ERP systems – designed to fail?
75% Never Take Off Successfully
Gartner, a leading technology research and advisory firm, is pretty sure your ERP system strategy will fail. In fact, Gartner reports that an astonishing 75% of ERP projects do already!
The reason? IMHO, ERP hasn’t evolved enough. Anyone whose company purchased a legacy, on-premise solution in the last ten years will probably attest to the pains of implementing and using these systems. Yes, they’re complex and capable, but like your brain, you’re probably not using of nearly enough of the available potential. ERP was either before its time in conception, or still a poor-behaving toddler in its behavior.
An article in the UK’s The Register cites the current state of cloud ERP as apocalyptic (according to Gartner):
Gartner has projected a near 100 per cent fail rate for cloud ERP projects by 2018.
Ninety per cent of those rolling out what the mega-analyst has defined as “post-modern ERP” will succumb to the traditional ERP headaches of higher costs, greater complexity and failed integration by 2018.
Their Achilles Heel will be lack of an application integration strategy and related skills.
Gartner defined “post-modern ERP” as systems that are federated and loosely coupled and no longer from a single, monolithic provider – such as Oracle or SAP. This is what defined the big ERP rollout wave during the 1990s that, presumably, Gartner defines as the “modern” ERP age.
Eighty per cent of those will lack the capability to successfully deliver on their postmodern ERP strategy, Gartner said on Tuesday.
Carol Hardcastle, Gartner research vice president, said in a statement: “This new environment promises more business agility, but only if the increased complexity is recognised and addressed. Twenty five or more years after ERP solutions entered the applications market, many ERP projects are still compromised in time, cost and more insidiously in business outcomes.”
The Register says Gartner blames both sides of the coin: executives rushing to early adoption of cloud products for trendy devices (against the advice of the stolid IT types) AND vendors, who are “greedy” with more interest in the sale than the outcome.
How to Beat the Odds
This may seem like a contrary position from a Sage X3 reseller and professional services provider – BUT we can counsel how to make your strategy sound. You just need to go in with as much information and commitment as any other major business strategy warrants.
Be Slow to Decide
It’s no secret that the decision time to purchase an ERP system can easily run 12-24 months. Actually, that’s good. That means all the stakeholders have time to fully vet a system that affects the entire infrastructure of the company. Fully develop the scope of the project and communicate business requirements WITH your vendor.
There’s no “magic” formula to create a budget for a ratio of product-to-professional-services (installation, implementation, data migration, training, etc.) expenses —but be aware that professional services WILL EXCEED the actual software investment. In fact, the conditions for launch and ‘go live’ could easily triple it (and will probably take at least a year to implement)! So if your software estimate is quoted at $100k – budget $200-300k for the full investment.
Plan the Integrations Carefully
It’s no coincidence that Apple devices work with Apple Operating systems, software, apps, even charging devices – it makes cross device platforms perform seamlessly regardless of the hosting device. Think of your ERP system that way.
Will you need additional software for business intelligence / cloud sharing / financial / customer management? Can you keep these additions in the software publisher “family?”
Also, what systems will your ERP software need to share data with? Is there bi-lateral communication, eliminating dual entries or data uploading? Do your platforms truly connect – or is there a clunky API doing the patching? Do your homework!
Think BHAG (Big Hairy Audacious Goal)
What do you need to take your company to the level you’ve dreamed of? Do you need to modernize your total IT infrastructure?
If you’re replacing or purchasing a new ERP solution, is it time to also add a CRM or HRMS system that will grow along with your company’s goals? Can you afford to unite Operations, HR, and Sales/Marketing in a compatible, universal software solution suite (can you afford NOT to)?
Lastly, consider the “maturity” of the product offerings. Like Gartner’s “post-modern” ERP example, is the software publisher stable, yet innovative? We think the Sage X3 solution is!
Sage X3 – “Not” ERP!
Sage has calculatedly and dramatically dropped the “ERP” from the Sage X3 product name last year (we wrote about it here). In a truncated explanation, Sage wanted to distance itself from the negative connotations associated with ERP, and rightly so. Sage is not targeting the Fortune 50 companies that need software the size of Central Park. The vision is to corner the mid-market sized company that wants agility, speed, intuitiveness, and a reasonable price point.
The New Kid on the Block
Sage X3 is an “enterprise business management software suite” that could be considered the post-post-modern ERP. Newer to the American market, X3 has been extremely well received in Europe (the dev team is in Ireland). Considering that most legacy systems were written 15-20 years ago, X3 is agile with a super-friendly GUI (graphical user interface) and UX (user experience).
Sage X3 Is:
- Web-based and browser agnostic
- On-premise and as a Service
- Deployable in FOUR MONTHS
- Customizable and easy to learn
- Multi-currency, multi-language
- Interfaces seamlessly with CRM, WMS, and e-commerce