Corporate Excavations and Renovations

To Build, You Must First Destroy

My previous article was about the necessity of a complete due diligence. Now, let’s see what happens when the floodlights are finally turned on, the dust settles, and reality becomes visible.

The Foundation

If your core system was built when orders arrived on fax, slopping on shiny new UI or AI modules is not digital transformation. It’s digital makeup. (SAP 1972 ;).

You can build a new system on the ruins of the old one, but from a structural engineering standpoint, I have serious doubts. What condition is that foundation really in? Can it actually bear today’s market environment? What was its original purpose, and what kind of limitations does it impose on you today?

Imagine building a cloudscraper on top of a 1970's socialist-era cookie-cutter house. (cloud, you know ;).

Or imagine tearing it down, you find a mainframe dinosaur buried beneath the basement — in perfect condition. If you mount solar panels on this dinosaur, you won’t get an eco-friendly, high-efficiency machine. You will just have a solar-powered dinosaur, stinking in the sun at an even higher cost.

Let’s look at this pragmatically: is your growth static or dynamic? Is it just getting fat or transformation?

When a grain of sand gets into the gears, a dynamic company completely rewrites its internal processes instead of deploying yet another shadow-excel or a custom-coded module (tool sprawl). That is, if they are brave enough to destroy.

Tool De-sprawl

By boldly tearing down the foundations, we finally unearth what lay beneath: the “sacred past,” the status quo cast in concrete, and the corporate value leaking through the cracks.

Often, it’s pure lack of resolve holding us back, fueled by the illusion of “savings.” But here is the hard truth: whatever you think you are saving by not decommissioning an obsolete process, you will pay back multiple times over in customization.

In these desperate restoration attempts, a massive chunk of the implementation budget is burned on things that deliver zero business value. The illusion of efficiency and the fear of change carry a very clear, quantifiable price tag: the Customization Tax. And make no mistake, it’s a progressive tax type.

Customization Tax

As the figure shows, you pay a compounding premium for unjustifiably customized systems. To make matters worse, their true future costs will lurk in the dark zone for years to come.

Redesigning your processes from scratch yields a double dividend:

1. You save the vast majority of implementation costs.
2. Your operations become cost-effective, lean, and agile.

The Superstructure

“We have a process that requires 12 approval steps because back in 2008, someone stole 10 kilos of machine grease. It has been part of our collective punishment ever since.”

This process is nothing more than a monument to a 2008 incident. The “digital transformation” of these preserved rituals does only one thing: it automates the bureaucracy.

Corporate evolution is either growth or transformation. Both have their time and place. But past a certain point, you can no longer build on last century’s logical foundations. Evolution is painful because you have to let go of your “sacred rituals” , but extinction is far more uncomfortable. Not every dinosaur was wiped out by a meteorite, but all died out simply because they failed to adapt to a changing climate.

The Solution?

Use the system implementation as an opportunity for a ruthless reality check. Use it for a thorough business and technological decluttering.

Wherever a process fails to create business value, apply brutal simplification and standardization. There are decision trees out there to help you (e.g., Gartner), but you can also just ask one simple question:

„If we are a startup today, would we really do it this way?”

If the answer is no, then that legacy process is not an asset. It is a historical deposit that needs to be demolished all the way down to the basement to make room for dynamic, cost-effective operations. This is the core of Business Process Reengineering (BPR).

Are you evolving, or just getting fat?

• Is your growth static? (More software modules, more power tape, more shadow Excels in dark corners.)
• Or is your growth dynamic? (More flexible processes, instant feedback loops, and zero wasted rounds.)

Originally published at https://www.linkedin.com.