The Silent Killer: When Good Software Stifles Innovation and Growth

Your Best Application Might Be Holding You Back

You wake up with a brilliant idea. Why not create a new service for your company?

It’s innovative, solves customers’ pain and can create a significant business revenue. Best of all, the service is simple to roll out.

But then you remember.

Your current ERP - a solid, reliable system running your business for over 10 years - cannot support modifications required to implement the service. Not without significant rework and expense. Your idea is dead - and your business is now officially revolves around “King Software.”

Such software is not broken or full of bugs - quite the opposite. It had been successfully supporting business functions for a long time.

But now it’s misaligned with where your business needs to be, forcing processes and sidestepping innovation.

The cost of this misalignment is not obvious but real: missed opportunities, operational rigidity and slow erosion of competitive advantage. The solution requires a fundamental shift in perspective.

Instead of “what’s broken” you need to focus on “what happens if we don’t change”.

How to identify ‘King Software’

Your business relies on core CRM, legacy ERP, custom-built applications. The massive investments in this tech served your business well. But small issues begin to creep up.

Business processes dictated by software

Things must be done a certain way because that’s how workflows function. Even great ideas on how to optimize and improve the processes must be put into the “maybe” pile because the cost of making accommodations is just too high.

Manual workarounds

Spreadsheet formulas, file exports, automation scripts and manual copy/paste steps are required to get around the software limitations. The steps continue to increase as new requirements pop up, slowing down daily operations and increasing complexity and error rates.

Software excuse is common

Meetings conclude with “this is not possible” or “software will not support this,” shutting down innovation and ideas.

Strategy is centered around capabilities

Instead of planning the best move based on market changes or business strategy, every direction is centered around software. The projects are estimated not based on true budget and timeline, but how long would it take to adapt any new change to the existing stack.

King Software is not technical debt

There is much talk about technical debt - clunky old systems that are hard to maintain, had to be created quickly to hit the timeline, with quality tradeoffs and full of bugs. Technical debt needs to be repaid at some point.

King Software is a strategic debt. There is nothing obviously “broken” except for the business needs alignment. This is what makes King so dangerous. It’s hard to justify the investment to dethrone the King, so business starts to experience death by a thousand cuts. Few new automation scripts here, a spreadsheet magic there -just to make the software work for new market realities.

With time, the King expands its reach with multiple software subjects, making it even more difficult to change.

What is the opportunity cost?

If nothing is technically broken and you’ve already heavily invested in the original system, how do you calculate the real cost of strategic misalignment?

New revenue loss

If existing system actively prevents you from capturing emerging market opportunities and new customers, estimate the average loss - while being realistic about possible net revenue.

Existing position loss

If your company cannot be flexible enough to change with the market, the competitors can and will take advantage of that - launching new services and features, responding to customer trends and providing significantly better customer experience because their technology is flexible to support this.

Once the difference becomes noticeable, your position will start to erode.

A simplest example is pizza order - it’s more convenient for the customer to save their favorite combinations, reorder online, and pick dinner on the way home instead of having to call and reiterate the order every time.

Talent loss

One struggle multiplied across the working week creates resentment and annoyance. If every day is a struggle against a software and waste of skills on creating workarounds, the best and most talented people who have other options will leave.

Productivity loss

How many hours a week are spent on workarounds and inefficient processes that cannot be altered?

I’ve worked with an organization once where three hours each day was spent manipulating data exported from the system so it can be used for operations that day.

Why ‘King Software’ phenomena hurts small business

Trust me when I say - every company has its own variant of ‘King Software’.

But small businesses are especially affected.

Smaller IT teams, tighter budgets, talent pools availability required to pull off such transformations create complex situations.

Start planning as soon as you notice a stifling dependency. These type of projects get worse with time.

How to break the software dependency

It would be a mistake to consider this a purely IT project. Changing the software at the core of the business is a company project and requires support and buy-in from the entire organization.

Start with strategic audit

I like to start with walking the floor and talking to various departments, figuring out the average “day of”, looking for patterns of frustration, inefficiency, manual workarounds and “if onlys”.

The result can be surprising - sometimes it turns out that the system itself is fine and with more training or targeted integrations the expected efficiency can be reached.

But when the problem is confirmed, it’s time for next step.

Architect the replacement

Strategic decisions need to be based on real data.

To estimate the cost of replacement, create a high level proposal. There are few options to explore, but I would caution against “as-is” replacement as it can cause similar problems down the road.

For the sake of the next step, pick multiple solutions to compare.

Building financial picture estimation

Now with the data collected, create a full financial estimate.

Calculate the ongoing financial loss from doing nothing. It’s highly likely that the cost will keep increasing over years, so projection needs to be done over 1-3 year period.

Then calculate the replacement costs per each suggested system. Remember to include temporary productivity loss and training time. In order to compare apples to apples, the cost should be projected across similar time period.

Comparing both numbers helps to make accurate strategic decisions and get everybody onboard.

If loss is less than replacement, see if the solution cost can be reduced - perhaps by a different approach to architecture. If loss is significantly less, revisit in a year.

Remember that the new replacement is meant to support the business of the future.

Starting the project

If numbers do make sense, the project is now officially underway. How to manage and run a major digital transformation project is beyond this article, but I do want to mention a few ‘King Software’ specific issues.

Careful about losing domain expertise

If the core software was around for a long time - and especially if it’s a custom build system - the people who know how it works may no longer be at the organization. Taking a sledgehammer to the business logic never ends well. Be careful about not losing important processes.

Change management

Plan to spend enough time to overcommunicate the changes, explain the reasons and walk all departments through the new system as it comes online.

Communication policy is critical when a large core system changes. Use frustration from the current setup to build up excitement and anticipation.

Listen to the people

Changes that look good from the leadership perspective may end up making people’s work harder. Ensure that concerns and voices are heard - this will go a long way for new system adoption.

Change is difficult but worth it

Solving strategic debt is not an easy fix that can be done in a month. And the work is never done - truly agile businesses need to be prepared to change and adjust to unpredictable events.

Building out your tech foundation so these changes are possible - and the cost and negative impact is minimized - is critical to business success.

But whatever you do, do not let software manage your business. Instead have it support the business model you need.