Batteries Not Included
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- Created on 21 December 2014
- Written by Steve Burrows
By the time you read this Christmas 2015 will be over - presents unwrapped, turkey devoured, and the thoughts of many will be turning to saving money and losing weight. Older readers however will recognise the title of this article as another seasonal feature.
When I was young one of the traditional activities of Boxing Day was buying batteries. It was inevitable that at least one of the presents given by my Grandparents or a kindly Aunt would, when unwrapped, reveal the phrase “Batteries Not Included” in small print on the side of the box. The electronic or electromechanical delights of the new toy would have to lie dormant until Boxing Day when the local Newsagent’s shop re-opened. These days batteries cost less and last longer so most electronic goodies include batteries and are ready to go out of the box.
What does this have to do with IT? The analogy struck me recently when arranging the purchase of a new system for a corporate client - we spent the thick end of £100,000 for software that will do nothing useful out of the box. No, we’re not stupid, this is normal when buying complex enterprise software. Whether it is an Accounts, CRM, ERP or other “enterprise” system the probability is that buying the software is merely step one (and cheque number one) in the investment. Aside from hardware to run the new system on, it will need configuring to match the needs of the organisation.
Why? Why can’t expensive software work straight out of the box? Basically, however simple and straightforward our business, however much it is like another business down the road or in the next town, we all do things differently. We have different accounting policies, different stock management and control, different customer engagement and sales practices - and it shouldn’t be surprising because Differentiation is the most common generic business strategy (see Michael Porter’s Generic Business Strategy model). By definition if our offer to customers is to be differentiated then our business operations must somehow also be different. Complex software needs to be configured to accommodate our differentiation - otherwise all businesses operating using the same software would have remarkably similar operating models.
So you’ve bought your shiny new system, and it needs configuring. You can either do this in-house - if you have very expert IT people, or buy a configuration service from the vendor of the software. Almost all enterprise software deployments require the latter, and it is not cheap. I remember a while back spending a quarter of a million on a software package, and another quarter of a million to get it configured - I got a bargain, the system transformed our sales.
Typically the vendor’s consultancy services to configure the software will cost in the region of £800 - £1,200 per man day depending on the complexity and exclusivity of the software, and it is reasonable to expect to spend between 50 percent to 100 percent of the software price on configuration and training. In short when buying your new system you should realistically budget double the cost of the software as a rough guide to what it might really cost.
That of course is not the end of it. The vendor will not know your business, so in order to configure the software he will need lots of time from you - or at least from senior people in the business who understand how the business works. As a general rule of thumb you should budget one man day of your time for each man-day of the consultant’s time - he will be perpetually asking you questions about the business and asking you to make decisions. Whether the software eventually does what you want or not will usually be up to you - it will be you who has made the decisions about how it should work!
Nearly there. You have now paid for the software, the consultancy, and your own time when you could have been running the business - isn’t that enough? Not quite. Because the software has been configured its behaviour is not what it might have been “out of the box”, so it needs documenting and testing. You will need to produce some documentation explaining to your staff how to use the software as it has been configured - an in-house user / operating manual - and you will need your staff to thoroughly test that the software really does work as intended before going live. Both documentation and testing are labour intensive activities which you will have to find time for your staff to do.
The reality is that the majority of enterprise software acquisitions which fail do so due to lack of buyer commitment post-sale, and I have lost count of the number of clients who have hired me after years of frustration to fix their failed system because they couldn’t afford the post-sales implementation cost and effort at the time. Purchasing the software is not the end of the journey or the expense, it is the beginning; if you have not budgeted for paying nearly as much again on “Professional Services” and for the large in-house commitment required to deploy the new system successfully then your project will probably fail. Whilst the software will not say on the packaging, and the vendor probably won’t have made clear up-front, just how much effort you will have to put in to making your new “solution” work, the failure will probably be your fault. If you’re going to buy yourself a nice shiny new business system this year please remember to budget for the extras up front, otherwise you’ll be as frustrated as a little boy on Christmas day with new toys and no batteries.
