Wednesday, January 09, 2008

BPM Series: Are all ERPs same?

Eric Kimberling asks this question which is often asked by many a ERP buyer. Especially now that ERP market has consolidated with 3-4 large players dominating the market, and ERP systems having undergone an evolution of about 20 years, have ERPs become commodity?

I do not think every ERP is same. Every ERP has a different history & evolution and hence unique strengths & weaknesses. So Some ERPs have strong Finance module while others are excellent at HR. Certain ERPs are good for discrete manufacturing while others are good for process manufacturing. Some ERPs are better suited for "make to order" while others are suited for "made to stock" industries. Some are good for hospitality industry while others are a must for retail industry. Some due to their flexibility, complexity of implementation & maintenance, and cost of ownership can only be implemented in organizations that are IT mature and large while others due to their ease of implementation and maintenance can even be implemented in small and medium scale organizations. As they say, you require horses for courses, the same goes with ERPs. Not every ERP is suited for any and every organization.

Most of the large global organizations have implemented ERP systems by now. They may have more than one ERP system for multiple functions and multiple locations. Such organizations may ponder and debate on standardising on one ERP. Small and medium enterprises on the other hand are now in the middle of implementing ERP systems. And I am sure if either of them take a view of ERPs as commodities, they are doomed. Every company whether it small or big, has unique set of requirements arising out of the industry it operates in, or the country it operates in (taxes and duties, regulatory documentation) or because of its own product offerings and processes, which could be different from its industry peers. ERPs are foundations of every organization's IT edifice and hence organizations need to take a very thoughtful and cautious view rather than carelessly choosing an ERP system assuming that all ERPs are same.

1 comment:

  1. Anonymous12:13 PM

    The Major ERP Vendors have failed to meet the aspirations of Small and Medium Industries vis a vis cost, performance, flxibility and ease of use. Over and above high costs, SMEs are forced to acquire large servers, highly qualified technical personnel etc.

    The core intent of SMS of optimizing costs is lost the moment they are fooled into going for a oversized, underutilized, misfit ERP.

    Only ERPs like SYS-APPS ( which are focused to the requirements of SMEs can serve them effectively and help them realize their goal of improved efficiency with lower input costs.