Grudge Purchases: When It Ain’t Broke, But You Have to Fix It Anyway

Here is a vexing issue that comes up frequently in our conversations with CEOs: when they’re forced into a major ERP or back-office replacement project driven by supplier issues rather than their own ambitions.   

Often CEOs express frustration at these “grudge purchases,” and the project can become particularly challenging as a result.  

Why grudge purchases happen 

Commercial products can have a lifetime of around 10-15 years—until the vendor decides to end support or even kill the product. Their customers are then forced to make a change, as Sage 1000 users are finding out right now.  

Some will simply switch to an alternative product from the same vendor or to another option recommended by their support partner. Others will use it as an opportunity to reassess their strategy. Either way, the change comes from somewhere else, whether they want it or not.  

Another example: we often work with mid-market businesses who, over the years, have developed their own custom system. Suddenly the developer loses interest, becomes unavailable or even retires—it happens more often than you might think!  

Why change creates problems  

There are several common factors in these situations. First, the system is embedded in operations, often for many years, and nobody has reconsidered its usefulness until they absolutely had to. Second, the business may lack the expertise or management capacity for a major system replacement. And finally, staff are so used to the old system, they grumble a lot about learning a new one.  

All of the above invites disaster, because the transition is likely to be expensive and time-consuming. And, critically, success requires energy, commitment, and vision.    

What leadership should do 

The first thing to recognize is that this is an opportunity. (In fact, we’re currently working with a client whose updated systems are winning them more contracts with enterprise clients!) Here are a number of ways experience has taught us about turning a grudge purchase into a positive:    

1. The C-suite has to grasp the reality of the situation and ensure everyone in the company truly understands the necessity for change—which will mean repeating the message early and often. 
2. The leaders of the business should create a sense of opportunity and innovation—it’s a time to take on new ideas, to learn from what other companies do in the same market and others. (And if you don’t have the right IT leader, it may be time to find one.)
3. It’s the right moment to reduce reliance on individuals. Often the old systems are run by people who jealously guard their knowledge; a new system is an opportunity to get rid of those bottlenecks and develop new talent.
4. This is also a great opportunity to rethink the business from the point of view of the customers and the things they value. Consider your choices from their perspective, which will help clarify a lot of decisions.  

In short, the project has to be changed from a grudge purchase to an exciting transformation. The new shoes may not be as comfortable as the old slippers at first, but you can’t step forward without them.  

If you’d like to have a conversation about your grudge purchases, or your dependence on suppliers or individuals, get in touch. We’ll help you assess your level of risk—no-strings, no-pressure, even if you never become a client.  

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