By Abhijit Verekar and Ross DeFalle

With numerous functional areas, systems, and processes to account for, it can be overwhelming to prioritize where to start when it comes to IT Modernization. Our clients often start the conversation of modernization with “Where do we start?” Our executive team discusses the IT Modernization life cycle and how to start the process in this article.

1. Identify Business Needs and Requirements

Start with a plan. Organizations need to identify their business needs to develop a strategic plan to move the organization forward to modernization. The strategic plan includes developing detailed business process maps or a high-level narrative of the current state broken down by department. Findings will often come in the form of a process maturity index or SWOT analysis and are left up to the client to decide the deliverable format that will best suit their end goal. After reviewing and approving the deliverable, further review sessions with internal staff are held to determine how they envision future-state business being conducted. At this point, future-state business process maps could be developed to reengineer processes and introduce streamlined, electronic workflows within the organization. All data gathered during the strategic planning initiative is reviewed to develop recommendations to modernize the organization. These recommendations are prioritized with the organization’s leadership and further divided by implementation time.

This is an essential step in the modernization process, as it allows executive-level leadership to visualize the timeframes and tasks necessary to operate like a well-oiled machine. This methodology clearly articulates the organization’s business needs and greatly enhances its ability to choose the right piece of software, hardware, or solution.

2. Develop Bid and Evaluate

Request for Proposals (RFP) development can be a nightmare. There are numerous voices to be heard when developing an RFP, ranging from Executive Leadership, Department Managers, Procurement, and key end-users. We understand this and that it can be overwhelming, but when developing your bid document -- clearly state your organization’s business need(s), current-state processes and operations, and the organization’s future-state vision to alleviate that current business problem. This is why planning is so critical to the process. Each modernization step builds upon the last, and there are no shortcuts.

As our President and CEO, Abhijit Verekar likes to say, “You have to eat your vegetables.” At Avèro, we like to add future-state (reengineered) business process maps to the RFPs we develop. We understand that the maps may need to be adjusted after vendor selection. Still, they are an essential addition to the bid document that enables vendors to grasp how they want to evolve and optimize their business processes. The organization needs to develop an exhaustive set of requirements the solution must meet. This further emphasizes the organization’s business needs to the vendor, allowing the organization to evaluate what the vendor can and cannot provide. After the bids have been reviewed and the requirements have been scored, the organization should schedule demonstrations with the shortlisted vendors. Vendor demonstrations are crucial as they allow the organization’s key users to look at the solution and understand how it works. It is nearly impossible in today’s world to get objective information on a solution. Please rest assured that a magic quadrant or trade magazines will not provide your organization with 100% completely objective information. The only way your organization can receive quality objective information is to develop demonstration scripts and have the vendor demonstrate the processes contained within them.

3. Always Negotiate the Cost Proposal

The first draft of the cost proposal is NEVER the final draft. There are always additional savings that an organization can seek out before finalizing a contract with a vendor. During the contracting phase, vendors will attempt to introduce certain add-ins that aren’t relevant to solving the organization’s current business problem. During contracting, the organization needs to remember the core business problem they are trying to solve and delineate between the mandatory offering needed to solve the problem and what the vendor is trying to upsell. Doing so will ensure the organization gets the solution they need within acceptable budget parameters.

Organizations need to understand that vendors already have the necessary infrastructure in place. For example, a vendor’s cost to add a client to a large SaaS ERP solution is relatively small because the servers have been purchased, the hardware is already configured, and the security protocols have already been defined and implemented. An organization that understands this can use this information as leverage to secure favorable terms when finalizing the contract. This is also paramount when organizations decide whether to host the solution or sign up for the vendor’s SaaS model. Organizations need to factor this spend (infrastructure, servers, security protocols, maintenance costs, etc.) into their decision before deciding which option is most fiscally prudent moving forward.

4. Hold Vendors Accountable

Organizations should not need to go through the modernization process alone. Yes, your organization needs to spearhead the initiative, but you should also be relying on your vendors to assist with this initiative. Vendor assistance, in many cases, is simply honoring their maintenance contracts and service level agreements. Your organization should be paying for some time of support from a vendor. This is meant to ease the burden from your technology staff and allow them to assist with overall technology operations, or in this modernization case, moving the organization forward by introducing new technologies to fix current business problems.

We have identified six (6) essential items to look for if you suspect your vendors are not holding up to their committed level of support:

The vendor isn’t a strategic partner, only an up seller
The vendor lacks commitment to the organization
The vendor stops voluntarily sharing information
The vendor doesn’t seek to understand your organization’s current operations
The vendor is nonresponsive to ongoing issues
Constant account manager turnover

These highlighted traits need to be addressed as soon as they arise. This can stunt the modernization effort and lead to excess spending to accomplish lofty goals organizations undertake.

Why follow these steps?

Why are all of these steps necessary? You might ask. Quite simply, it mitigates the chances for an organization to fall into costly spend-traps and increases efficiency throughout that organization. An audit or assessment of the current-state to define business problems can narrow the scope and ensure the organization isn’t overspending on solutions that aren’t necessary. An audit of current solutions will ensure that duplicate solutions aren’t being used to achieve the same result. Not only is this another example of a spend-trap, but this is also an efficiency trap, as technology staff needs to have the skills to support both solutions. IT Modernization doesn’t have to be hard. By partnering with a firm like Avèro, you can define a strategic roadmap to pave the way for your organization’s IT initiatives.