The Blog

  • November 17, 2011
  • ERP Redux

    Yesterday’s post, “Beyond Legacy ERP” drew a lot of comments most of which went to my email rather than the comments section on the blog.  As I wrote at the time, I am not an ERP expert, but I am learning.  What’s interesting to me is that, beginning with the original post that I was quoting by Dave Yarnold, CEO of ServiceMax, the mention of ERP seems to elicit a collective howl of angst from many executives.

    Apparently ERP is the software type that we love to hate.  This does not surprise me.  I can recall a time about ten years ago when CRM was in a similar condition.  Back then implementations routinely ran over budget and over time and the results were spotty.  Some people claimed phenomenal results from using CRM and others pronounced it electronic snake oil.

    Like CRM of that era, ERP is something in need of a facelift.  We may not be capable of imagining running a modern business of any size or complexity without it but at the same time legacy ERP turns us all into Pip in “Oliver Twist” “Please sir, I want some more.” And we loath the feeling of dependency it engenders.  As Yarnold asserts, it’s not flexible enough, it costs too much and it robs us of our creativity and too often the ability to go to market with a hot new idea.

    What to do?

    Let’s change literary centuries and remember the “Wizard of Oz” (not my favorite by a long shot, but I take my metaphors where I find them) and little Dorothy and her ruby slippers.  The trick to getting home is right there staring up at you if you only have the courage to see and act.  Fixing ERP will, ironically, take the same solutions that fixed CRM back in the day.  They are customer awareness, a bit of vision and cloud computing.

    Back in the Siebel era, I did some research and discovered that half the companies who bought Siebel didn’t know why they’d bought it and many didn’t even interview multiple vendors.  Siebel was the leader and Siebel is what they bought.  When they ran into trouble those companies blamed the software and the vendor but not themselves for being so cavalier about the purchase.

    A little introspection showed some that they were doing better with CRM than they thought.  Others needed to discover their business needs and adjust the implementation before seeing daylight.  But the biggest fix came in the form of SaaS and the biggest SaaS provider was  Salesforce started with a clean slate, delivered few options and had a ridiculously low cost curve.  You could afford to buy the stuff and trash it if it didn’t meet your need.  Few people did that.  Many just grew up with the company and its products taking on features and functions as they became available.

    It worked very well and the iterative rollout enabled customers to grow from a simple SFA implementation to an increasingly sophisticated social footprint today.

    The same kind of solution awaits ERP users in the cloud.  Compared to CRM, ERP has stayed too long in the legacy enterprise computing model so there’s some catch-up to be done.  And of course since ERP is fundamentally different than CRM, security issues must be faced and dealt with, so face them.  These issues are not hard and there are new technologies available to help if enterprises can simply get off the dime.

    This will probably mean severing ties with suppliers of long duration for some parties but for many who cannot accomplish a rip and replace strategy there are other options, most notably hybrid or two tier solutions that vendors as diverse as Microsoft, Workday, Zuora and NetSuite are promoting.

    In different ways each offers the possibility of deploying more flexible cloud based solutions to at least mitigate the necessary interactions with the legacy system.  Many of the available solutions do only a small but critical part of the whole ERP solution.  But as with Zuora, which provides a solution for subscription billing and payments, the part can be the thing that makes an intolerable situation much better.

    Some form of hybridization plus direct replacement appears to be afoot in the ERP industry.  Good solutions are out there and many of the vendors I have spoken with have good plans and solid pipelines bringing new solutions to market.

    ERP will never be as easy s CRM but it doesn’t have to be as hard as it has become.  If I am right then we’re at the beginning of an ERP disruption that will change business as much as CRM has and that will be a good thing.

    Published: 12 years ago

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