Project Management Institute

ERP for the masses

>> ERP FOR THE MASSES

New takes on enterprise resource planning solutions work for organizations of all sizes.

For years, enterprise resource planning (ERP) tools went hand-in-hand with large organizations. After all, achieving ROI meant having a dedicated IT staff, which made deployment both an extensive and expensive exercise. The environment is evolving significantly, though, opening up ERP software to small and medium-sized businesses.

“It is an exciting time for anyone looking to embrace, expand or change vendors within the ERP space,” says Cindy Jutras, principal with Mint Jutras, a research-based consulting firm in Windham, New Hampshire, USA. “The price point of entry is significantly lower, and today's technology and flexible deployment options allow vendors to provide a different level of support without the need for vast IT staff in the background.”

One ERP tool that shows great promise is SaaS (software as a service). It only accounts for 2 percent of the ERP market now, according to Forrester research's The State of ERP in 2011: Customers Have More Options in Spite of Market Consolidation report. But SaaS is expected to grow 21 percent annually through 2015.

“There is no to need to suffer along with a solution that does not meet your needs— even if that means dumping a legacy system. No software should limit your ability to function. New technology and aspects have made it worth the effort to take the leap,” Ms. Jutras says.

As ERP continues to mature, there's an intensified focus at the vendor level on supporting the rapidly growing mobile environment.

By enabling access to enterprise data through mobile devices, traveling project professionals are alerted to problems and can take action immediately.

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The lines between ERP and other applications continue to blur, she adds.

“The footprint of an ERP solution has been steadily expanding over the past decade. For more and more companies, the ERP solution now serves as the single interface for a number of different solutions, such as customer relationship and human capital management.”

Below are a few key actions to take before choosing an ERP solution.

  • Look back. Organizations should learn from past ERP experiences, as hindsight can help shape future strategy. Even if you haven't used ERP tools before, don't succumb to pressure to rush the decision-making process. This step should help identify disconnects between business processes and ERP apps.
  • Look within. Guide any ERP strategy by objectively assessing the current environment, including vendor commitments, module deployments and the existing system's ability to meet current needs. “If you currently have a foundation of on-premises apps, determine if there are any cracks in that foundation that alternative best-of-breed components could fill,” the Forrester report states. “Pinpoint highly customized or homegrown components that won't be sustainable as your business evolves. Consider replacing these components with packaged components, possibly supplied by specialized providers.”
  • Look ahead. What does your organization hope to accomplish with an ERP system? The three most common goals when implementing new ERP systems are realizing internal efficiencies, saving on costs and enabling growth, according to a recent Mint Jutras survey. To achieve these goals, project professionals must first understand where the organization is headed and what role—positive or negative—an ERP deployment could have on achieving strategic goals. Considering how many software makers are being acquired, it's crucial to understand the “what-if's” when benchmarking a current vendor against other players. For example, is your current vendor a known acquisition target? What would an acquisition or merger mean to your organization?

>SELECTIVE SPOTLIGHT

SAP Based on revenue, SAP dominates in capital-intensive industries and extends its solutions to reach new verticals using its own native code. The company has a stronghold at the enterprise level, in part because of its highly customizable solutions. As SAP‘s open service-oriented Business Suite continues to gain ground, its attractiveness in the small to medium-size enterprise sector will undoubtedly grow.

ORACLE Oracle favors service verticals and extends it capabilities to new verticals by aggressively acquiring smaller vendors. Having grown from a database-centric organization, Oracle offers an identifiable advantage or expertise with data management. Like other leading ERP providers, Oracle offers a SaaS solution within its E-Business Suite to attract a growing number of smaller organizations into the fold.

SAGE As a mid-tier provider, Sage focuses its solutions on flexibility, be it online, on-premise or a mixture of the two. It can support anywhere from two users up to hundreds. Its ERP tools offer a wide range of features and functionality by modules from a huge ecosystem of third-party developers. Sage ERP X3, for instance, offers the flexibility, scalability and functionality needed to manage a competitive business in global markets. It helps an organization comply with the local rules and regulations of many countries and supports multicurrency processing.

SECTOR SPECIALISTS Specialized vendors pepper the marketplace as well—each having a clear focus on key market sectors such as healthcare, not-for-profit and government (Deltek, Blackbaud, Mincom, QAD, Interactive Business Systems and CGI, for example). While specialists offer businesses some distinguishable benefits, including the ability to capitalize on industry expertise (e.g., the ever-changing compliance regulations of the healthcare industry), the acquisition-fueled introduction of larger companies with SaaS offerings should provide smaller organizations with new ERP alternatives.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

DECEMBER 2011 PM NETWORK

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