Engineering Leadership Insights: Practical Strategies for Tech Product Companies - Article 2

Continuing our series, we'll build upon the foundation laid in the previous article and focus on the pivotal role of ERP systems in driving efficiency and cohesion within tech startups. Join us as we examine how these systems serve as the backbone of operations and facilitate seamless communication between different departments.

There are different setups for tech startups — what we're covering in this series is a startup that builds tech to enable its operations. The context shared can be adopted for different scenarios, such as a company building an app offering for their customers without directly running any operations.

As a recent attendee at Leap 24, an innovation summit in Riyadh, I had the privilege of engaging with some of the most promising startups in the region. Among them was an automotive startup with a vision to revolutionize car repair and maintenance services. Drawing inspiration from that company, let's use it as our case study here.

In our scenario, the company offers a comprehensive range of services, including car repair, spare parts procurement, maintenance scheduling, and even insurance services. Their goal? To provide car owners with a seamless experience, from scheduling a repair to driving away with peace of mind.

Departments in our Auto Tech startup

Let's take a high-level look at a few departments such a company might run, each catering to a specific aspect of automotive services:

1. On-Site Servicing: Provides convenient on-site repair and maintenance services for customers' vehicles.

2. Auto Spare Parts: Sources high-quality spare parts for repairs and replacements, ensuring reliability and durability.

3. Insurance Services: Offers insurance solutions tailored to car owners' needs, providing peace of mind and financial security.

4. Workshop Management Automation: Streamlines workshop operations, from appointment scheduling to inventory management, improving efficiency and productivity.

5. Maintenance and Service Department: Handles regular maintenance schedules and service reminders, ensuring optimal performance and longevity of vehicles.

6. Billing Department: Handles all billing and payments.

The term "Departments" in this series refers to these.

Building the Tech Backbone: The Role of ERP Systems

For our Auto Tech company, an ERP system would serve as the backbone of its operations—a sophisticated solution designed to streamline processes, foster communication, and propel business growth. It's imperative to have a Solutions Architect on the Tech team who ensures that best practices are upheld in designing the App modules. One critical aspect for all stakeholders to grasp is the adherence to the single responsibility principle and explicit scope definition in module design. This ensures that changes made to one business flow or module don't produce unexpected side effects or disrupt other parts of the system, a crucial consideration for long-term scalability and maintainability.

Let's delve into the key classifications of modules within this system:

1. Department-Specific Modules: Tailored to the unique needs of each department, these modules facilitate smooth operations and efficient service delivery. For instance, the Workshop Management module optimizes workshop operations, while the Insurance Services module streamlines insurance-related processes.

2. Global Modules: These modules transcend departmental boundaries, serving as foundational components that support the entire business. The Finance module, for example, facilitates invoicing, payment processing, and financial transactions across departments. It's paramount to define clear scopes and responsibilities for global modules to prevent scope creep and maintain system integrity.

Expanding on this analogy, consider the company building a Payments module instead of Financial module as the financial backbone of the company, responsible for handling all monetary transactions. While it may seem straightforward for each department to manage its own invoicing and financial activities, this approach can lead to significant challenges in the long run. Without a comprehensive understanding of accounting principles and compliance requirements, department heads may inadvertently overlook crucial regulatory obligations. Not to mention the saga of spreadsheets for the accounts team even after which accounting errors are inevitable in such situations.

Having encountered these issues firsthand across various projects, I've seen the detrimental effects of poorly designed systems. The opportunity cost of key personnel investing their time in mitigating the consequences of inadequate systems is substantial, not to mention the direct financial losses incurred and the potential damage to the company's reputation. Building robust systems that adhere to accounting standards and regulatory compliance is imperative for the sustained success of any business venture.

Looking Ahead: Bridging Departments and Product Teams

Another common practice I've observed over the years is businesses prioritizing go-to-market strategy, speed, and agility, often at the expense of app stability and architecture, which are relegated to a secondary role. Is it unavoidable and the right thing to do for Startups?

This is a common misconception and one that can be elegantly addressed. We'll delve into this topic in our subsequent series, exploring strategies for maintaining both speed and stability in tech product ventures.

As we continue our exploration of this company's tech ecosystem, we'll shift our focus to the collaboration between Departments and Product teams. Stay tuned for insights into how to navigate the dynamic landscape of tech startups, armed with practical strategies and innovative solutions.

Stay tuned!