A colleague recently asked me, is an ERP vendor solution still the holy grail of systems? Or are there alternatives? The short answer is; “there are now alternatives to needing to take on an ERP solution’’, of which the most obvious and immediate benefit is reduced cost. The second benefit being time.
Anyone who’s ever hired a technical contractor knows that ERP companies charge by the day, and at rates that make your eyes water, so when doing a system implementation, time equals money. A traditional ERP implementation would usually require a dedicated team of five or more consultants working with internal stakeholders to help build a fit for purpose system. And that’s just for one or two modules, such as employee payroll and human resource management. A system catering to every department across a large-scale organisation would require much greater resources. If we’re talking a full-scale implementation offering a single source of truth you could be looking at millions of dollars. Not to mention the drain on internal resources, licensing costs, ongoing maintenance and user training.
And at the end of this long and expensive process, what were businesses left with? A system that was good at a lot of things, but great at few! I’m not knocking traditional ERP’s, but anyone who’s used one will probably have found themselves wishing the system was more customisable, or more intuitive to their specific job needs, only to be told more often than not that it can’t achieve the desired functionality. Which in a lot of ways makes sense.
Having one system capable of doing everything in a way that perfectly meets the needs and expectations of every department in an organisation is contradictory. If you think about it, how can ERP produce the world’s best product in recruitment whilst at the same time keep up to date with payroll? They are so different. You need smart recruitment people to keep up to date with talent acquisition (which is moving fast!), yet you need cost driven accounting and compliance type of professionals to keep producing a best in class payroll product. Interestingly, ERP does neither of these functions all that well as they don’t really fit into traditional supply chain and finance areas.
Since the introduction of cloud technology, implementation durations have dropped to on average a third of what they used to be. Straight away that’s time and money. But what’s most exciting in the advancement of cloud technology is the opportunity it brings for integration – removing the need for an all in one subpar system, and opening the door for organisations to have multiple superior systems that cater to specific department needs, and speak to each other. Or what is commonly referred to as a ‘best in breed’ approach.
So, when asking yourself what your business needs, consider whether you want a subpar traditional system offering ‘one source of truth’, or whether you want a superior integrated network of systems coming together, offering greater visibility, accessibility, and an interface that is user friendly and resemblant of the modern era.