Turnkey Solutions: Enough for Your Growing Business?
Turnkey Solutions: Breaking Down the Approach for SMBs
Definition of turnkey solutions: Turnkey solutions are ready-to-go solutions that are easily deployed in a business, effectively needing the end user to simply “turn the key” to get started. Turnkey solutions are very useful for organizations looking to solve a specific issue, but there are certain downsides in that turnkey offerings can lack the customization and integration necessary for businesses today; particularly those for whom flexibility and scalability are important.
They stand in contrast to a custom-designed solution, which is built specifically for the company in mind.
Turnkey solutions have advantages and disadvantages depending on the business, its size, industry, and the needs of the decision maker.
Of course, the reason most decision makers will be assessing why they might need a turnkey solution is because they have come to the conclusion that they need to begin incorporating some level of digitization into their organizations, but they aren’t quite sure what approach is necessary.
Do they need a quick fix for an outdated legacy email server? Or something slightly larger like a UCaaS platform for your communications capabilities with your organization? Or maybe something even more profound?
There are many routes to modernizing a business. Digital transformation seeks a fundamental change of a company using digital technology to improve all aspects of your company, and its necessity for SMBs needing to stay competitive has shone new light on whether turnkey solutions are right to replace older systems in need of change.
Though a digital transformation plan can be adopted quickly, it should not be rushed, and businesses should be confident in the strategy they establish and clear in their ambitions and expected outcomes—the majority of transformations fail because the strategy is poorly planned.
Read the free eBook: Fast-Tracking Your Digital Transformation
Today, we’re going to be taking a look at whether a turnkey solution will suit your needs, and how your current situation and your business needs affect what you should be implementing.
Want to know how a managed service provider like Impact can help you? Head over to our Digital Innovation service page and learn how we can deliver a robust and scalable tech infrastructure with a long-term strategy unique to your personal business goals for digitization.
Before Opting for a Turnkey Solution
A turnkey solution is a lightweight digital strategy to gain the functionality a business needs quickly and in a cost-effective manner. However, before opting for a turnkey solution:
- Analyze your company’s strengths and weaknesses: Will this solution adequately complement the former and mitigate the latter?
- Study the processes that will change: Does this solution demonstrate scalability, or will it need to be replaced if a business grows or shrinks?
- Consider the employees or users who will primarily use this solution: How will it affect the way they work? Are you able to train them adequately during the implementation period?
- Calculate the long-term costs of the solution: While it may cost less up front, are there potentials for hidden fees or additional expenditures later? For example, are you considering an SaaS solution that has lower costs initially, but should you want to scale rises beyond what you’d be willing to pay?
Is a Turnkey Solution the Best Option?
A turnkey solution may be appropriate for a particular business, particularly when:
- You don’t need to address a very specific need. An e-commerce SMB is unlikely to need a custom-built CRM, because the options already on the market exist to satisfy that need perfectly adequately.
- Cost-savings are a priority. Turnkey solutions tend to be far less costly than custom-built solutions.
- The company needs a tried and tested strategy. Turnkey solutions from established providers in the industry will have a mountain of case studies and reviews for their product and be a known commodity to you.
- Full-scale digital transformation is not possible or desired. If you’re just looking to get your digital feet wet, or want a trusted industry solution, then a turnkey solution may do just fine.
In general, turnkey solutions are reasonable when a company needs a ready-to-go solution that doesn’t need a lot of customization.
For many growing SMBs, this may be all they need. If your digital transformation plan is centered around upgrading your technology infrastructure, for example, turnkey solutions could suit you adequately enough.
An obvious example of a turnkey solution which will service the majority of businesses right out the box would be an application such as Microsoft Dynamics 365 Business Central, a solution that is designed to accommodate a wide array of everyday professional needs without any tinkering.
Enterprise Resource Planners (ERPs) like Dynamics 365 are a good example of turnkey solutions at their best.
By definition, they’re intended to service virtually any business, regardless of industry.
So, when you implement an ERP, you can typically expect to find the most widespread array of functionalities that you’ll find in any digital solution, such as:
- Finance & accounting
- Sales management
- Customer service
- Project management
In other words, everything from a large enterprise to a mom-and-pop store will need to deal with these things, so it would make total sense to consider a turnkey ERP.
Another example would be a public cloud storage solution for your data.
While many businesses require a more personalized private data center for security purposes, like law firms and hospitals, the security of modern public data centers means most businesses are quite content to utilize them for their sensitive data without any of the customization of a private data center necessary.
However, turnkey solutions and a comprehensive digital transformation program can be difficult partners for a number of reasons that SMBs should be aware of. Here’s why:
Digital Transformation and Turnkey Solutions
While it may be tempting to deploy turnkey solutions to simplify an overall digital transformation, they can become problematic in the long run, and they might not satisfy particular needs for some businesses.
Turnkey solutions can impose several limitations on the digital transformation process and actually be counterproductive for a growing SMB, particularly to those in certain industries.
What might be useful in the short-term may cause trouble down the line as you seek to expand or retract the scale of your solutions.
1. Digital Transformation tends to be highly customized
A company’s digital transformation strategy should be highly tailored to that specific business.
Roughly a third (34%) of companies have a digital strategy in place, 31% are planning to introduce a strategy, and 35% have no plans at all
In contrast, a turnkey solution has a lower up-front cost because it’s a single product reproduced en masse.
Customization abilities are diminished, meaning further customization in other areas will need to be carried out to make sure the solution fits.
