Is ERP a Dinosaur? (Sep 12, 2013)

Enterprise Resource Planning (ERP) software has served companies well for storing and retrieving data but has built-in limitations. Do these limitations make it a dinosaur? For instance, ERP:

  • Is not designed for operational and business analytics. It is, therefore, a poor planning and execution tool.
  • Has inflexible predefined workflows. Users hate ERP systems due to their rigidity.
  • Does not facilitate collaboration and perpetuates data silos. Critical facts are hidden from people who need them.
  • Is a top-down push strategy out of sync with modern pull production techniques.
  • Implementations are often customized beyond plain vanilla designs. This adds complexity and increases costs.

How Does ERP Differentiate Your Business?

ERP sits on a mountain of static data. Where is the rich context for business processes? Where is the live actionable business insight? ERP is simply not designed to provide holistic and detailed visibility into specific drivers of current and future performance. ERP is not a differentiator! There is no competitive advantage to having an ERP. Although necessary, it does not set the organization apart from the pack.

Questions for ERP-Centric Organizations

  • If your competitors are also using ERP, how do you enhance your competitive advantage?
  • How do you drive continuous improvement of business processes supported by ERP?
  • How do you automate and mistake proof a business process that spans ERP and other information including manual steps, spreadsheets, and human knowledge?
  • Are you drowning in data from ERP and other systems but starving for real-time business insight to increase effectiveness and reduce risk?

Success with ERP has to be about improving end-to-end business performance. It is not just about correctly functioning ERP software. This means that processes that span ERP and other information need to be understood in total and managed to realize true performance improvement. Operational processes are simply too complex and fluid to live in ERP systems. Enterprises should focus on leveraging the data by bringing it forward into a business process and customer centric approach. Such an approach must be easily reconfigurable without customization while maintaining complete end-to-end process integration to satisfy all operational and business stakeholders.

Adam Garfein and Anil Menawat






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