• Unclear understanding of the rationale behind their current ERP solution. Very few executives can articulate the business rationale behind the selection of their companies’ current ERP packages or the process designs that went into their configuration. They also often lack the strong combination of business process and package expertise required to determine how to adapt the software to their companies’ evolving business model.
Together, those three dynamics often lead to a decision to replace the existing software even when a much lower-risk, lower-cost solution can deliver the desired business benefits.
A Better Approach
In the information-technology world, the term “legacy” typically carries a negative connotation. But legacy systems usually represent years of development and investment and provide mission-critical capabilities upon which the business has come to rely.
In fact, most user complaints about these legacy ERP systems are not about whether the system delivers the required business functionality. Instead the complaints center on the perceived failure of ancillary features, like inadequate tools to access and analyze data, insufficient reporting capability and poorly designed user interfaces.
For example, a mid-sized manufacturer that was running a legacy ERP system had come to the conclusion that the system could not provide the insight to plant productivity required to effectively run the business. That ERP system had been installed for a number of years and had been enhanced to meet some very specific business requirements that a new ERP package would not likely support.
In fact, the root cause of the problem was the configuration of the plant-floor scheduling module and the ability to correctly combine the actual production data from the manufacturing-execution system with the schedule data.
By changing the ERP configuration and implementing a data-analytics solution to combine the plan and execution data to provide the business with the metrics required to effectively manage the business, the company was able to address the business issue within its existing ERP system.
In cases like this, targeted investments to resolve specific business issues are less risky, less expensive and deliver bottom-line value more quickly than entire system replacements. In particular, companies can derive significant value through targeted point solutions aimed at optimizing specific planning functions and providing business-decision support.
Consider the use of specific point solutions. Most ERP packages today are very good at processing transactions (customer orders, purchase orders, manufacturing orders, accounting entries, field service orders, shipments, returns etc.).