The result is that you might well end up with a solution that doesn’t fully meet your exact needs, requiring you to come back at a later point and develop a custom integrated solution.
For some businesses this may be an issue, for others not so much, especially if they’re time- or budget-conscious, need to have a system up-and-running, and are content with revisiting their setup in the future.
2. Turnkey solutions encourage businesses to adapt to technology rather than adopt the technology needed for their goals
A digital transformation should be guided by a vision which the CEO and CIO have for what to achieve with the process.
If that clear c-suite agenda for tech change doesn’t exist, the digital transformation will likely fail.
Around 70% of companies experience failure with their digital transformations because they lack a proper, comprehensive strategy
Implementations of digital technology and digital strategies in general often fail because of a lack of a cohesive vision from the top.
In this case, if what was envisioned is not taking shape because employees are having to use a new system or tool that isn’t effective in meeting that vision, then that’s a big problem that could well lead to disillusionment with new digital technology altogether.
As such, it’s extremely important that your digital transformation goals—particularly work processes and culture changes—based on the turnkey technologies chosen live up to what is expected.
Always identify goals first and decide what tools or strategies your company needs to achieve them.
A digital transformation should not limit you; it should give you the impetus to drive your business forward.
3. Turnkey solutions can inhibit integration.
Ready-to-go solutions sometimes lack integration abilities so that the piece of software or technology works seamlessly with other business processes.
For example, a turnkey payroll solution may not come with the capability to interface with a printing environment to streamline the flow of documents like invoices or bills.
If a company is capable of fully transforming digitally, it is unlikely that relying on turnkey solutions will be totally adequate going forward into the future.
Make sure that if you’re planning to implement any turnkey solutions that your business needs with other systems or solutions that they can be integrated effectively and data can be shared between them.
The last thing you want to do is get a brand new set of tools for the job, only to find out that you’ll be creating data silos in your business because your data won’t be unified.
The Benefits of ERPs
We’ve spoken about the role that Enterprise Resource Planning systems play in modern organizations.
Because of their wide and varied applications in business and the prevalence of cloud technology, ERPs have become something of an essential part of modern SMBs.
To further explain the benefits of an ERP and why so many organizations are investing in them, let’s take a brief look at them.
An ERP relies on a variety of modules to bring the management of a process under one roof.
They have several advantages, including:
- The ability to operate in real time
- Support for all applications in a business process
- Consistency to its look and feel across modules
- Flexibility in deployment. In-house and SaaS options exist
- Incorporation of best practices according to each business process
- Systematization of inventories and processes
- The ability to link and analyze the effectiveness of existing processes
- Room for additional customization as necessary
ERPs function best when they’ve been designed and implemented with specific organizational processes in-mind.
Here at Impact Networking, we take a deep dive into assessing the processes of a business so we can understand how to best implement and configure the right tools for your needs at a fixed price.
When you work with an MSP for ERP implementation, make sure that they have a clear understanding of what you want and present you with the right tools for the job. Be wary of MSPs who offer solutions from only a limited amount of vendors, as it suggests their vetting process for solutions may not be comprehensive, and what they offer might not be adequate for your needs.
There are MSPs who offer off-the-shelf solutions, but we believe the approach we take of providing a customized solution with a fixed monthly fee that covers service too is the most effective method for tech implementation and management.
That way the client knows exactly what they’re getting, doesn’t miss out on anything they need, and doesn’t have to contend with hidden costs or additional hours for future implementations or servicing.
This is the approach that’s worked for our clients over several years as they transform the digital capabilities of their businesses.
A Word on Custom App Development
We’ve spoken a lot today about ERPs, but we should drop a quick word on custom apps.
When we talk about turnkey solutions falling short of a specific need, it’s often a custom software solution that can step in to pick up the slack and improve a process.
These solutions are common for most businesses, whether it’s in the office or on the warehouse floor.
Of course, the biggest consideration organizations have to make regarding software development is the length of time it takes to develop and the cost, neither of which are particularly appealing to an SMB.
Low-code is a type of software development which utilizes a visual interface (hence “low” code; as well as “no” code platforms), allowing users to essentially drag and drop widgets to create apps.
The low-code development market was valued at $5.6 billion in 2018, and is expected to reach $52.3 billion by 2024
Low-code allows businesses to make apps and tools for virtually any process imaginable, while development time and costs are significantly reduced.
In the context of turnkey solutions, low-code is a very useful tool because it is increasingly allowing small and midsize businesses the flexibility to design their own apps and integrate them into off-the-shelf ERPs with a lot more ease than traditional means for software development.
Related Webinar: Simplify Digital Transformation Initiatives with Low Code
Pros and Cons of Turnkey Solutions
Turnkey solutions have advantages and disadvantages for growing SMBs.
- Lower costs
- Reduced implementation time
- Off-the-shelf uniformity
- Practicality for smaller businesses
- Higher long-term costs
- Paying for more than what’s needed
- Loss of competitive edge
- Insufficient capabilities and lack of customization
Choosing Between Turnkey Solutions vs. Custom Built
Turnkey solutions are appropriate for most businesses, especially those who are just starting out on their digital transformation journeys.
It’s important that SMBs have a clear understanding of what digital tools and systems they require for their unique needs so that their strategies don’t fall short.
Organizations should understand that for many applications, it’s not an either/or situation. So long as integration of any future custom solutions is a viable option, there’s no reason you can’t have a perfectly streamlined system consisting of both.
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