Deciding what to improve first

Most businesses already have a pretty good idea of what isn't working as well as it should. The harder question is deciding which improvements are worth investing in first.

We'd start with the business strategy. What are you trying to achieve, and what's getting in the way? From there, narrow the opportunities down, make a sensible first-pass assessment of the value, cost and effort involved, and build a roadmap the business can actually deliver.

That sounds straightforward, but it helps avoid spending money fixing things that don't materially move the business forward, or trying to change too much at once.

The answer won’t always be technology. It might be a process, a supplier arrangement, better information, automation, AI, a system change or simply getting more from what you already have.

Start with where the business is going

Before deciding what to improve, come back to the strategy.

What is the business trying to achieve over the next few years? The priority might be growth, improving margin, increasing capacity, entering a new market, improving customer experience or reducing risk.

That gives you a basis for deciding which problems really matter.

A business will always have things that could work better. Something that's frustrating isn't necessarily a priority if fixing it doesn't move the business towards its goals.

If the strategy is to grow without adding overhead at the same rate, manual processes that don’t scale become important. If margin improvement is the priority, poor visibility of costs or supplier performance might deserve attention. If the business is entering a new market, capacity, systems or data that were perfectly adequate yesterday may suddenly become constraints.

Strategy helps turn a long list of possible improvements into a much shorter list of things worth investigating.

Make sure you've got the problem right

Before deciding what to buy or change, spend a little time making sure you've got the problem right.

If your month-end reporting takes ten working days, replacing the ERP might be one answer. But the real problem could be poor data, unnecessary approvals, manual reconciliation or systems that don't talk to each other. A much smaller change might solve most of the problem.

We've seen both sides of this. Businesses can contemplate major system changes when a smaller intervention would address the immediate problem. We've also seen businesses continue working around systems that genuinely have become a constraint.

The important point is to understand enough about the problem before committing to the answer.

Consider more than technology

Modern cloud applications, integration tools, automation and AI can make improvements possible that would previously have been too expensive or difficult. Buying something new is still only one option.

You might be able to simplify the process, remove unnecessary work, improve the information available to people, change responsibilities, improve a supplier arrangement, renegotiate a contract, configure an existing system better or connect systems you already have.

Sometimes replacing a system really will be the right answer. Sometimes the best decision is to do nothing for now.

The point is to consider the problem and the available options before deciding that a particular solution is inevitable.

Run a ruler over the opportunities

Once you've identified the opportunities that appear to support the strategy, we'd suggest running a ruler over them using a few basic lenses.

• Value: If we do this, what difference will it make to the business? Revenue, margin, capacity, customer experience, resilience or risk?
• Cost of doing nothing: Is this simply annoying, or is it getting more expensive or constraining growth?
• Investment: What will it take in money, time and resources?
• Practicality: Can we realistically do this with the people, capability and resources we have?
• People: What will this mean for the people affected, and how much change are we asking them to absorb?
• Time to value: How long before we see a result?
• What does this enable?: What becomes possible if we do this first? Some work may have modest immediate value but remove a constraint or create the foundation for more valuable improvements later.

You don't need a complicated investment model for every improvement. You do need enough information to compare one opportunity with another, including the option of doing nothing.

For larger investments you might need a proper business case. For smaller ones, a sensible estimate of the value, cost, effort and risk may be enough.

The purpose isn't to produce false precision. It's to get enough information to make a sensible comparison.

Build a roadmap you can actually deliver

Once you've looked across the opportunities, you'll probably find a few things worth doing now, some that need more investigation and others that can wait.

Some things also need to happen first. Improving data might enable better reporting or automation. Updating a core system might provide the foundation for later process improvements. That can justify doing something early even when its immediate benefit is relatively modest.

But enabling something doesn't mean you need to deliver it at the same time.

A core system replacement is a good example. Its business case may rely partly on improvements the new system will make possible. That doesn't mean all of those improvements need to become part of the system replacement. That's one way a relatively straightforward project can grow into a large, expensive transformation programme.

The business case can explain where the longer-term value will come from without requiring all of that value to be delivered in one project.

The roadmap should also contain a sensible mix. You might have one substantial piece of work underway alongside a few smaller improvements that deliver value sooner. What matters is the combined demand on money, people and management attention.

A plan containing ten worthwhile projects isn't much use if the organisation only has the capacity to deliver three of them well.

Start somewhere useful

A roadmap doesn't mean waiting until everything has been analysed before doing anything.

There will often be an improvement that is relatively easy to understand, closely aligned with the strategy and practical to deliver.

Start there.

If growth is being constrained by a manual administrative process, for example, understand the process, establish what it costs today and look at the realistic options for improving it.

Work out roughly what each option will cost and what benefit you expect. Decide whether the investment stacks up. Then deliver it and see what happens.

That gives you something more valuable than a theoretical roadmap. It gives you evidence.

Check whether it worked

Go back and check.

Did the improvement deliver what you expected? Did the promised capacity get released? Did margin improve? Did customers notice? Did operating costs fall, or did they simply move somewhere else?

The answer helps with the next decision.

Over time, the business gets better not just at delivering improvements, but at choosing which improvements are worth making in the first place.

Improvement doesn't need to mean transformation

Sometimes major change is necessary. Often it isn't.

A practical starting point is to understand where the business is going, identify what's getting in the way, work out which improvements would make a meaningful difference and compare them against the money, effort and change required.

Then build a roadmap the business can actually deliver.

Choose something worthwhile. Deliver it properly. Check whether it created the value you expected. Learn from it, and then consider the next one.

You don't have to fix everything.

You need to be confident that you're working on the things that matter.