So, why are you thinking about getting rid of your existing ERP system? If the answer is simply your need for some of these newer and more advanced applications, you have not thought through your options - you can reach these objectives with or without replacing your existing system.
If the answers have to do with technology, you need to look deeper. A CIO recently told me that he was going to replace his old ERP system because, "My users think it is old and ugly." Unhappy users are always an issue. How much you weigh this issue versus the cost, time and disruption issues is part of the trade-offs involved in making this decision.
Maybe the existing technology itself is old and ugly. If the underlying hardware and systems software is creating frequent disruptions or have become very expensive to maintain, you have another issue to trade-off. But if the existing hardware or systems software puts you at risk of a lengthy or permanent disruption of service, you have no choice but to go to a replacement system.
Why would you add the new function around your existing ERP system? If you add the function you require on to the existing system, you should get the benefits you seek faster. You can proceed directly to implementing the functions that will deliver the ROI. That project will have to include some consideration of integration of the new function to the existing ERP system, but the overall schedule is typically shorter.
In many cases, the functionality provided by a specialist or best of breed vendor will be better than that offered by many integrated vendors. As the above-mentioned article discusses, the future of ERP means sharper vertical focus. For many industries or verticals, significant operational advantage can be gained by going with a vendor who focuses in their industry. The best of these focused vendors typically limit their target market to a few, closely related industries. Note, industry focus means application function, not industry specific brochures.
But what is the true cost of going the best of breed route? Integration is one of the answers. It is not free. It is another issue that must be traded off. The reality is that the integrated vendor should have better integration and they will bear the cost of maintaining that integration. This is almost always true if the vendor wrote all the pieces themselves. If they acquired some or all of the pieces, this should be true, but you should test the vendor's commitments in this area. If the components come from a "strategic partnership", it means that as long as the relationship makes money for both parties and they do not evolve into a competitive situation, the integration will continue to exist.
Part of the integration trade-off has to do with the quality of the integration. A single vendor, integrated solution should have better integration. The question for the best of breed option is, "Can these products be integrated in a practical way." Practical does not mean best, it means acceptable given all the other trade-offs that will always have to be made. You will have to live with extra code, the integration code that needs maintenance. You will have to live with duplicate files that may get out of synch. You will be the one who deals with the finger pointing between the two vendors when one or both of the two systems are not working correctly. You will have to deal with the new release cycles that will prove to be always perfectly out of synch.
The selection of an add-on product must include the ability of the product to integrate with the existing systems. Was it built to be integrated? What integration technology does it support? What will be the cost and risk of maintaining the integration?
If the answers have to do with technology, you need to look deeper. A CIO recently told me that he was going to replace his old ERP system because, "My users think it is old and ugly." Unhappy users are always an issue. How much you weigh this issue versus the cost, time and disruption issues is part of the trade-offs involved in making this decision.
Maybe the existing technology itself is old and ugly. If the underlying hardware and systems software is creating frequent disruptions or have become very expensive to maintain, you have another issue to trade-off. But if the existing hardware or systems software puts you at risk of a lengthy or permanent disruption of service, you have no choice but to go to a replacement system.
Why would you add the new function around your existing ERP system? If you add the function you require on to the existing system, you should get the benefits you seek faster. You can proceed directly to implementing the functions that will deliver the ROI. That project will have to include some consideration of integration of the new function to the existing ERP system, but the overall schedule is typically shorter.
In many cases, the functionality provided by a specialist or best of breed vendor will be better than that offered by many integrated vendors. As the above-mentioned article discusses, the future of ERP means sharper vertical focus. For many industries or verticals, significant operational advantage can be gained by going with a vendor who focuses in their industry. The best of these focused vendors typically limit their target market to a few, closely related industries. Note, industry focus means application function, not industry specific brochures.
But what is the true cost of going the best of breed route? Integration is one of the answers. It is not free. It is another issue that must be traded off. The reality is that the integrated vendor should have better integration and they will bear the cost of maintaining that integration. This is almost always true if the vendor wrote all the pieces themselves. If they acquired some or all of the pieces, this should be true, but you should test the vendor's commitments in this area. If the components come from a "strategic partnership", it means that as long as the relationship makes money for both parties and they do not evolve into a competitive situation, the integration will continue to exist.
Part of the integration trade-off has to do with the quality of the integration. A single vendor, integrated solution should have better integration. The question for the best of breed option is, "Can these products be integrated in a practical way." Practical does not mean best, it means acceptable given all the other trade-offs that will always have to be made. You will have to live with extra code, the integration code that needs maintenance. You will have to live with duplicate files that may get out of synch. You will be the one who deals with the finger pointing between the two vendors when one or both of the two systems are not working correctly. You will have to deal with the new release cycles that will prove to be always perfectly out of synch.
The selection of an add-on product must include the ability of the product to integrate with the existing systems. Was it built to be integrated? What integration technology does it support? What will be the cost and risk of maintaining the integration?
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