The trouble with the 80% solution

Andrew Newnham

By Andrew Newnham (Fruition Data)
Like it or not, IT plays a big part in business today. Even the smallest businesses use IT solutions to manage their finances, order supplies and communicate with their customers. Given software is now totally ingrained in business you need to be sure you’re running the best software possible, and if your not, you need to look at upgrading it.

You may have heard of the 80% software solution. The 80% solution is something which has appeared in business advice columns from time to time. It suggests that rather than finding or building the perfect piece of software, simply find a piece of software that does 80% of what you need, and work around the missing 20%. It’s claimed that it’s cheaper to do this than find or build a piece of software which covers 100% of your needs. It’s true, in the short term it is cheaper to find the 80% software. The problem is, what is the missing 20% going to cost you over the long term?

I’ve recently worked on a project for a company that had used the 80% solution to manage their finances. After reading an article about the 80% solution they purchased a piece of software because it did most of the reporting that they required, they figured they could manually generate the reports that the software was missing. This seemed like the perfect solution, until they did the sums. It was costing the company more in employee time to work around the softwares faults, than it ultimately cost them to upgrade the solution to cover 100% of their requirements. In fact they worked out that it had cost the company more to use the 80% solution in the first 6 months, than it would have cost them to purchase the correct software in the beginning.

This week look at the software systems you are running. Are there any weaknesses which need to be addressed? If so, what are your workarounds costing you? Sometimes these weaknesses can be addressed simply by purchasing or building an add-on, and at other times they can only be addressed by deploying a brand new system Either way, you’d probably be in for some big long term savings by investing some money into your software solutions now.