Here's our 4rd blog by our guest contributor, Cindy Jutras, a widely recognized expert in analyzing the impact of enterprise applications on business performance. These findings below come from her recent study, 2014 ERP Trends. The entire study is available on demand in a webcast format.
So if you haven’t decided to take the plunge into your first real Enterprise Resource Planning (ERP) adventure, or you are thinking of “making do” even with sub-optimal performance from the one you've got, what is holding you back? Here are the top three reasons (excuses?) I hear:
WE CAN’T AFFORD IT
Consider the potential cost savings. Most ERP solutions pay for themselves within a two to three year time period and Mint Jutras research finds those manufacturers running ERP solutions from Microsoft Dynamics do it even faster.
If capital funds are not available to support the project, talk to the ERP vendor about other licensing and payment options. Many solutions are available in software as a service (SaaS) model that eliminates a hardware purchase and allows you to pay a subscription fee and account for costs as operating expense (OpEx) rather than capital expense (CapEx). Even if SaaS is not for you, special financing and/or subscription pricing models are becoming more common.
WE’RE DIFFERENT, OUR CURRENT SOLUTION IS CUSTOMIZED
Are your needs really different or are you just operating differently because that’s the way you always did things?
Maybe you did things that way because of restrictions imposed by your old system. Many of those restrictions are probably gone with newer, better solutions. And what used to require invasive customization might now be accomplished with configuration and tailoring that carries forward even as you upgrade to new releases.
Maybe it was because of poor skills of certain employees (who may not even work for the company any more). Or maybe you can’t even explain why you do things the way you do.
A good guideline to use: if “being different” doesn’t differentiate you in the market, don’t do it. Use the transition to a new ERP as a catalyst for change. You will probably find it is a change for the better.
WE’RE NOT GOING THROUGH THAT AGAIN!
Your last ERP implementation may not have been the best experience, and you fear history will repeat itself. Perhaps your current implementation didn’t go as smoothly as planned, cost too much or ran over budget, took too long, or never worked properly. While these circumstances produce FUD (fear, uncertainty and doubt), and seem to present a business case for avoiding repeating that experience, in fact these are the exact reasons why you should replace your current solution, for three reasons:
1. It’s not producing the results you need
2. Hopefully you learned from past mistakes (and everyone makes mistakes!)
3. ERP implementations aren’t what they used to be.
I would never encourage anyone to rush through the process. Implementation of ERP takes careful planning and better execution, but the average time to first “go live” continues to shrink while the benefits expand.
Are you “making do” without a real ERP or with one that is not up to the task of optimizing your business performance? Do you think you can do better, but one, two or all three of these “reasons” for not making a move sound familiar? If so, you might want to rethink the question.
About Cindy Jutras
With over 35 years of corporate experience and specific expertise in manufacturing, supply chain, customer service and business performance management, Cindy has spent the past 8 years benchmarking the performance of software solutions in the context of the business benefits of technology. In 2011 Cindy founded Mint Jutras LLC (www.mintjutras.com), specializing in analyzing and communicating the business value enterprise applications bring to the enterprise.