Supply Chain Management Software – Logility

Sorting out the balance between standardization and quality

User: “Corporate is pushing a non-functional system on us. We’ll have to do more work, our costs will go through the roof and we’ll lose customers…don’t they realize this will be a huge step backward for us? Are they nuts?”

Exec: “These users are being total luddites, digging in their heels and dragging their feet. Don’t they realize the savings in efficiencies this corporate system will bring? It’s like they’re trying to put us out of business. Are they nuts?”
Sound familiar?

One of the most common political dynamics in the customers I deal with is the tension between corporate forces pushing standardization and business units advocating their specialized value-add solutions. This often manifests as the business or geography justifying the deployment and use of a ‘best of breed’ solution while the corporate IT group promotes a standard solution.

What makes this a dilemma is that both sides are right. In fact, the ancient Greeks invented the concept of “dilemma” to literally cover the case where there are two good solutions to a problem, neither of which is incorrect. To choose one over the other means some compromise.

Setting the inherent politics aside, the two sides square off with the following arguments. 

• The Standardization team posits any loss in quality of solution will be more than made up for by the gains in efficiency through standardization. It is a pure efficiency case. Users will be able to do more with less and do it faster.
• The Best in Class team argues they will lose quality in the output of the solution and will ultimately lose some of the competitive uniqueness of their business. The very capabilities that differentiate them in the market would be threatened.

It’s understandable that things can get heated.

I have seen these battles take place literally hundreds of times. When both sides are right, we have a dilemma, and the winner is usually politically stronger and better aligned with the company’s zeitgeist.

When I’m counseling a customer on this dilemma I offer the following advice:

1. Understand this is a real dilemma, not just political battle within the organization. People scratch their heads in frustration, wondering why it is so hard. Why are the users so mad? Why is everyone so upset and obstinate?
2. Try to quantify the sides. How much efficiency will standardization yield for the organization? How much quality in the solution will standardization impact? The more you can quantify things, the easier the decision becomes.
3. Align your decision with corporate goals. Is your company’s competitive advantage operational efficiency or unique operational quality? The CEO and the board know what the answer is. It may become clear that one or the other side of the argument is not aligned with where the organization derives its value from in the marketplace.

Most importantly: Make it hard to do the wrong thing. The wrong thing in this case is to try to make everyone happy. There is no good solution between the bull’s horns, yet this is where organizations inevitably wind up with compromises.

It makes no sense to customize the standard system to look just like the old process, and it makes no sense to throw away years of business-unit-specific competitive awareness.

You have to do the work. You have to determine what is important to the company and align your decisions with that. Push those modification and standardization decisions up to a level where the impact is balanced and thoughtful. The head of IT will almost always side with standardization. The business unit chief will more than likely side with local value and quality. It might be a group level executive who has the unbiased ability to balance the decision appropriately.

In summary, if you find yourself struggling on the horns of this dilemma, you’re not alone. Take the time to make thoughtful decisions, hard choices and be sure that value, quality and competitive advantage are balanced with efficiency.