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The IKEA model for software

There is a company who took modularization to a whole new level starting back in the 1950s, that company is the Swedish IKEA Group of companies.  Their business is to provide well-designed, functional furnishing, at prices low enough for many people to enjoy.  With stores in 44 countries around the globe they have become accepted as the affordable, assemble yourself, alternative for millions of people.

IKEA does this by designing products that take little to no time to assemble thereby reducing costs all along their supply chain.  With optimized packaging, production and shipping costs drop, inventory takes up less space and consumers feel they have received a deal.  As IKEA continues to broaden the suite of products more people enjoy affordable pieces to bring into their homes.  In fact, home owners often are able to purchase more for their money and build out more of their rooms as a result of this optimized approach.

So, can we do the same with software?  Yes we can, and many are realizing the results of that optimization.  Just like with IKEA, SAP and its’ partners have built consumable software packages that are rapidly implemented with basic-to-advanced functions.  Just like IKEA, companies can add these pieces to their environment in a modular approach providing more capabilities for less cost.  They can also purchase more modular software as a result realizing the same benefits of piecing together smaller packages to get more functionality.

For utility companies, these components range from basic analysis of spending to predicting loads, from mobilizing the workforce to providing consumers with instant access to their bills via smart phones. Each one of these, if built in the traditional way, would cost more than several of them combined together.  The reason is that these packages start with a predefined scope, so it reduces time spent gathering requirements and customizing as now you are validating and extending the scope allowing for rapid implementations and getting it in the hands of your users faster. 

Just like IKEA, SAP and their partners continue to package software to address new technology as well as standard functionality for customers to receive a quicker return on an investment.  Many of these can be found at Rapid Deployment Software | SAP.

By the way, did you know that the IKEA name is made up of the initials of the founder, Ingvar Kamprad and the first letters of the farm, Elmtaryd and village Agunnaryd in southern Sweden where he grew up?  Now, see if you can find the village in Sweden!

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