The decision to upgrade or replace enterprise resource planning software is never an easy one. With so many different features, a lengthy implementation process, and a hefty price tag, you can’t afford to make a decision without all the facts available. At MIBAR, we understand this as well as anyone, and have spent nearly three decades in this business providing our clients the honesty they deserve alongside the top-notch service they expect. Today, we would like to discuss the concept of Shadow (or rogue) IT, and how the right ERP can help mitigate this potential problem.
Background: Shadow IT
Shadow IT. Naturally, it sounds intimidating, because it is intimidating. Simply put, the idea of your application stack including unauthorized and unvetted software is a scary thought, and most IT people have horror stories about ‘that one employee’ who decided that his or her convenience was more important than the entire company’s security:
- The federal government employees who thought it was a good idea to bring a Wi-Fi access point into the office (but didn’t change the password from Tsunami)
- The employee who downloaded a document to his mobile device from SharePoint (without realizing that he had automatic upload to Dropbox on his phone)
- The employee who edited the firewall and DNS for better performance (accidentally giving the entire network Public IP Addresses)
There are stories like this in every industry as employees try to work around every perceived “inconvenience” that IT lays on them. However, one myth that won’t go away is built around financial software.
How Bad Habits Start
If you’re looking at new ERP software, there’s likely a reason, and the reason is that it can no longer handle your business needs. However, if this is the case, it usually means that employees have started to develop workarounds to supplant these shortcomings. These workarounds become a part of their everyday life and by the time you actually realize that your company needs to make an ERP upgrade, the old processes are so deeply embedded that you will need to make a cultural change on top of a technological one.
Why Shadow IT is Common in ERP
There are many reasons that shadow IT happens in general, but when looking at ERP, the trend is pronounced. A 2013 Gartner Report, ‘The Rise of the Postmodern ERP and Enterprise Applications World’, discussed the reasons shadow IT happens in ERP applications, noting that due to the complexity, robustness, and customization that goes into ERP, the applications become “extremely ‘arthritic,’ incredibly slow and expensive to change.” Combine this with the fact that ERP upgrades or changes are infrequent—generally occurring once every decade or so—and by the end of its life you have a diverse yet disconnected stack of applications both authorized and unauthorized.
How Shadow IT can Help You Understand What You Need in a New Solution
This may be an odd question to ask, because the answer is somewhat layered. There’s no question that allowing any unvetted application into your business is a bad idea and the increased risk and fragility that comes with shadow IT often outweighs the benefits. Knowing this, there is one key benefit: These applications do highlight some of your current system’s flaws and paint a picture of what you might need out of a new system. “Nobody works around an established process or team if that process or team serves their needs,” said Leon Adato in a recent CIO magazine article, adding that “[if a system doesn’t work], that’s when teams and even individuals start looking for other ways to succeed.”
Addressing Shadow IT When You Chart Your Course to New ERP
From questionable Excel Macros to undocumented software to use of consumer file storage, the more heavily that your employees embrace shadow applications, the more likely it is that your system is failing your needs. While anything that poses a threat to security, compliance, or data needs to be detected and quashed immediately, it pays to ask why employees are using it in the first place.
If you can understand the ‘why’ behind your employees’ usage of an unvetted workaround, you can leverage these insights to find a solution that works for both your team and your IT department.
Making a Decision on User Experience
As we discussed above and in recent blogs, a new ERP project needs to benefit the company and the users. Not only does an upgrade need to make day-to-day and month-to-month processes easier, it needs to help users do their job more effectively. Shelfware, a term used to describe software purchases that go unused (i.e. shelved), is often the result of a bad user experience.
As you seek out new ERP software, you need to proactively take steps to prevent your investment from becoming shelfware. This starts with open and honest communication between the ERP decision team and users about the features that users expect from an ERP upgrade. This communication will help you to narrow down your list of vendors and find a software that gives users what they want, reducing the risk of a product getting shelved.
Changing the Culture
Implementations are hard because you are not only making a massive change in technology, but because the people need to adapt alongside it. Throughout the decision, implementation, and training process, communication is imperative. You need to understand what users want, what they need, and what they are going through so that you can provide software that makes their job easier, keep morale high, and ultimately keep everyone on the same page.
Knowing this, you may still have detractors and holdouts. Change is often a frightening experience, and an ERP upgrade presents one of the biggest changes your finance department will experience—both in operations and in corporate culture. While communication is one strategy to tackle this, the overall success of the communication depends on a strong project vision. Learn more about promoting this vision throughout the process in our blog, Five Tips for a First-Time ERP Implementation.
The Right Training
While ERP was once considered inflexible, monolithic, and slow-to-change, today’s ERP platforms are more responsive than ever. No longer do systems rely on massive cumulative updates once every year or two, today’s software receives updates semi-annually, quarterly, or even monthly.
As this is the case, users need the right training at the right time. From the in-depth initial training to ongoing learning initiatives, users need to be continually reminded that the software is going to make their lives easier.
Training needs to be budgeted, planned and completed with the user in mind to reinforce the value of the project in even your most reluctant employees:
- Budgeting: According to Gartner, organizations that spent less than 13% of their total ERP cost on training were three times more likely to run into hurdles such as exceeded deadlines and exceeded training budgets, than those organizations that spent 17% or more of their total ERP cost on training.
- Planning: An ERP project takes months or even years to complete, providing you ample time to help users understand why this change is happening and how to hit the ground running on the go-live day. Every person learns differently, and you need to work with your ERP implementation partner to develop a learning plan that satisfies each learning objective.
Starting Fresh and Keeping It That Way
An ERP implementation represents an important inflection point at most organizations. Not only are you changing your software, you are changing the processes and culture at your company. While this project may represent a fresh start and an opportunity to rid your organization of rogue applications, it’s important to remain vigilant if you hope to prevent any backsliding.
Continued education and communication are part of the solution to prevent users from reverting to their old ways. The right technology is another. At MIBAR, we have worked with organizations like yours to implement and operate the right ERP solutions for their business, providing the training and support needed to satisfy users.