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SOFTWARE AIDE - The 5 Worst Mistakes

1. Mistake 1.

Underestimating the need to make ongoing modifications to the system; and if those modifications are difficult to make, how it can lead to ultimate failure.

When was the last time your company reorganized, or made changes to its management reports, or modified performance measures, or updated its incentive programs? Probably not that long ago. That just underscores the point that the only constant is change. We live in a business world where the pace of change is accelerating every year. While we all know that, we don't always fully account for it.

That can be a critical mistake in selecting a planning solution. Here's why.

If making modifications in the planning system takes a long time or is otherwise difficult or onerous, you'll look for shortcuts, or simply won't do them. While no single work around (or delinquency) will matter that much, over time they add up to a system that produces a P&L that doesn't really reflect the business... and everyone knows it.

Once confidence in the system begins to ebb, the usage and value of the system diminishes.
As the software falls into disuse, spreadsheets rematerialize to "get at the real numbers."
The spiral of disuse, spreadsheet substitution, and eroding confidence continues until the system is used by only a fraction of the users, and is relegated to consolidating data.
The end result is a perceived failure of the system.


What's an example of this? Say that everyone in your company gets a bonus based on Revenue, and the system is originally configured to report Revenue by Product Line. The next year there's a change, and the company focuses on profit, which becomes the basis for bonuses. Now the system has to be reconfigured to report Profit by Product Line. Management wants this done right away, without delay. Unfortunately this proves to be difficult in the new system (which is cumbersome when it comes to allocations). So the finance group comes up with a quick and (supposedly) temporary solution: Use a pro forma template to back into Profit by Product Line.

While this one change presents only an incremental shortcoming to the system, over time other such work arounds combine to undermine the effectiveness of the system, and the confidence that users have in it.

What can be done?

You need to understand the types of changes your company has made in the past, and is likely to make in the future. Here are a couple of examples. Has your company reorganized departments every year? If so you want a product that can handle reorganizations just by clicking and moving graphics (at least one well known product has this feature). Does your company struggle with allocations, devising new methods every year? If so, you want a product with robust allocation features.

The point is you need to know the types of changes your company is likely to make, and go with a system that has designed in features to accommodate those needs. While most of the major vendors can handle just about any change imaginable, some require customized configuration or programming to handle the change, while others are have the feature embedded.

How will you really know if the feature you're looking for is hard wired into the software, or requires customization? You'll pay for any customization that's required, so it will appear in the estimate for implementation costs.

So know what changes are likely, and everything else being equal, go with the provider that addresses that need within their basic product.

 
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  POP QUIZ
  SOFTWARE VENDORS
  THE 5 WORST MISTAKES
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Mistake 5 >
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