The other day, I was asked by a prospective client to help them replace an individual IT system that would hopefully improve two functional areas within a greater business process.
They already had several systems supporting parts of this process, but none were integrated.
As an IT strategist, I wasn’t willing to search for a solution without first workshopping the entire end-to-end process to understand how these various systems would work together.
Otherwise, it would end up in a lot of manual processes between systems like they already had, I explained.
Furthermore, I wasn’t convinced there would be a single solution that could do both those functional areas well.
Their problem?
They already had budget approval to replace an individual IT system. And so, they didn’t really see the value of looking at the other systems within the process since it wasn’t a part of their approved business case.
It’s common for Not for Profits to replace an individual IT system without consideration to the full business process
This is such a common issue I see when Not for Profits make IT investments.
They choose solutions to buy, often after lots of thought by an individual department within the organisation. However, they have not considered how it will work within the lifecycle or workflow of the full business process(es) or how it may also impact other departments.
As such, they end up with more complexity and manual processes. And now, their staff also don’t know the process workarounds of the new system, creating a dip in productivity for everyone.
The risks of replacing an individual IT system in functional silos
The primary risks for making an individual IT investment in functional silos include:
- Increase in manual processes
- Lack of end-to-end reporting capabilities
- Issues with data integrity
- Privacy concerns when data is stored in random files and emails because there isn’t a single system storage location for the information
- Increased costs for staff and systems maintenance due to workarounds
- Potential service disruptions due to fragmented processes
Despite these high risks, they are seldom identified in the corresponding business cases for Board approval. How does this happen?
Because most IT vendors are not system integrators, they only provide pricing for their product. Integrations and cross-system workflows are the client’s responsibility in most cases.
Yet Not for Profits rarely consider integrations or cross-system workflows when they go to market. So, this additional cost and analysis is not included in the business cases they present to their Boards.
How can you avoid such risks?
When considering a new individual IT system or a system replacement, make sure you do the following:
- Develop an integrated IT strategy – IT systems are part of the greater enterprise architecture to support the organisation’s goals and mission. Their relationship with business processes, information, other applications, the underlying hardware and networks, and cybersecurity are all interlinked. Therefore, all decisions should be a part of the greater IT strategy.
- Conduct an end-to-end needs analysis – The system requirements should consider the full end-to-end business process. What are the pain points, functional gaps and current risks that need to be addressed with this IT investment?
- Engage with as many stakeholders as possible – Include as many stakeholders and departments as necessary to cover the full end-to-end business process when considering a new system. You’d be surprised the number of times that the Finance team is left off of Payroll and CRM vendor decisions, causing significant manual processes for them later.
- Invest in integration – Integration costs should always be considered as part of a new system budget. It’s a rare case today that an individual IT system can sit in functional silos without impacting others.
Final Thoughts
By considering the full scope of business processes and adopting a holistic approach to an individual IT system replacement, Not for Profits can avoid the risks of increased manual processes, data and reporting issues, increased costs, and service disruptions.
This strategic approach also ensures that a new individual IT system investment can meet the overall organisational’s needs, not just those within a functional silo.
I regularly help Not for Profits with individual IT system investment decisions. Let me know if you need some help.
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Tammy Ven Dange is a former charity CEO, Association President, Not for Profit Board Member and IT Executive. Today, she helps NFPs with strategic IT decisions, especially around investments.