There are four common scenarios that are likely to trigger a conversation about core platforms in most businesses. What should you do if your stakeholders are talking?
Core platform projects are large, complex and peppered with risk. Some organisations may wish to avoid them or kick the proverbial can down the road. Or if that’s not an option, we may be tempted to look for shortcuts. However, our warning is to do both these things at your own risk.
So what are some of the most common scenarios that might trigger an internal conversation about one of your core platforms or you’ve already started having those conversations?
Trigger 1: Core platform is out-of-date or support
This is probably the most likely trigger of a conversation about updating or replacing a core platform, particularly at the leadership level. After all, if it ain’t broke, don’t fix it and all that.
For the most part, it’s understandable and even forgivable that you would want to ‘sweat’ one of your core assets – particularly when you consider how big, complex and fraught with risk core platform replacement projects can be. However, we encourage you to be very thoughtful about how you approach the “sweating” process. There is always cost and risk attached even if it’s not immediately visible.
A great example of this: we were recently called in to help manage an ERP replacement project, where the company had declined at least five version upgrades of the system. As a result, they were using the same version of the system they had been using nearly a decade ago.
With the vendor no longer supporting this earlier version, it became imperative to complete an upgrade. The problem was that everything was so far behind, it wasn’t going to be a straightforward upgrade. The system had moved on so comprehensively that it required a complete rethink of the upgrade path as business processes would be so heavily impacted, not to mention some retraining of key personnel.
When a core platform has been sweated for so long, this is what’s commonly known as technical debt. Each ‘skipped’ version leaves a bigger bill for future leadership teams to resolve, as the debt always has to be paid in the end. The question now is, do I continue to invest in the current system (and swallow the pain of the multi-version upgrade), or am I better off moving to something else entirely?
Of course, when your core system is delivered ‘as a service’ (in the cloud) rather than installed on-premise in your own technology infrastructure, all concerns about upgrade pathways are pretty much eliminated. It’s also where things get more interesting because you can start to think about your core systems in a more strategic way.
Which brings us to our second trigger.
Trigger 2: Strategic advantage to moving to new core technology
There’s so much talk today about businesses needing to unlock agility and flexibility. While this means different things in different environments, one thing is for certain – the rise (and rise) of cloud-based / SaaS services in most aspects of our lives has allowed for much more of both those things (agility and flexibility).
Take the example we outlined above. When your system is installed on-premise, like it or not, you’re going to be stuck with it for a while. You can’t use it for a bit, decide it’s not suitable, uninstall it and install something else instead. Well, you can, but you’ll quickly develop a reputation for burning through time, resources and money.
By contrast, core systems that are delivered in the cloud make migrations to new platforms far easier. Of course, it’s still not a great idea to dart from platform to platform. Consider the confusion and inconvenience for your people as they relearn and embed new processes and the cost of moving all that data each time – but the overall message is that you can be far more flexible in moving to new platforms if and when you identify a strategic advantage in doing so.
We’d also add in here that the strategic advantage may not come in moving platforms. It could be the case that you’re already on the platform that best serves your strategic plan and ambitions. It may be that you just need some expert support in the form of an independent review to identify and unlock new value streams from your existing technology.
It’s a process that can make all the difference between success and failure, particularly when you’re operating in a competitive market where products have become commoditised.
Trigger 3: Cost pressure or optimisation opportunity
This one doesn’t need a lot of explanation, but operating in a cost constrained environment can be a trigger for discussions about one or more of your core platforms and whether they are delivering value and ROI. Can we get similar functionality and outcomes for less?
Again, you have options. The answer is not always going to be to move to a more cost-effective platform. It could be that the existing platform can be tweaked to consume resources more effectively, or perhaps the vendor will be open to a discussion around pricing. An independent assessment can help guide your thinking.
Platform consolidation may be an option worth considering. On the spectrum of ‘best in breed’ to ‘all in one’ IT strategy, this leans towards the ‘all in one’ end. An upgrade to a new core platform may bring with it a raft of application consolidation opportunities that can reduce the overall IT spend.
Trigger 4: Regulation and compliance
Finally, in some industry verticals you may find one of your core systems is no longer able to meet the regulatory requirements or compliance standards – and the vendor has no plans or ability to make this happen. In this case, a move to a new platform is the likely outcome.
What happens after the trigger has been pulled?
If you’ve started internal discussions about one or more core systems, usually following one of the trigger situations outlined above, that doesn’t necessarily mean it’s time to start writing business cases or RFPs. What it does mean is that it’s time to get some independent advice to guide the discussion.
An independent assessment will help inform your decisions by taking into consideration a number of critical factors including goals and objectives, your existing architecture, incumbent vendor proposals, and market threats and opportunities.
Following this process, the answer may be to invest in a new core platform, or it might be something simpler, such as an upgrade or expansion of your current system. The point is that without doing the foundational work, you don’t know what you don’t know – and you’ll be making important strategic decisions in the dark.
Quay Consulting is a professional services business specialising in the project landscape, transforming strategy into fit-for-purpose delivery. Meet our team or reach out to have a discussion today.