The real bottom line in implementing ERP is just that… the bottom line. How does it impact cost and efficiency? What business benefits does it bring? And is anyone measuring?
by Cindy Jutras, Principal, Mint Jutras
I’ve been “watching” ERP (Enterprise Resource Planning) for more than three decades now. You might even say I’ve been watching it before it even existed, before it emerged on the market, when it was still a twinkle in the eye of software companies. You see, back in the 1970’s most of the software industry looked with disdain on “packaged” software. Everything was pretty much home-grown or custom developed back then. After all, how in the world could you possibly write software that would really meet the needs of a wide range of companies? Back then of course, all companies were “different” and therefore software had to be developed to meet those unique needs. Right? The answer even back then was really, “No, of course not.” Each and every company was not really that different. Every for-profit company took orders, delivered goods or services and paid their bills. Manufacturers bought components or ingredients and made things. Distributors moved goods. Retailers procured, stocked and sold product. Even non-profits needed to balance their books and produce financial statements. All but the very smallest companies had payroll to meet and taxes to pay. Yet business processes were/are not identical from company to company and each had/has their own nuances. Back in the 1970’s god forbid, if a software company dared to question how things were done, or worse, attempt to change policy or procedure. If something had to change, it was definitely the software. And back then, that meant mucking around deep down in the source code. And it was even worse if the file or database structures had to change.
When you look at it from this perspective you realize just how far we have come. Back 30 years ago, data entry clerks (dare I say even key punch operators?) and data processing (the predecessors to IT) departments were the only people who actually “touched” software. The only thing management touched was the mountain of paper produced as output and that paper was green bar, continuous forms that might or might not be “burst” into individual pages. Thirty years might seem like a life-time to those in Generation X, Y or the new iY. But to Baby Boomers who entered the job market during the 1960’s and 1970’s it seems like just yesterday.
ERP has of course evolved from MRP which originally stood for Material Requirements Planning, then expanded to include more than materials and became Manufacturing Resource Planning. Somewhere along the way there was an MRP II, but at this point in history the difference “II” added doesn’t much matter anymore. Then as the footprint of the software grew to encompass other aspects of the business, MRP merged with accounting applications and morphed into ERP. It broke free of the boundaries implied by Material and Manufacturing, to be an enterprise application for all types of industries. Some struggle to define ERP today. I don’t. I define it as an integrated suite of modules that forms the transactional and operational system of record of the business. But the boundaries of ERP have steadily grown to include a broader and deeper footprint, to the point where ERP is not really confined by any boundaries.
Back in the 1970’s, nobody would have conceived how far we could go in the next 30+ years, just as we couldn’t conceive of having the same (or more) processing power clipped to our waistbands as that which used to require raised floor, climate-controlled rooms. So where are we going now? All the rage of course is:
- Mobility: accessing enterprise data from those ubiquitous mobile devices
- Cloud computing: operating ERP in a hosted environment, public or private clouds, buying Software as a Service (SaaS) and connecting traditional on-premise solutions to those in the cloud
- Two-tier ERP strategies: does it make sense for a multi-divisional company to standardize on one ERP, or to have one (or more) operational ERP’s coexisting with a corporate, administrative ERP?
- Mashing up data from ERP with other applications and even external applications like Google Maps, Outlook and anything you can reach through a url.
- Processing huge volumes of data in seconds or even nanoseconds
But the real bottom line in implementing ERP is just that… the bottom line. How does it impact cost and efficiency? What business benefits does it bring? And is anyone measuring?
If you have ERP, you have a chance to weigh in on how important these trends are to you and then see a summary of the results and engage in the discussion. Even if you haven’t invested in ERP yet, jump in. We want to hear about what you are doing now, what’s holding you back and what are your plans? Don’t worry, this exercise is not really a marketing ploy asking for your permission to share your contact info. It’s really just about the research, so don’t be afraid to have your voice heard.
Please click on our Surveylink to participate.