Building a Digital Company: When IT Is Too Late

Clint Oram, CTO & Co-Founder, SugarCRM | 2/20/2013 | 13 comments

Clint Oram
Most companies think of bringing in technology at exactly the wrong time. Whether you are starting a company from scratch, adding a product or offering to your business, or just automating an existing business process, at some point or another, technology will come into play.

You'll look to add capabilities to make it easier or faster or cheaper. Chances are you've got the vision, and all you need to do is execute it with the right people and solutions, right?

The problem is that translating a vision into a real business comes with its own challenges. It sounds like a simple recipe at a high level. Step 1: Define your goals and objectives. Step 2: Hire the right people to make it all happen. Step 3: Align those people around simple, yet effective processes to get the job done. Now for the secret sauce: Add in a dash of the right technology at the right point to accelerate the pace.

Voila! Instant success! Yeah, right.

Here is the fatal flaw. I talked about adding in technology last -- after you have built your strategy, teams, and processes. That’s what most companies do today. They graft on technology to manual processes in the hope that technology will help them accelerate a specific process, like distributing leads from marketing to salespeople or sending out invoices to customers. But putting roller skates on your dog in order to speed up the nightly walks won’t necessarily work out the way you might have hoped.

A few months back, Capgemini and MIT released a report called "The Digital Advantage: How digital leaders outperform their peers in every industry" that describes how successful companies today are putting digital technology, from software to smartphones, at the beginning of their business planning, rather than at the end. These companies recognize the power of digital technology in solving old, complex problems in new, simple ways.

By building strategies and processes from the ground up around digital technology, companies will outperform those that don’t.

This is where IT typically fails for a company. What happens too often is that a company that wasn’t built around a digital mindset gets stuck on the change management problem. People are creatures of habit. They are adverse to change. How often have you heard, “But that’s not the way we’ve done it before!”?

Deploying technology to accelerate a process not designed for today’s modern, digital business is not necessarily the right idea. Designing a process that simplifies your employees’ lives and ignores today’s modern, digital customer is even worse.

For instance, should you deploy an invoicing solution that automatically puts invoices in the post? After all, stuffing envelopes is a pain for your finance department. Or should you instead set up a billing solution that allows your customers to set up automatic payment by credit card. Which is better?

Another example. Should you get your sales people to move their customer spreadsheets out of MS Excel up to Google Drive for easier sharing? Or should you deploy a CRM solution that allows your sales department, service department, and customers to collaborate on answering the customer’s questions together?

And this is when the IT department becomes so often the enemy in the business instead of the strategic accelerator that the CEO envisioned. Putting lipstick on a pig and automating old processes one step at a time can easily frustrate everybody, from your employees to your customers.

It’s time to rethink how you approach technology in your business. Your employees want it, your customers are demanding it.

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batye   Building a Digital Company: When IT Is Too Late   3/3/2013 9:25:23 PM
Re: building a digital company the right way
could not agree more... sometimes start-up's born and die almost on the same day... some Co. born by chance... most stable Co. get born out of the hobby as owners do what they love ... and it catch up...
Zaius   Building a Digital Company: When IT Is Too Late   2/22/2013 5:21:52 PM
Re: building a digital company the right way
There are tons of different ways a company can born. Some born after careful consdierations and deliberttions, and some are just born in a month. This way the preparation varies. And, the initial stages suffers from tight budget, so they tend to cut on manpower and infrastructure. IT is the one which gets neglected more often.
singlemud   Building a Digital Company: When IT Is Too Late   2/21/2013 10:19:41 PM
Re: Transitioning
Agree, people do not want to change once they are accustomed to one system, so the IT system should be there in the first place
kstaron   Building a Digital Company: When IT Is Too Late   2/21/2013 11:24:50 AM
IT managers have a lot to overcome in getting people ready for "new" technology. Especially when no one planned on it to begin with. If they can answer how does this help the company, the employees, and the customers, though, they they have always done it, will eventually become they way they used to do it.
SaneIT   Building a Digital Company: When IT Is Too Late   2/21/2013 8:50:11 AM
Re: building a digital company the right way
I also think that as technology becomes available you can start to reshape those processes as well.  Companies that won't budge on processes when the budget is freed up for the tech side are foolish to say the least.
Pubudu   Building a Digital Company: When IT Is Too Late   2/21/2013 1:19:41 AM
Re: building a digital company the right way
Yes Pedro.

We can use the technology to enhance the effectivity and efficiency of the predefine system by the human brain.
Pedro Gonzales   Building a Digital Company: When IT Is Too Late   2/21/2013 12:15:41 AM
building a digital company the right way
I agree that once you determine and establish clear process, the next step will be on how to use technology to either improve or enhance that process.   A digital company should use technology to work more efficiently with customers, whatever the end goal, there is probably a technology solution available
LuFu   Building a Digital Company: When IT Is Too Late   2/20/2013 5:27:04 PM
Re: a tricky mind meld
@Sara - I think it depends. Generally speaking, if the startup company is in tech, there's a good chance they are de facto digitally astute. In that case, hopefully they map out their business plan incorporating a technology backbone that allows them to expand and adapt as they grow.

Even so, thinking back to the halcyon days in the Internet explosion, many startups bought into Sun's tagline of "We put the dot in dot-com." and bought piles and piles of heavy duty servers to handle all the web traffic. Then the dot-com bubble burst and all of those servers that SUN leased or exchanged for futures to the dot-commers came back as an accounting nightmare. So, where is SUN today?
Sara Peters   Building a Digital Company: When IT Is Too Late   2/20/2013 5:19:12 PM
Re: fantastic imagery
@LuFu  Great point! Why didn't I think of that?! Have I learned nothing from Spuds McKenzie?!
LuFu   Building a Digital Company: When IT Is Too Late   2/20/2013 5:12:01 PM
Re: fantastic imagery
Sara - C'mon, everyone knows dogs are better at skateboarding.
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