The Back-Office Challenge

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If you Google the definition of the High-Tech industry, it becomes pretty clear pretty quickly that the definition is as broad as it is deep. Companies who see them self as high-tech range from manufacturers of advanced materials, to developers of gaming software, to the engineers responsible for designing and installing audio visual solutions for entertainment venues.

The bottom line is that organizations that are involved in the supply of products and services enabled by technology are wide and varied. They are as much defined by the markets they serve and the customers they sell to, as the supply chains they participate in. Some examples of these organizations include:

  • Design and develop products and services that are based on technology and technological advantage.
  • From builders of software applications, to builders of consumer products, to builders of high value custom “solutions” that include technology (Typically defined as manufacturers of electronic components, semiconductors, electronic devices & equipment, software and services)
  • Serve public and private sectors, local and global markets, commerce and industry across the economic spectrum.

Ask the Landscaper About Their Yard

There are, however, some common characteristics that everyone participating in this part of digital economy share.

For example, the speed at which technology is advancing means we all have to move a lot faster to keep our products and services current. Somehow, we have to match the pace of new technology discoveries entering the marketplace.

At Sikich we sell, deploy, and support technologies that help our clients achieve more. The rate at which the products we work with is now changing so fast that we too are having to standardize, streamline, and automate the processes we use to deliver working solutions to our clients. Continuous learning is now the status quo, especially for our technical and consulting teams. There is simply no time to sit back and call a job finished.

The other thing that is common across those who work with technology is that almost all of us have a longer-term relationship with our end customers than just the initial sales transaction. We provide updates, upgrades, and new versions. We provide help desk services and support. For larger installations, we provide in-field service and support. We also sell add-ons, extensions, training, and other value-added products and services.

Lastly, technology focused organization’s own operational technology, the back-office stuff, commonly looks like the proverbial mechanic’s car. So much effort and investment is spent on developing and building high-tech products to sell and get to market, internal systems can often be left way behind. Technology and engineering skills are in what you do, not necessarily how you do it.

What Back-Office Technology Do You Use?

If you are reading this post and you work for a high-tech company, you might want to consider what the technology that you use to run your business looks like. Now to be really clear, I’m talking specifically about ERP and also CRM—the back office favorites.

In our experience, we find those who excel in bringing the coolest things to market, often do it with a technology foundation firmly rooted in 90s technology, with integration duct tape, complex data repositories sitting in standalone access or SQL databases, data silos, a number of “internally build business systems,” and maybe with a little bit of BI for lipstick. It’s particularly hard for those businesses who have software development at their core. I cannot count the number of times I work with organizations who use their own in-house developers to build their operational business systems. These guys and gals are experts in creating games or applications for their own customers to use. They definitely do not have a background in business apps.

Now, let me be the first to say that it is not a mystery to me why you would want to build your own business system. The makers of these applications are ripe for disruption. Furthermore, I believe the software vendors that build business apps have created for us a real challenge in our back offices, especially with the lack of ERP system progression.

And that challenge has manifested in a variety of ways.

  • The proliferation of new cloud solutions across the enterprise, holding data that is not connected to the back office. Purchased by people who got sick of waiting for the ERP to meet their own needs.
  • The look on the face of a Gen Z worker who cannot fathom why the order entry app they’ve just sat down in front of is not 100% intuitive and needs in-depth training.

And I am hoping that if you are reading, you too are wanting to know about how you address this back-office challenge.

The Unchanging History of Business Apps

So, we probably all agree that until now when you think about transformative technologies, you could be forgiven for not thinking about business apps. But at the end of the day business applications, they are really the tip of the spear for digital transformation. That’s where the rubber meets the road—where your employees, your people, your customers, your products and services, as well as your stakeholders converge.

But if you look at business applications, they have not fundamentally changed. You can go back 50 years, look at business applications, and you are by-in-large looking at the same thing.

This is a picture of a TWA call center in 1971. If you were to go into that call center and look at its business applications, you would find employees using green screens. If you pick that call center agent up and move him to 1992 and then pick him up move him to 2015, you will see bigger differences in hairstyles and clothing than you will from the business applications. applications.

Sure in 1971 it’s a green, it’s monochrome in 1992, it’s a fat client with the server sitting on the back end, and it’s probably in a browser in 2015. However, they have a focus on forms over data, and they’re supporting highly reactive business processes.

Because business applications embody your business processes, if the applications haven’t fundamentally changed, your processes by and large haven’t fundamentally changed.

Think of this call center that we just talked about, and imagine you’re a manufacturer of a piece of large scale electronic capital equipment. You sell to a customer, and they use your piece of equipment to automate something in their production line. The thing fails. They pick up the phone they call a service center. Someone picks up a phone, and they open a business application. Now data starts getting created, because someone’s typing into a form. (Here’s the problem.) Then if you can’t diagnose and help with the repair process over the phone, someone gets sent out to go and fix the problem. This is entirely reactive.

But there’s really nothing else we could have done.

Business Applications Today

And finally there is a fundamental shift occurring, and that fundamental shift is that data is starting to come out of everything, and it’s coming first. This allows everyone across every industry to fundamentally re-imagine the interaction with customers, how you engage your customers, and how you operate. It allows you ultimately to take reactive processes and use this flood of data to turn them upside down in order to make them proactive.

So let’s go back to my example. You make a piece of capital equipment, you sell it to your customer, and they put it into in their production line in a factory. That piece of equipment today is inevitably sending a torrent of information into a data repository somewhere. It’s connected information about the health, the utilization of the product, and perhaps the state of consumables. That information now can arrive into a detection model in a cloud like Azure, where a problem can be predicted. Not that there is an actual failure, but that there is an impending failure. That can trigger a maintenance call or a proactive conversation with a customer before the machine ever goes down.

This is fundamental change requires a profoundly different class of business application.

And you know what, thank goodness. It is about time. A new way of addressing the needs of the business app user is probably the only way we can start to address the challenges we’ve had in the back office.

I’ve been working with ERP systems since my first job in the 1980s working for a construction company using a IBM34 running BPCS. I can absolutely testify to the stagnation in this industry. I started selling ERP systems in the mid-nineties, and what we sell and how we sell has changed really very little, to the extent that you wonder if all the really talented software people have run off to build cool stuff like rocket ships, uber apps, and applications for nano computers that are injected into people’s bloodstream to detect disease.

ERP projects have gained an unenviable reputation:

  • Overweight software applications that take years to implement and cost millions of dollars and require highly trained black box fiddlers to configure into operation;
  • Projects that can spin out of control and leave organizations in no better state than they have been previously; and
  • Software so highly customized that you are resolutely unable to upgrade it and ever take advantage of those years and years of maintenance fees you’ve paid.

And where are many high-tech organizations now? They’re encumbered with

  • Software that is likely years out of date; and more importantly,
  • Software that may well be holding you back or just as likely, an island of the 1950s in a sea of modern cloud apps.

So I say, hallelujah!  Show me what has triggered the move to take ERP systems and drag them out of their 50-year long stagnation.

This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

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