ERP Myths: Quick and Easy Business Improvement

One of the more difficult ERP myths about an implementation is the expectation that ERP improvement will resolve all of the problems of the old software while simultaneously making all business transactions more efficient, more intuitive, and more accurate. The fact is, most ERP systems are not equally strong in all functional areas, and, it is entirely possible that the reason the C-level signed off on ERP has nothing to do with operational effectiveness.

For instance, assume that the strategic urgency for an ERP system is to move an accumulation of acquisitions to a common operational and reporting platform. In that case, the C-level may or may not be willing to pay a premium for “best of breed” software, but rather, to accept adequate operational effectiveness. The criteria may be established as “the lowest total-cost-of-ownership package that provides a viable solution.”

Whitewashing the Weaknesses

The notion that all phases of business will get better through ERP improvement is fatally flawed for two reasons.

First, ERP systems are typically stronger in some areas than others, in terms of ease of use, depth of functionality, maintenance, and philosophical basis. It can be difficult for developers to maintain a realistic sense for “ease of use”; what seems easy to a college graduate may not make as much sense to a production floor employee. The depth of functionality defines the amount of creative freedom an organization has at designing their business solution. The relative ease or difficulty with maintenance – data, order management, error resolution – of an ERP system becomes exponentially more critical because –due to integration - any transactional or information errors are immediately transported to all other functional areas to complicate their lives as well. The philosophical basis of an ERP system refers to the most repeated answer to the question “why did they do it that way?”, and it must be understood. One software package may be philosophically oriented toward rigid financial control; another toward smooth and flexible manufacturing operations.

A second reason why all of the new software might not be better than all of the old software is that certain functional areas may consistently recruit or hire better IT talent over time. As a result, some legacy systems being replaced are quite sophisticated, and have been singularly focused on the organization’s specific business processes. ERP systems on the other hand, tend to be more generic.

The myth that ERP will be a cure-all for everything is partly due to the original hype in selling the value of an ERP project, and partly from our personal experiences with PC software. Selling the value of an ERP package typically means whitewashing the weaknesses, so that people get a very one sided view of the package’s strength. Our experience with PC software packages is that each new version contains all of the previous features, and a little bit more. End users normally expect ERP improvement of business processes – everything they had before, and a little bit more.

That’s why there’s a misconception.