By Richard Firth, CEO and chairman of MIP Holdings
What gives some corporate leaders the edge, the ability to turn ordinary companies into great companies, while other equally or better-qualified leaders seem to drive their companies into a hole? Is it luck, or some secret only certain people know?
In 2001, author Jim Collins released a book titled "From Good to Great". Based on five years of research, the book examined companies that had stood the test of time and delivered constant, almost predictable growth. He also examined the driving force behind this stellar performance - the organisations` leaders.
There were numerous reasons for success emerging from the study, such as getting the right team together, staying focused and managing according to the facts. The most interesting of the findings, from an IT perspective, is the trend among these leaders to opt almost exclusively for bespoke business applications. In addition, successful companies tend to promote from within.
In the hands of a competent management team, bespoke software delivers all the benefits promised by standardised software vendors, in addition to competitive advantage over others which are trapped in business processes defined by their software suppliers. Moreover, a manager who has risen through the ranks of the company can better manage this software as he knows the business processes unique to the company. These leaders are able to guide the development process to ensure it delivers the optimal applications for the company.
The bespoke route makes perfect competitive sense as well. Traditional business applications are enormous systems developed according to someone`s best practices. And if the customer`s own processes are different from these standards, the business needs to change to match the software. The option to customise a large ERP system does exist, but the complexity and risk associated with these systems increases with every change made.
But how can companies effectively compete when their business processes are all moulded to the same business processes their opponents use? Entrepreneurs succeed because they are different and break the rules, not by doing things the way everyone else does. The same applies to companies wanting to prosper for the long-term - doing what everyone else is doing is not a recipe for a profitable future.
Bespoke answers to local needs
Apart from serving the needs of companies, bespoke software may also be a recipe for a profitable future for SA - a country supposedly in an economic boom, but suffering from massive unemployment. Our technical skills have been put to the test in the past and found to be world-class - South African technicians are quickly snapped up when they go overseas. So why are we not adding $1 billion annually to the economy - as India did in 2003 - by selling software to Europe and the US?
We cannot produce software as cheaply as India, China or other emerging markets, but we have the development capabilities to deliver quality at a low dollar cost. Focusing on software development will not only bring money into the country, it will encourage businesses to upgrade their IT skills and the follow-on creation of jobs could make a dent in our unemployment numbers.
Up to business
While many people are waiting for government to do something to create jobs, I believe it is up to business to see the opportunities in the market and grab them. Government should play a supportive role and, as the software business improves, so will the number of people employed in the industry and the skill levels in the country (as will the taxes they pay, enabling government to put more into creating a better life for all). If India can raise the bar from nothing and create billions in wealth from applications and associated services, SA should be able to do the same, delivering a higher quality product.
Bespoke software does take a little extra work and a lot of extra thinking, but the performance, productivity and profitability benefits it delivers more than compensates for the costs. Standards are great when it comes to platforms and technologies; but creativity is greater when it comes to maximising an organisation`s intellectual property.
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