• Don’t forget your Silos

  • Departments frequently seem to operate within their own silos, and this can limit the sharing of information. The implementation of an integrated IT system is often seen as the way to advance the organisation. Unfortunately during the implementation process of such systems, the extent to which the departments are internally focussed is still often underestimated. Ambition turns into overconfidence, which I believe is one of the factors that lead to the dramatically low success rate of large IT projects. So, when I recently learned about a successful implementation, I wanted to know more about its background.

    Incremental functionality strategy

    While attending an event in September I ran into a former classmate from Nyenrode Business University, Eduard de Vries. Eduard is Senior IT Manager for IDEXX, market leader in diagnostics and IT solutions for animal health and water and milk quality. IDEXX operates its reference laboratories division from about sixty locations worldwide and discovered that the IT environment was inefficient. A series of takeovers had resulted in a patchwork of organisations and systems, and the company decided to start an ambitious project to implement a new integrated global system.

    Based in Boston on of Eduard’s responsibilities is to lead this project. The implementation is successful; the global rollout is progressing from country to country. This project is not only considered a significant catalyst creating improved productivity, but a greater amount of information available as a result means that IDEXX can offer its clients much better service. Remarkably, the rollout of this project is even on the agendas of analysts who follow the company. It is often discussed during analysts’ meetings, with positive reference made to it. According to Eduard, part of its success is not so much the complete elimination of the differences between the departments involved, but more a simple acknowledgement of these differences. Success can only be achieved if all the system’s users accept and embrace changes.

    Eduard and his team have applied an incremental functionality strategy. The aim here is not to identify and describe all the possible functionalities beforehand. The team focuses on the needs of the country in which implementation is taking place by applying an incremental functionality strategy. In this way, the existing organisation and processes are encompassed by the team, ensuring that original functionality is retained. Then, the team sets itself a target of two or three major wins. If one of more of these wins is new to the project, it is immediately implemented in the countries where the application is already running. Thus, as the system expands, standardization takes place naturally. This process also forms an excellent basis by which to constantly improve and update the strategy.

    IDEXX’s operations are changing so quickly that long-term implementation plans can sometimes no longer be relevant. The chosen approach forms the basis for acceptance amongst shareholders, management and users while, at the same time, acting as a stepping-stone towards future integration and improvement. This is how Eduard keeps everyone on board during the course of this long-term project, while achieving repeated success.

    Don’t forget your silos

    Does using an incremental approach imply that Eduard has set a low ambition level? On the contrary! But he is determined to set realistic goals. In large and complex organisations, it is an enormous challenge to make a global project a success. Calls for ‘disruptive’ changes often result in unrealistically high expectations that a company simply cannot stay abreast of.

    Greg Smith, Transportation and Logistics Industry Director at Oracle, has his own take on this matter: ‘Silos aren’t that bad, they’ve brought us to where we are now.’ In other words, remember how a company got to where it is today. It got there with the help of its silos, IT systems and employees. If you don’t acknowledge this then you actually disregard the present-day organisation. This is the wrong way by which to gain acceptance and will be fatal to ambitious plans as well as damaging to an organisation.

    Eduard has recognised this fact and applies this knowledge without being less ambitious. If silos are completely demolished during the course of a project, an organisation might collapse. Start by installing some windows and doors and people might find their own way out.

    Author Jeroen Bolt. This blog has been published on Supply Chain Movement