Surviving the Legacy Lock-In: The discussion you need to have with your CFO
Game of Thrones: The Clash of CFOs and CIOs
During my last visit to OPEX in Miami a few months ago, I was sitting with the CIO of a giant transport logistics company. He looks like he just bit into a lemon. Turns out his CFO just took a chainsaw to his IT budget.
He says: "We're just chucking dollar bills into ERP and PLM systems that have little value in my division. I don’t have a say in the matter and yet, I'm getting roasted for pathetic ROI on tech investments."
Sound familiar? Companies hop into bed with industry big shots like SAP, seduced by the sweet whispers of volume discounts. A sexy proposition, sure, but here's the kicker: these purported solutions are then rammed into the divisions whether they are a right fit or not.
Ladies and gents, enter what I fondly call the "legacy lock-in." It's like getting a slashed tire and continuing to drive, all because you got a "bargain" on the tires.
The Unhappy Marriage: Legacy Lock-In
Legacy lock-in is tech's equivalent of a loveless marriage. You're stuck with an antiquated, cranky beast of a machine that breaks down more often than a soap opera star. And why? Because ditching it is pricey and treacherous, or you're hooked on the fantasy of a bulk-buy discount. This forced matrimony with technology usually ends in tears, torpedoing success rates.
The fallout? It echoes the narrative that tech spending is a vortex, swallowing dollars and spitting out squat. You're on a revolving door to destruction where tech is the supervillain, budgets face the guillotine, and success is an ever-receding mirage.
This, my friends, is not the blueprint for a tech strategy. With the right play, IT isn't a sunk cost—it's the seed fund for your future growth. But as long as this dread and distrust cycle goes on, the future remains a pipe dream.
Jamming the Brakes on the Runaway Train
So, how do we halt this locomotive? Here's the truth bomb: the real value vampire? Shoving unfit tech down the throats of your divisions. Tech isn't a magic wand that fits all sizes. Every division in your company is its own unique creature with distinct needs, workflows, and hurdles.
Good news: we live in a world where bespoke solutions are more attainable than ever. These projects can be delivered to be secure, budget-friendly, and ready for action.
Cherry on top: engaging teams in building these platforms fuels enthusiasm and goodwill, combating the grim reaper of digital transformation - resistance to change.
To break the chains, organizations need to swallow the bitter pill: forcing divisions to use unfit tools is like expecting a fish to ride a bicycle. The fallout? Wasted hours, irate staff, and missed opportunities.
The secret ingredient to a juicy ROI from tech investments? Understand each division's context and give them some wiggle room. Slashing IT budgets year on year is cutting off your foot to save your shoe.
You’re probably not ready to go all in so how about this: earmark some funds to let teams play a bit. Let them test out new tools, rattle their processes, learn from failures use a bit of creativity. This can set the stage for customized solutions that amp up productivity, streamline operations, and ultimately, deliver the ROI you've been fantasizing about. The sparks of innovation ignite on the fringes, not in the boardroom.
Flipping the Script
Numerous organizations are faced with similar challenges, and it is imperative that we update our approach to IT spending to align with the cloud-based era of innovation we now live in. By doing so, we can fully realize the benefits of technology and use it to its full potential.
Only then can corporations crack the code of their technology investments and lay the foundation for a successful future. It's time to choose wisely.