Kim Cole

Monday, 28 November 2005 11:25

Shopping around

Faced with a perplexing array of software, glossy sales materials and glib salespeople, it is easy for a harried business executive to simply choose the cheapest enterprise system or the one with the most bells and whistles. Worse, it is easy for that overwhelmed executive to decide to leave well enough alone, or add additional software programming enhancements that will keep an older system limping along for a few more years.

An alternative approach is a process that considers not only today’s requirements but also anticipates the needs of the future. It is not a quick fix — done right, the process should begin a year or more before desired deadlines. It is, however, the best way to ensure that the systems selected will accomplish their goals for a number of years.

Success in selecting a new enterprise system begins with constructing requirements and expectations. A management team should consider the company’s guiding strategies and evaluate its existing enterprise system for critical functions that must be retained, as well as gaps that do not support the future direction. The management team can then develop and prioritize specific criteria for a structured evaluation of potential systems.

Collaborate internally
One critical component in evaluating a future system is a discussion with the people who will use it. It is vital to know which functions they would like to see added and it is equally important to know which functions they do not want to lose. Not only does a collaborative effort help determine core strategic criteria, it also helps build consensus for — and acceptance of — the changes that will result with a new system.

In addition, having a carefully considered list of strategic criteria in hand will simplify dealings with vendors. Vendors are eager to demonstrate everything their systems can do, including functions that appear impressive during a presentation but are not critical requirements. With a plan in place, the business can invite the top vendor candidates to demonstrate how their systems will perform the functions that are important to that business.

To streamline the process, the management team should develop a script for vendors to use during the demonstrations. The script prevents vendors from attempting to wow the selection team with those impressive capabilities while avoiding the critical functions the systems cannot perform.

The management team should also develop a scorecard for its members to use during the demonstrations. The scoring template ensures that the team is comparing apples to apples, and can be weighted to emphasize the attributes and functions that are most important. Providing vendors with copies of the scorecards in advance will help them organize their demonstrations.

Study the possibilities
Before making the final decision, the management team should research the vendor company for a broader set of strategic, or investment criteria. These criteria may include areas such as total cost of ownership (TCO), vendor viability, technology architecture, industry fit, service and support, and ease of use.

In researching TCO, it is critical to understand the true cost of the system over time, which includes more than just first-year software and implementation services. Annual maintenance fees (software and support) need to be considered, as well as internal and external resource costs necessary to manage the planned and future environments.

Vendor viability is an important concern, given the levels of consolidation in the enterprise technology market today. Buyers should review the vendor’s financial information to assess such areas as growth, allocation of resources to research and development, and distribution of revenue between maintenance fees and new software licenses. They should also look at how the vendor’s current financial reports compare to those from previous years in terms of profitability and balance sheet strength.

Finally, the management team should research the service levels of the vendor organization to ascertain whether the support is centralized or distributed through an affiliate partner channel. It is important to know how many employees staff the vendor’s support lines, as well as their experience level.

Josh Cole is an executive with Crowe Chizek and Co. LLC, and can be reached at jcole@crowechizek.com or (616) 752-4274. Kim Eaton is an executive with Crowe Chizek and Co. LLC, and can be reached at keaton@crowechizek.com or (574) 389-2508.

Wednesday, 28 December 2005 05:10

Filling the leadership vacuum

As the baby boomers start approaching 60, a growing number of corporate-level executive leaders in virtually every sector of business and industry will soon reach retirement age. As they begin exiting the work force, they could create a leadership vacuum that will prove extremely difficult for companies to fill in a time frame that supports operational and strategic continuity.

Businesses may be confident they have strong management teams in place today, but will they be ready for the changing realities of tomorrow? An effective enterprise’s response to this question will reflect its core organizational priorities, its strategic perspective and its capacity for effective corporate governance.

A significant fraction of today’s crop of business leaders is drawn from the baby boomer generation, born between 1946 and 1964, and many will reach retirement age over the next three to seven years.

Companies that anticipate and address in advance the challenge this exodus presents will facilitate their new leaders’ ability to sustain organizational progress. In the process, they will achieve clear strategic advantages over their less far-sighted competitors.

Strategic disconnect
Many organizations that are vulnerable to the disruption inherent in corporate-level turnover have not implemented succession initiatives. More disturbing, they do not even have such critically important plans on their drawing boards.

In general, organizations are aware of the negative implications of baby boomers aging and the resulting executive turnover. But many are unwilling to commit corporate resources to resolving the issue.

Developing well-trained corporate leaders is a continuing challenge for every organization. It requires a best-practices approach that goes beyond one-dimensional replacement plans that simply exchange one executive for another in the shortest possible time.

Instead, organizations should design and implement systematic, long-range leadership-development solutions that:

  • Identify high-potential people

  • Diagnose developmental opportunities

  • Create individual development plans

  • Monitor individual progress toward the desired end result

In addition, organizations must look at themselves and how they can improve their approaches to leadership and succession. Three organizational characteristics are key to an effective leadership-development strategy.

  • Strategic alignment. The organization’s approach to leadership and succession must be consistent with its long-term business plan and aligned with its strategic objectives, mission and vision. The enterprise must make an ongoing, across-the-organization commitment to leadership development, and allocate the time, talent and dollars necessary to sustain it.

  • Executive ownership. Leadership development and succession management must be key priorities at the organization’s executive level. Present-generation leaders should be actively engaged in the company’s leadership initiative, providing effective mentoring, review and assignment management to high-potential individuals.

  • Cultural commitment. The organizational culture should promote continuous feedback, assessment, selection and development of high-potential candidates. People across the company should seek opportunities to promote and develop leadership at every level. As a function of its culture, the company must be committed to identifying and preparing next-generation leaders from within.

A best-practices approach to leadership development results in a process that promotes these organizational characteristics and integrates them into an organization’s development and succession process. The model above illustrates the sequence and flow of the process’s implementation.

Effective leadership development demands sustained effort and a continuing organizational commitment. The return on this investment is well worth the outlay, because organizations that proactively manage the development and succession of their leaders take effective control of their own futures. Conversely, companies that choose a hope-for-the-best approach run the risk of having their futures controlled for them.

Clearly then, the only real decision is the decision to act.

Patrick J. Cole, SPHR, can be reached at (616) 752.4248 or pcole@crowechizek.com.