Modern businesses rely heavily on their essential IT systems and therefore, the idea of replacing such IT fills many entrepreneurs with dread. It doesn’t have to be that way. In two articles, Utilus provides 11 guidelines for keeping your essential IT systems up-to-date in a worry-free manner.
In this article, tips 6 through 11: what are tactics you can apply to the actual replacement process?
6.Think twice before building custom software
Over the past two decades, the number of software solutions for critical business processes has dramatically increased. For the majority of business processes, IT solutions already exist. Utilus often advises: settle for the systems that are available, even if they aren’t perfect. Creating your own invoicing system is not going to give you a competitive edge.
So when should you opt for a custom-built solution? Consider developing your own IT systems when it’s of strategic importance to your business, and no existing solutions meet your specific needs. In other words, build custom IT to amplify your unique value proposition!
For instance, if you’re in the energy sector, you might have initially had an IT system connected to a few gas and coal plants along with numerous end customers. But as the industry evolves, you may need to integrate solar panels, wind turbines, and electric vehicle charging stations nationwide. Such challenges are worthy of custom IT development.
7.Build in Phases
Be realistic. A lot can go wrong in the creation of essential IT systems. This is certainly true for IT public organizations, as can be read in the newspapers. But make no mistake, we also often see IT go very wrong at companies, even if those cases rarely make the news.
There’s a straightforward way to mitigate risks: employ a phased approach. Most essential IT systems can be constructed so you start with one component and add more elements over time. This way, you’re not risking, say, ten million euros on the entire project, but perhaps just one million. Get that initial component up and running first, and then continue to build upon it.
Next, it’s crucial to have a comprehensive plan for what you aim to build and to benchmark costs in advance. This can be done in several ways, but it all boils down to this: just as you have a rough idea of the costs when you’re building a kitchen—from cheap to expensive flooring, appliances, and cabinets — you can do pretty much the same for IT.
Also, have a plan for each phase of the plan and regularly monitor progress. The entrepreneur and the IT company should collaborate to create the plan itself. However, and this is often forgotten, in the end it is up to the entrepreneur to be vigilant about it. Utilus strives at being transparent, which among other things means that we warn our clients of decisions that might affect the cost of the IT system. Not all IT companies operate in this manner.
What can go wrong? A lot of the time, problems arise when new specifications are added during the development process that weren’t originally in the plan. While it’s possible for new functionalities to emerge that need to be included, frequently adding these functionalities increases complexity and cost without contributing to the originally set goals for the IT system.
Building on point 7, instead of constructing a single centralized IT system, opt for a system composed of various modules. Eventually, every system will need to be replaced, but a modular system tends to have a longer lifespan. As your business evolves, you can easily add or replace modules. Utilus advises taking a modular approach! This strategy also applies to buildings—you can renovate one room at a time or even an entire floor.
Additionally, there’s a psychological advantage to building modularly. Let’s say your end goal is a system that costs 20 million euros. By building modularly, the first phase — which would still result in a productive IT system — might only cost 2 million euros. Which approach would you prefer?
9.Don’t count your chickens before they hatch
I’ve said it before, but it bears repeating: things can go wrong in IT. This is a risk that you must fully understand and consider before undertaking any IT project. When do issues typically arise? We’ve already covered the dangers of deviating from the original plan during construction.
However, another critical phase lies ahead. If you have a team of talented, engaged, and experienced professionals, the actual building of IT systems can be relatively smooth—at least, that’s our experience. The real test often comes after the construction phase, during the transition from the old system to the new one. As the saying goes, the proof of the pudding is in the eating. It’s crucial to approach this transition with great care, ideally in a phased manner, to minimize risks.
10.Hey, director, don’t be boring
One thing that invariably goes wrong—yes, invariably—is the technical replacement of an IT system. There may be instances where it seems reasonable to think, ‘Okay, our IT system has served us well, but the software is now outdated and has been modified excessively. Why not just rebuild it using modern technology?’ As tempting as this might sound, resist the urge.
Firstly, it’s clear that replacing an IT system is a complex undertaking. To pull it off successfully, you’ll need the buy-in of both board members and employees. You must offer something appealing to all stakeholders. Consider adding new functionalities that will simplify your employees’ tasks or something exceptionally innovative for the CEO.
Secondly—and while this may sound lofty, it is a fact — IT is a form of executable knowledge. It emerges from collective insights within your organization. You want to capitalize on these insights to add value to your business, and that’s why you build IT systems. Rebuilding the same IT system that you had seven years ago essentially implies that your organization has not learned or evolved during that time. This makes no sense.
Lastly, a critical responsibility falls on the entrepreneur or executive making the final decisions. When the discussion veers into technical territory, be vigilant. You’re accountable for the project’s blueprint and, ultimately, its successful implementation.
To be fair, most IT systems are replaced due to negative thoughts. The fear that the system will break down or that you’ll be stuck in an outdated system often serves as the main drivers for upgrading essential IT infrastructure. These are, as I’ve mentioned before, valid reasons.
However, to end on a positive note, there’s an entirely different perspective to consider. If you’re leading a thriving business, you’re in the process of discovering new products, services, and markets. Your employees are uniquely equipped to address customer challenges. In this context, upgrading your IT systems is not merely a necessity — it is an act of entrepreneurship. With the right IT solutions, you can explore new horizons and expand the scope of your business.