SIC: The Snowball Effect Draining Your Business
I've always felt uncomfortable with countless corporate software systems, layered like a Russian doll.
you think you'll find the solution right away, but then you realize you need to keep adding products or buying from the marketplace. at the end of the day, there’s little clarity about SIC.
from this, I have four reflections on how we can deconstruct and simplify this problem:
- building in-house has an upfront cost, but long-term returns outweigh the trade-off
most enterprise software requires consulting, customization, and months of implementation in the long run, internal systems have a near-zero marginal cost.
- building in-house makes sense when it provides a competitive advantage
proprietary APIs are a great example, ensuring full control over any integration.
- 90% of companies have bloated IT departments
ERPs and CRM are often overpriced, draining margins. the solution? If you have high-agency people and it’s a competitive advantage, migrate to a proprietary system.
- margin retention is more important than cost-cutting
vendors always position themselves as "cost reducers," but before reducing costs, we need to retain margin— not let it evaporate with every consulting fee, implementation, or software customization. the impact on cash flow is huge. avoiding SIC is a long-term play
to improve, we need to step out of autopilot and recognize our "assisted ignorance" about it. t’s a small snowman about to turn into a 5-meter snowball.