Rationalizing your redundant systems

This 7 min read looks at the true cost of ownership from redundant technology platforms and provides a step-by-step approach to assess and address your own duplicates

It’s time to do a double take on redundant systems. Think about your own company, how many overlapping database, analytics, marketing automation, or content management tools are in use today? From using Qlik and Tableau for reporting to mailchimp and marketingcloud for email, each redundant service has its outstanding features, invested expertise, and a story why it’s essential. Each redundancy also increases fees, silo’ed teams, tech complexity and overhead. In this back and forth there is one clear and correct answer on the relevant value of redundant platforms: it depends. 

Why does redundancy happen?

• Product technical evolution: platforms add new features over time, overlapping with existing tools in adjacent areas
• Mergers: integrating a new business and their legacy marketing stack
• Separate business units or geographic teams don’t coordinate or prefer to use tools best suited for their region and localized stack
• Functions with different scale or maturity: smaller teams may not be at the same stage of maturity, have the expertise, scale, or budget to thrive on more powerful but complex tools used in the larger units
• Can’t get rid of the dang thing: some legacy systems are so entrenched its “easier” to leave them in place 
• Shiny object syndrome

Is Redundancy good or bad?

To answer this question, it’s important to understand each core benefit against the relative trade-offs it creates. The below table illustrates some generic benefit and consequence statements:  

 Figure 1: Generic Benefit/Consequence Continuum

Looking at the above list one notices how the benefits are clear and tangible to the business user while the consequences are often obscured or intangible.  If the business owner is making the decision, the redundant platform is a clear winner unless the intangible consequences can be quantified and allocated. How might this work? 

4 Steps to understand the true cost of a set of redundant platforms:

1.      Talk about it: Encourage dialogue between the relative parties to clarify the true requirements and how best to solve them

2.      Define the trade-offs: Use the benefits continuum above as a starting point, but spend time distilling the key tradeoffs for your solutions 

3.      Prioritize: Take an honest assessment of the priority for each trade-off and whether the consequences are material or can be addressed with a simple work-around

4.      Quantify the Cost of Ownership: Recognize and assign costs incremental platforms create for the impacted business, operations and technology teams. These are numerous, but can include:

• Duplicate & Incremental Costs: Licensing fees, transaction fees, marketing ops & technology support, training & certifications, etc.
• Resource rigidity: teams and templates limited to their own platform
• Interoperatability with core platforms: including CRM, Marketing Automation, databases, ERP, and financial
• Reporting consistency: reporting integrity, timing, and consistency 
• Data flow, storage, availability, and control
• Impact on future tech development: duplicate platforms slows development time
• Branding consistency: look and feel of messaging across platforms

 Ready to try this out? The following example looks at redundancy caused by product technical innovation and geographic diverse business units.

Donation Platform Example:

Donation software-as-a-service platforms for charities and Non-Government Organization’s (NGO’s) are a great example of product technical evolution. Like the lead generation teams in B2C, donation teams generate a significant portion of total working capital (revenue) and often merit best-in-class platforms to maximize success. This has led to a rapid evolution of donation platforms to offer advanced marketing solutions wrapped in a comprehensive suite of communication, engagement, and donation tools. Springboard and iRaiser are two such best-in-class examples.

Let’s consider a multinational NGO that uses both donation platforms in different regions. This worked fine in the past because the localized structure of teams, communication formats, and IT teams insulated the donation tools and minimized the cost of integration. Fast forward to today and the platforms have evolved to intersect or replace existing marketing automation, CRM, social, and webpage elements. See below for an illustration of how iRaiser and Springboard now overlap several portions of the marketing stack. 

Figure 2: Donation Platform Capability Evolution

As the donation teams develop more and more sophisticated multi-channel journeys, they increase the investment in the training, templates and customization of their respective tools. This entrenchment conflicts with an organizational effort to simplify platforms and enhance the consistency of experiences and data across the customer lifecycle. Perhaps even more problematic, customer data exists in various formats and locations creating challenges for distinguishing and personalizing journeys for different donor types.

Using vendor comparisons, I’ve updated the consequences section and added a “Findings” column with potential findings for our hypothetical example:

Figure 3: Example Donation Platform Benefit/Consequence Continuum

So is it better to consolidate the donation platforms across geographies? Should we choose the one that better integrates with salesforce? It depends. 

If the donation generation teams can continue to thrive on their platforms in relative isolation from the larger set of CRM, systems, and data, the benefits of consolidation may not be worth the lost expertise. The tools aren’t that costly themselves but I’d model out the donation volumes at higher transaction volumes since every 10k donations = $1,000 in fees. Also important is to solve any defined gaps in access to donor populations. 

Digging deeper into the cost of ownership, it’s important to assess the potential impact of overlapping tools on data completeness, speed, and costs for managing in the hybrid environment. A good idea in capability evolution cases like this is to plot the usage of various overlapping functions like email, content creation, and reporting back to the core customer record to assess any loss of fidelity, control, or decision making. Finally, recognizing any impacts to areas like customer experience and the longer-term tech platform roadmap should also be included in the final decision.   

One thing is for sure, platform redundancy is a part of life for the modern organization. How well teams plan and manage these redundancies will determine their ability to drive maximum performance and ROI. In this spirit, here are 4 additional steps to help you build a culture of collaborative management, planning and results.

Steps to make even better decisions about your tech stack

1. Advisory Council: convene a group of key stakeholders for a monthly forum to discuss platform challenges, opportunities, and invite speakers on new innovations like blockchain and AI
2. Develop a Roadmap: track larger and interconnected platforms on a 5-year roadmap. Differentiate platform status by its relative longevity in the market and within the company: Assess, implement, invest, maintain, sustain, discontinue 
3. Economic allocation: If the drag of a redundant system creates significant ongoing costs for other teams, it’s worthwhile considering a defined budget transfer between units to cover some portion. This ensures the true cost is felt by the business team and the tech and ops teams are resourced to provide support at a defined SLA
4. Make data a priority: give robust and efficient data flow a permanent seat at the requirements table

Want to discuss these or related topics more? Contact me and let’s talk.