The cost of complexity is not only to the account of the consumer; producers and sellers suffer too.
If we look back fifty years and make a comparison to current times, our access to technology and knowledge is a hundred fold more, yet our lives have never been more complicated. In business, there are few parts where complexity exerts a more painful grip than in the IT arena. The more pervasive and fundamental the IT system, the higher the system complexity, and the more money required to feed the beast. One must ask why we have accepted this state of affairs? Why have we not rebelled? The most obvious answer is that we are overwhelmed by the complexity.
The situation is not hopeless it can undoubtedly be reversed. Today, success is on the side of the providers who can simplify. Simplification means making processes and products easier for people to use. This definition applies to your customers, to your partners, and to your staff.
Simplification involves removing unnecessary layers, distractions, and complications. It’s not a degeneration into the simplistic, nor is it an anaemic version of the complex. Rather it is a focus on the essence of what people want and need in a situation. It requires the ruthless elimination of what is not essential and meaningful.
‘Best practice’ in the ERP industry is a paradigm that should be challenged. You need to make sure whether it’s best practice for your specific business, and not just for the ERP vendor. Applying standard best practice to all customers is not just counterproductive, but can create a commonality across an industry, rendering this void as a competitive advantage. In his book, The Fifth Discipline, Peter Senge said best practice “can often do more harm than good, leading to piecemeal copying and playing catch-up.” To simplify, one needs to distil a product or service to its essentials, determining these in response to a specific customer’s needs. Best practice is only best if it is essential to the user’s requirements.
All too often best practice is ‘over-adequate’. To simplify one also needs to clarify, to make the product or service as clear as possible to the users. We do this at SYSPRO, by taking time to show our customers where SYSPRO can add value to their business. This builds trust which then forms the foundation for a symbiotic relationship. So how do we provide all our clients with the care, support and time they need? We do it through being dynamic and nimble. As a much smaller organisation than many of our competitors, we are able to expedite turn-around times and tap into the collective intelligence of the larger global SYSPRO ecosystem. Over time, we’ve created small groups – each focused on different expertise. This works well, because people don’t feel lost in the jungle of a huge corporation. This is an approach that’s been successfully adopted by behemoths such as Google, Twitter and Facebook. It’s also one which provides everyone with a say, regardless of designation. It resonates with our belief in the individual as well as the collective power of people.
Perhaps the most compelling reason for taking simplification extremely seriously was highlighted by Prof McGrath, of Columbia Business School. McGrath studied the 5,000 publicly traded US companies that had a market capitalization of over $1billion as of the end of 2009. Of these only ten managed to grow net income consistently by more than 5% over a ten-year period.
What these ten had in common was a new playbook for strategy based on new assumptions for competing. They were all designed for what McGrath calls “healthy disengagement,” that is, a design intended to end advantages formally and systematically at the first sign that the advantage is fading. These companies all have the ability to reconfigure the business continuously rather than vainly trying to defend last year’s competitive advantages.
A rigid IT infrastructure, like a rigid mind set, is an impediment. Simplification is foundational to success in our convoluted world. Complexity and rigidity are not merely problems, they are liabilities.
It’s time to simplify or die.