that is better than waiting 3 years to complete the rollout.
But its better still if you can address the 80% or more in one or two months.
Norman, in the ‘old’ days it took as long as was necessary to deliver a properly working system. In the systems I was involved in, nobody was looking to slow down the implementation. If there was any delay, it was usually as a result of senior management making late changes.
There are faster ways of implementing systems, due to advances in implementation software, but speed cannot triumph over quality and safety.
I am fascinated with AirBnb’s blog on Medium.com.
It gets real techy, but the writers do a great job showing what they are doing, and why, with excellent diagrams. They openly explain the interworking of their systems, and because of this are constantly improving. (i.e. staying flexible). They take Agile methodology and available technology that’s out there to the next level. Here is a good example of their payment processing infrastructure, along with interesting discussion by engineers and developers inside and outside the company: https://medium.com/airbnb-engineering/rebuilding-payment-orchestration-at-airbnb-341d194a781b
My point is that I think you are right. Companies like Airbnb would not implement some kind of old, inflexible ERP system with a 3 yr implementation plan that you mention in your post. They focus on the basics.. keeping customers happy and making money. They seem to strive to make tech work for them, not the other way around.