The Cost and Risks of Disparate and Inflexible Systems

May 14, 2020

Does this sound familiar? You’re using disparate systems, most of which aren’t fully integrated. Your IT team manually inputs data and physically amalgamates reports. They try their best to make informed decisions, but they are using outdated data that comes in different formats and often without context. Your team has a handle on incident management and request fulfillment, but you want to do more—expand to problem management, change management, release management, and configuration management. 

Michael Robinson, the CIO of Shutterfly, wanted his IT team to move to the next level. As an online retailer, Shutterfly has experienced several acquisitions and mergers, which has meant dealing with disparate ITSM platforms running in parallel. They chose ServiceNow as their unified solution.

Many businesses in all types of industries face similar challenges associated with disparate systems: too much time spent on non-value-added activities, too much resource-burn, and not nearly enough reliable data. With companies across industries investing (on average) only 3.28 percent of their revenue into IT, these risks and costs are unacceptable. The good news is that there is a smarter way to manage systems that mitigates these issues and puts your company ahead of the competition.

The Cost and Risks

Three costs of disparate systems that hurt businesses the most include the following: non-value added activities and their corresponding costs, resource and time burn, and data inaccuracy. 

Inefficiency 

Here is the breakdown of how software developers spend their day, according to a 2019 survey by Tidelift and The New Stack:

  • 32 percent on writing new code or improving existing code
  • 23 percent on meetings, management, and operations
  • 19 percent on code maintenance
  • 12 percent on testing
  • 4 percent on security issues
  • 9 percent on other tasks

It’s disheartening that only a third of an average developer’s time is actually spent innovating and moving the business forward. According to the 2018 IDG Economic Outlook Survey, 66 percent “of IT budgets are allocated to performing current status quo tasks, and not on digital-focused innovation.” Why does this happen? Chances are, these employees are bogged down by inefficient and disjointed processes in their maintenance and operations tasks. While they could be giving their core duties the attention these tasks deserve, they’re instead performing time-consuming, manual tasks that make errors much more likely.

For example, let’s say a sales team is working overtime to manually re-enter order information that they entered incorrectly into the invoicing system. Before the correction is complete, other employees take that incorrect information from the CRM system to fulfill orders and calculate sales commissions. Then several customers cancel their orders. Now what? The employees must manually search through piles of data to reconcile the information.

When employees in any department are entrenched in such manual, labor-intensive, and urgent tasks, important things can fall through the cracks. For example, your IT team might unintentionally be paying for redundant or non-value-adding software, meaning you’re accruing useless licensing fees. Non-value-adding or redundant activities aren’t just a waste of money—they steal time away from tasks that could help the company grow and innovate.

Wasting Time and Resources

Having multiple, disparate applications wastes time and money. It’s simply how the math works out: X applications require X integrations, maintenance schedules, upgrades, and separate efforts to acquire new versions. Additionally, every time a new version is purchased, the team needs to put in more work to make sure the new version works well with all the other apps it needs to interact with. With all this extra work, time that IT could be spending on making the business more productive is instead wasted, and maintenance costs go up. 

When companies have disparate systems, they’re not just spending money where it doesn’t matter; they’re also not spending money where it does matter. For example, let’s say time spent on upgrading applications takes away from security innovations. That might cause a costly oversight! A study from IBM Security and the Ponemon Institute found that the average total cost of a data breach is $3.92 million per incident, and that number has been climbing. Is a potential loss worth keeping around old, disparate systems with which the team is comfortable?

Data Inaccuracy and Poor Decisions

Disparate systems often contain overlapping databases, which means it’s hard to get an accurate, integrated view of business performance and operations. It’s crucial to be able to quickly generate accurate reports across all departments, from finance to fulfillment. Without accurate data, it’s almost impossible to make informed decisions.

Making decisions based on poor data costs businesses an average of $15 million annually, according to Gartner’s Data Quality Market Survey. How does this happen? Many businesses give up trying to pull data because of how unreliable the information is and because it is so inconvenient to pull it in the first place. Other companies continue to pull data anyway and end up spending far too long trying to puzzle together unrelated, old data points together. Either way, these companies either make decisions slowly based on inaccurate data or make risky, hasty decisions based on gut instinct.

The Smarter Way to Manage Systems

Vanson Bourne and SnapLogic surveyed 500 UK and US IT companies across industries. Fifty-five percent of respondents reported “that over-reliance on legacy technology and lacking the right tech tools is one of the biggest challenges to their digital transformation.” These legacy tools can be a root cause of disparate systems.

“The key focus of the CIO should be on the strategic imperatives of the business,” says Tobias Büchsenschütz, strategy analyst at Accenture. “Thus, they need to . . . build teams skilled in agile methods and new tools/techniques to simplify legacy architecture and reduce cost pressures. Otherwise, they will find themselves unable to accelerate the innovation agenda and will have to let others in the organization lead the way.”

The smart way to manage systems is to have them all connected throughout the organization. With just one system, there is efficiency, data accuracy, and faster decision-making. ServiceNow is an integrated solution that provides these benefits.

While disparate systems contribute to inefficiency, wasted resources, and poor decisions, ServiceNow provides just the opposite. It’s efficient, automating activities across departments so that human talent can do what humans are needed to do. It provides real-time, accurate data visibility from one source. (For companies in the electronics-manufacturing industry specifically, predictive maintenance using accurate data could reduce costs by 20 percent and unplanned outages by up to 50 percent.) And with so much less time spent toggling from app to app, it provides significant IT time and cost savings.

For example, GRUMA, a manufacturer of corn and flour tortillas headquartered in San Pedro, Mexico, was trying to correct poor service due to the disparate, manual systems in its IT workflows. ServiceNow helped improve workflows, automate several processes across departments, and optimize tasks. These intuitive, automated solutions helped increase productivity and improve business processes. 

The benefits of upgrading from manual processes to one automated, cloud-based solution are plentiful. Doing so “helps streamline process flow, access helpful analytics, improve decision-making capabilities, avoid costly rework and downtime, simplify performance monitoring, [and] deliver to the market faster, . . . all while improving quality and reducing waste,” according to Border States.

How You Can Get There

Consolidating systems onto one platform may sound like a huge undertaking, but it's absolutely achievable. We help customers do this very thing all the time. We find that it’s sometimes best to phase the process out into manageable steps. Many businesses find success by starting in IT, as Shutterfly did, and then moving out from there once they see success. By taking a strategic approach that has been proven to work, our customers are able to deliver speed to value early on in their ServiceNow journey.

For example, Jabil, a manufacturing services company, was able to implement ServiceNow on a step-by-step basis. They needed a single-platform, flexible workflow engine for its PPM, and it wanted to extend the platform by itself without having to rely on the vendor. They already had ServiceNow ITSM, so Servicenow for PPM was an easy choice.

Many companies are plagued with an ecosystem of disparate systems, leading to too much time spent on non-value-adding activities, too much resource-burn, and not enough reliable data. The good news is that these risks and costs are avoidable. The smarter way to manage systems is to implement one unified system like ServiceNow. 

Reach out today to learn how Crossfuze, a ServiceNow Elite Partner, can help you get started. 

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