ERP Digitisation, ERP Implementation, ERP Sales, ERP Selection, ERP Technology

Evaluating the landscape of company-wide application systems

April 05, 2021 by Norbert Gronau

Evaluating the landscape of company-wide application systems

When a company undergoes a period of rapid growth or an M&A process, there is often an “accumulation” of application systems, whereby some of these “legacy” systems are able to handle new business processes better than others. This is especially prevalent in small and mid-sized companies. As a Trusted Advisor, I have to assess this landscape. Then, I have to identify and advocate for the necessary sequence of investments into new application systems.

An optimal approach to this task is to carry out an “adaptability analysis”. This method was developed approximately 15 years ago at the Universities of Munich and Potsdam and it provides an evaluation of the need for action, based upon various criteria. Initially, the analysis takes two criteria into account: Criterion one is the IT stack being used by the information system. Criterion two is the company’s ability to adapt this system to altered business scenarios.  

For the first criterion (“technical adaptability”), there is an evaluation catalogue which consists of about 70 questions. In essence, when all of these questions have been answered it should be possible for a software’s technical sustainability to be evaluated at all levels. 

To evaluate the second criterion, four key scenarios are defined in consultation with the system’s process owners. Importantly, these four key scenarios must lie outside of the business’ present scope of operations. Afterwards, a joint evaluation is carried out to ascertain which steps must be taken to achieve each key scenario in-house.

Once carried out, this adaptability analysis provides two key insights. Firstly, insight into the extent to which the company’s technology is outdated, and secondly, insight into the extent to which the company is capable of adapting its systems. Subsequently, a portfolio can be presented that shows, which systems need replacing first, which are outdated, and which cannot be easily adapted. Afterwards, individual decisions must then be made to determine the second wave systems.

This method ensures that an investment program for digital transformation always provides the company with a viable plan of action that can be achieved with a comparatively small investment volume. Another advantage of this method is that the results described here can be developed relatively quickly. This is especially relevant to small and medium-sized companies where proper systems documentation or even operational architecture management are often seriously underdeveloped.

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