Business often spend millions of dollars managing and perfecting their IT infrastructure, focusing on both hardware and software. However, unless they also have the best possible types of business software installed, none of this infrastructure is valuable in any way. Did you know that research firm Gartner, with support of Infor CEO, Charles Phillip, has shown that companies will spend a total of $114.4 billion on business application software in 2016? This is a 10.2% rise since 2010, and it is showing no signs of slowing down.
Every business that experiences, or wants to experience, high growth will at some point struggle with determining which type of system they need to use in order to be able to manage this sustained growth. It is vital that they properly plan to find an integrated software system that helps them to manage their overall business. Unfortunately, however, most businesses continue to focus most strongly on revenue acceleration instead. The consequence of this is that, once a company does achieve the projected growth, they have a wealth of different applications running that don’t collaborate with each other. This makes the overall business process wholly inefficient, and they have to spend thousands in trying to find ways to integrate the various pieces of software. It is very important, therefore, to have a greater understanding of business systems first, thereby avoiding individual silos that cannot work together.
How Siloed Systems Are Constructed
If a company experiences rapid growth, it often becomes burdened with complex landscape of different applications. When a business first starts, they often start with a single focus: their accounting software. Their bookkeeping has to be properly managed first, after all.
After that, they start to think of ways to get more customers into their businesses. Usually, they will acquire yet another system for this, which will be a customer management system. As the business grows, they will add a customer support system, an order management system, an inventory management system, and a fulfillment system. Plus, everybody will usually work with their own spreadsheets to cross reference things. In a properly running business, however, all of these elements have to work together and this is impossible if many different systems are being used.
This siloed process becomes even worse with further growth. Companies will start to open new offices, and will effectively start the process again. They may, at that point, add even more systems, such as financial consolidation, recurring billing, and ecommerce integration. Interestingly, proper integration is even more important here, because these elements link to the financial viability of your business. The worst siloed businesses actually have applications for every individual vendor, while at the same time building their own spreadsheets and applications.
If a business continues to evolve in this manner, their architecture will be so complex that collaborative working becomes impossible. In the long term, this will hold the company back quite a bit, stopping the growth in its tracks. People become less productive, less flexible, and less engaged in the business. This is why it is so important to have properly integrated business software in place from the word go.