I was talking to someone the other day.  Someone who is very smart.  Someone who I respect a great deal.  Someone who is an upper level executive in her field (finance).

We were talking about systems.  You know, ERP systems.  And she was talking about the problems associated with ERP systems in a multinational corporation that has disparate divisions and products.  (No, it’s not the mob.  Come on, people.  Almost though.)

And the solution that really made sense to her was a single, world-wide system.  I’ll let you guess which of the two it was.

Yes, she agreed, the installation cost is large, but it’s a one-time charge.  Once you peel off the bandage you are done with it.

And yes, it doesn’t accommodate differences in the way different sites do business and it may require more effort from employees who are used to a localized ERP that was tuned for their convenience.

But it allows companies the fantasy of thinking that they have the most advanced and far-reaching ERP package available.  And it does generally give a common GL system with which to do financial analysis.  And common vendor data to facilitate bulk purchasing.  And stuff like that.

I smiled a little because I know that the roots of this advanced system and most of its internals are older than she is.  And because I know there are many ways in which to get a common GL or vendor data base or any number of other things.  But mostly I smiled because there is no way to explain that to someone who has not been through a system install, and when I say through it, I mean ‘up to their neck in getting it done’ through it.

Big systems are the rage today with their big price tag and their promise of almost unlimited flexibility.  My perspective, after having participated in the switch for three of my customers, is much different.  It’s going to take significantly longer to do the install than you imagine.  It’s going to cost significantly more to do it than you thought.  It’s going to be harder for the users to do their jobs because the screens are not optimized for the way you do business.  And you are either going to have to give up functionality or go through the arduous process of modifying the package to do what you want.  And when you are done, you are probably done, because it will be too expensive, time consuming, and dangerous to try to put in an upgrade.

But if you say those things out loud, everyone looks at you like you are crazy, out of touch with the times, unable to see the benefits.  And they are right.  I can’t see the benefits.  The jury’s still out on the other two.

Tags: Back office, ERP, Supply Chain