Building a Digital Company: when IT is too late

Building a company is fun.  I still remember sitting at my kitchen table with some friends and kicking around ideas on how to change the world by putting CRM on the desktop of everybody who ever works with a customer.  Then we took the plunge, quit our day jobs and focused every ounce of energy on starting a new kind of software company with nothing but a few laptops and the conviction that we could do it.  Exciting times.  Fast forward nine years and now SugarCRM is a global company with over 400 employees and hundreds of business partners helping our customers build better relationships with their customers.  Even more exciting times.

But translating a vision into a real business comes with its own challenges. It’s 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.

Getting that perfect mix of operational execution is the challenge that all first time entrepreneurs as well as seasoned executives are faced with every day.  Am I building something people want to buy? How do I find great people?  How much process is too much process?  What do I automate first?

Here is what I see as the fatal flaw in that recipe I just outlined. 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.  Little did I know that SugarCRM has been part of the “digitrati” from the beginning.

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.  Even worse, 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 rather 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 together 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.