Choosing ERP Systems - how do you find one system to suit them all?
For almost all management making decisions about financial and ERP software, the aim is to have one system that extends to cover as much of the functional foot print as possible. That is the view of John Donagher, Principal Consultant in Lumenia a specialist management consultancy founded in Galway and with a branch office in London. It works with its clients in developing business systems strategy, particularly the selection and implementation of ERP and other enterprise systems.
“You often find in organisations that there are some areas that are better served by best of breed solutions. But we have also seen over the years that smart ERP systems are extending more and more into those vertical or specialist areas, even though ERP is essentially a class of general business management software serving a wide range of industries”, said Donagher.
There is also the significant factor that major ERP vendors tend to work with local and specialist partners, who have very specific domain knowledge and expertise and have developed solutions that enhance the core product. “In Ireland a good example is Microsoft Dynamics, which has earned a substantial market share in the dairy industry,” he said.
“Another aspect of that is that we increasingly see such add-ons bought in by the vendor and added to its standard library of functionality options. Retailing is common, because there are so many varieties of it, or something like Lean Manufacturing which is always set up to fit the specific site. The strength of the vendor means these can be taken on to a new level of enhancement or global application”.
Allowing that specialised, well-proven applications are often excluded from an ERP implementation, Donagher pointed out that a major consideration for most of his clients is to reduce complexity and not to have too many vendors and systems. That is especially true and important where data has to cross between applications. It creates an extra layer of complexity, which is very much what an integrated ERP system always aims to avoid.” All of which suggests, he said, that the business case for change always has to be fully worked out. “Integration by API is very good these days, but it is never a simple plug and play solution, even from the same vendor which has done it before. All vendors offer the means to have their software talk to other systems. But either way there will always be a level of technical effort and cost, which must be factored into the business case as well as the performance benefits it is hoped to achieve”.
This article appeared in the Sunday Business Post - Connected Supplement, February 2015.