Courting continuous improvement - Industry Trend or Event - Editorial

In a world where organizations are struggling to become more customer-oriented, more responsive, less hierarchical and more focused on their core competencies, flexible systems can be the key to business success. In making better information available throughout the enterprise, an organization allows its users to make informed decisions more quickly. Most importantly, a company with liberated data is able to respond efficiently to specific needs and trends.

As companies look for ways to minimize the pain of reengineering, "continuous improvement" is emerging as a preferred strategy. This lets companies phase-in new software applications, allowing IS time to measure and fine-tune each application as it is implemented. In this way, organizations can implement the most effective software strategies by constantly evaluating their requirements.

One software strategy that can be pivotal in achieving these goals is to adopt "best-of-class" applications. This approach allows a company to choose the best individual software packages for its human resources, financial, manufacturing, inventory and purchasing needs.

Conversely, a company may decide to go with a single software vendor's blanket package. Although product suites often go hand in hand with wholesale reengineering and may lengthen the implementation process, they can be especially attractive to IT departments concerned about the interoperability of software packages from different vendors.

However, even enterprise applications vendors are beginning to recognize the appeal of best-of-class solutions. In today's business environment, in which organizations implement applications from a variety of sources to produce a system that suits their particular needs, vendors must work together. One emerging industry standards organization, The Open Applications Group (OAG), has been established specifically to develop criteria for firms that choose the best-of-class route.

Whether an organization decides to adopt a best-of-class or single-vendor software solution, it should assess how well each solution will measure up to the following criteria:

Return on investment maturity: Will the ROI be a five- to seven-year turnaround that can be rationalized into the planned obsolescence of the product? Or is it a 10-year time frame that does not permit an organization to recoup its costs?

Continuous improvement: How will the implementation process affect operations? How soon will the technology upgrade start to deliver benefits?

When a company is able to phase-in a new software application, it can measure and assess the effect of changes before progressing. This continuous improvement, as opposed to a single massive upheaval, allows firms to remain responsive and avoid unnecessary reengineering.

Cost of ownership: What is the aggregate cost of the software, implementation and training? Does the software require proprietary building tools and high-priced programmers or can it be assembled with off-the-shelf programs?

Time-to-market: How long will it take to implement the software? Will it be several years before users are able to fully exploit the power of a three-tier environment?

A strong, best-of-class solution provides organizations with software that offers powerful functionality, is easy to implement, and coexists comfortably with other technologies and business applications.

It also gives business managers the flexibility to determine the direction and pace of change in their organizations.

Within the software industry, OAG members and other independent software developers believe the best-of-class solution is the logical extension to open systems. Just as closed hardware systems have been eclipsed by open, client/server environments, software will be dominated by applications that are able to work in non-proprietary environments.

A strong parallel to what is happening in the software industry is the evolution of the automotive industry. Over the past decade, car manufacturers have ceased trying to produce all of the individual pieces that go into a finished car. Instead, more components are outsourced to parts manufacturers, who are able to guarantee high quality and timely delivery.

Competitive markets and rapid change in the software industry drive good companies to adopt continuous improvement practices. In turn, this demand for rapid implementation and decision-making autonomy has moved companies toward best-of-class thinking. Software vendors must therefore continue working together to provide organizations with the tools to integrate and exploit the power of various applications.

Stephen Wright is president of Coda Inc., Manchester, N.H., a supplier of accounting software.

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