Let Innovations Flow Across the Enterprise

CapEx to OpEx

From my experience in line production, use of external software and especially software provided in a service model, is disruptive to the prevailing paradigm. Competing alternatives were limited to self-hosted or local computing applications. Even when acquired by the largest competitor in the market, the order processing, financial reporting, and CRM systems were not explored. Steps toward SaaS in CRM (Salesforce) failed in the end. It was disappointing because the potential couldn’t be realized since other business processes were insulated from this disruption. The failure was due to lack of ERP and the benefits it would bring to any firm in the production/manufacturing sector.  This illustrates some practical implications of SaaS innovation being introduced in a sector that concentrates on operating expenses not capital expenditure.

Tech manufacturers are looking to reduce investment without losing business value or services. Also, lean isn’t mentioned but those manufacturers who champion the philosophy will also see benefits with closer to real-time inventory and close affinity to operating processes.

The moral of my story: trying to keep innovation isolated for fear of disruption is not a risk mitigation technique, it’s a failure of vision.

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Posted in Innovation Management

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