Designing ERP for a business: should we look beyond SAP/Oracle/Microsft Dynamics ??
One of the important parameter of maturity of IT System is the ERP with the Organisation associated with. Therefore it is important for the organisation and IT Department to sit down together and decide a ERP which is meaningful for the business has maximum standard feature to design the business process and easy for the people of the Organisation to adopt.
Business Managers have a tendency to follow the best practices implemented in the same sector and chose the ERP which has been maximum deployed. It is a normal human psychology and a safe behaviour pattern in all parts of life. But it is important also to remember that even in same business sectors two organisations are different and have unique work culture. Working around that and also respecting the uniqueness can actually take the organisaiton to higher levels instead of copying.
While SAP/Oracle etc has got maximum standard best practices but they do not have a magic wand to make the business successful in all circumstances. In my opinion following questions need to be answered before signing off a large ERP vendor contract:
- is my business a standard one and all my business process are matured and needs not change too often?..if the answer is No then SAP/Oracle etc will be a risk.. because they work well for matured standard best practice based business process and changes are also very costly
- am i Ok to spend a large AMC fee for every year and also employ a consultant team either inhouse or outsource. Because 22-25% of License cost is given for AMC and equal amount of consulting charge is needed.
- are my shop floor people are Ok to learn these packages.
- am I sufficiently manned for doing business with ..because SAP/Oracle may require Segregation of Duty practices very strongly and may require separate people to do separate activity
- how big is my data base expected to be and what is necessary server sizing.
- How much Governance is important for my business..if your customers demand a very Straight forward IT Governed ERP then SAP/Oracle etc is best for your business.
- do I have sufficient number of Business Process Owners and also can we create pool of people who can be spared full time for a duration of 6-8 months for stabilization and can I use them for an extended period in addition for hand holding
- How the customer support for the ERP supplier ? and how responsive they will be in case of Critical breakdown of business
- Do we require all modules to be implemented at a given point of time or can I follow a piece meal approach
- How big will be my Master Data size and do I have people to design the strategy
Although I have worked large number of years using and implementing SAP , but I have also designed and implemented many custom ERP for small scale business and hence my thoughts I have put down. Your comments and replies are welcome.