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In 2024, we have seen their fair share of complex and challenging projects which have ‘gone South’. Turning them around and putting them back on the right track is frequently the reason why we’re called in. I’d like to share with you some of the lessons we’ve learned, to assist you in avoiding the predicted IT Armageddon. First off, we’ll look at what postmodern ERPs are. Then, we’ll see what can be done during implementation to mitigate the risk of an upcoming catastrophe. Lastly, I’ll show how the right partner can help your organization avoid a doomsday disaster.
Postmodern ERPs
Gartner defines the postmodern ERP as: “a technology strategy that automates and links administrative and operational business capabilities (such as finance, HR, purchasing, manufacturing and distribution) with appropriate levels of integration that balance the benefits of vendor-delivered integration against business flexibility and agility.”
Siloed applications
As it is one of the keys to postmodern ERPs is the integration of applications provided by diverse vendors, moving away from “monolith mega-suites”. By contrast, best-of-breed applications tend to only support integration with their tools. For instance, some cloud applications deliver a long list of interfaces (APIs) to interact with their solution but are limited to read-only interactions. This means that the application will most likely not be able to be integrated into new automated business processes.
To help break your corporate silos, you need to avoid recreating them with software. This requires a shift in the mindset from “module” software (CRM, Finance, Procurement), to a process platform focusing on end-to-end business scenarios. For instance:
- Replace “Procurement” with “Procure to Pay”
- Replace “Asset Management” with “Acquire to Retire”
- Replace “CAD” with “Idea to Offering”
- Replace “Analytics” with “Record-to-Report”
This will ensure a seamless experience for the end users and simplify your application landscape.
Incomplete scope
The cloud ERP landscape is still heterogeneous. A large number of solutions grew from a specialized scope and expanded into the ERP domain, or from small target customers to larger ones. However, unless a large scope is covered, including Gartner’s main topics: “finance, HR, purchasing, and distribution”, then integration is increasingly complex and hard to maintain.
As an example, if a professional services company uses accounting software as its main system of record and combines it with a time and expenses package, as well as a payroll solution, some key architecture decisions need to be considered:
- Where should employee master data be maintained?
- How to handle errors and corrections of time entries?
- How should workflows and approvals be handled?
Without an out-of-the-box integration, these simple questions could easily give nightmares to the most seasoned IT teams.
Cloud Washing
Software vendors are now expected to have a cloud option. However, some took shortcuts by simply hosting their solutions, providing remote access, and changing their licenses to a subscription model.
This ‘cloud washing’ is far from the postmodern ERP definition we saw earlier. Robust solutions should offer:
- Browser-based solutions (no download)
- Similar user experience across different devices (with responsive design for smaller screens)
- Multi-tenant or elastic options for improved Total Cost of Ownership (TCO)
Postmodern ERPs should have a cloud-first principle with a consistent strategy for back-end and user experience. Ensure you identify such key differentiators when selecting your solution.
Mis-alignment to your corporate strategy
“Good ERP is more than just good software. It involves an institutional commitment to connecting people, processes, and resources”, said James Young. We’ve seen countless software purchase decisions that made sense at the level of cost center manager for a small business unit but were counter-productive to the overall company-wide strategy.
On a recent project, the CIO of a large company told us: “For security and legal reasons, we have a zero-cloud policy”. However, during the subsequent roadmap analysis, we uncovered a slew of critical web applications for CRM, human resources, and reporting, unbeknown to him.
Another mistake is to align your IT strategy with a vendor roadmap. On our last roadmap exercise for a multinational consumer products manufacturing company, our analysis concluded that there wasn’t enough value in the current release of their main software provider and that a better strategy would be to leapfrog this release in 2016 and implement the next major release in 2017, thus reducing the impact of change and improving the chances of value realization.
Go at it alone
As the Gartner report concludes: “It is time that the significant investments enterprises make in ERP solutions reap real benefits. ERP vendors and SIs must raise their game on implementation approaches, renovating and revisiting their implementation methodologies for speed and with greater emphasis on the benefits realization activities.” But let’s face it: simple just ain’t easy! Despite efforts from ERP vendors to facilitate the onboarding of new teams and the standardization of the connectivity of their applications, the integration piece still needs expertise on both applications. Such skills are usually few and far in-between but are critical to the success of your project.
