Kudos to Cindy Jutras for her study “Real Facts About ERP Implementation”. Her survey showed that two-thirds of respondents graded their ERP implementation as “successful” or “very successful.” The survey found 31% thought their ERP project was at least a partial success, while 2% thought they were “not very successful.” Only one out of 315 thought their ERP deployment was a failure.
ERP needs more positive press. In my upcoming book SAP Nation 3.0, I have several case studies of customers who have implemented S/4HANA “greenfield” and others who have migrated from ECC. The great news – most had modest expectations, did pragmatic implementations and had small doses of big brand SIs. There are other sections on its ByD SME focused product including the fact that “the best compliments they get from customers is that their IT expense around ByD does not grow anywhere as fast as their revenues.” I also have several case studies which talk of their experiences with Plex, Workday and other products.
Having said that, we also need to point out realities in ERP world and the fact that the majority of SAP, Oracle, Infor, Unit4 and other on-prem customer bases are not migrating to their newer products. Several reasons why
Manufacturing, and business, is global
A fundamental tenet of manufacturing is to make things close to demand. With middle classes growing around the world, manufacturing in China, Vietnam, Slovakia, Mexico and other countries is not at all unusual. Even more importantly, these plants get moved around the world at dizzying speed. The U.S., with its strong economy, is seeing lots of manufacturing move back here. All this calls for ERP vendors to globalize and in a hurry. Franck Cohen of SAP told us about a multinational customer who asked him, “We love your public cloud but you have to offer us 189 countries localization out of the box.” Customers got that in on-prem versions – why should they expect less in the cloud?
We are surrounded by automation
Today’s shop floors and warehouses have robotics, wearables, sensors and AR goggles. Our 3PLs have telematics. Our accounts payable can use AI for fraud detection, our expense processing uses receipt image processing. We need UX which works on noisy floors where your hands need to be free from keyboard and mouse. It is amazing how many ERP vendors pretend as if all that only happens on planet Pandora. It’s our reality and it is embarrassing that ERP vendors are not delivering processes which reflect this changing man/machine mix.
We need to emphasize the operational part of ERP
Part of the bad image ERP got in the last wave was customers mostly implemented white collar, HQ type functions. They missed out on the plant, the warehouse, the shipping dock, the R&D lab and the quality control areas. That’s where the high-value payback happens. We run the same risk this time around. We have vendors who have none of this operational functionality but still call themselves ERP vendors. There are other vendors who claim to have extended ERP to insurance, retail, utility or healthcare but have no operational books of record which support claims processing, merchandising, customer billing or clinical functionality for those industries. Let’s call them what they are – “accounting” or “CRM” vendors not ERP or vertical industry vendors.
We keep sending mixed messages
I see vendors justify their moves to next-gen products by telling customers to retire their old customizations. Then they turn around and tell them to use their platforms to write new customizations when that should be delivered as part of their functionality. I see vendors who say “manufacturing should be done on-prem, not in the cloud”. Then they glibly talk about machine learning. How much can machines learn if so much data continues to be squirreled away in customer data centers?
We need to expect more – way more – from SIs and resellers who implement and maintain ERP
As an industry, we have implemented or upgraded ERP software tens of millions of times. It is absurd that we tolerate the failure rates and cost overruns that has become synonymous with ERP. Every aspect of ERP was a reason to gouge – close to 100% gross margins on software, ridiculous MPLS circuit and storage pricing, you name it. Offshore vendors who could show CMM Level 5 continuous improvements suddenly forgot that discipline when it came to ERP support. Much of what is delivered by SIs and outsourcers can and should be automated – see several ideas here
The ERP brand definitely needs polishing. There are plenty of us like Cindy who are willing to step up to emphasize the positive. But part of that needs to be tough love. We have to demand more from ERP vendors and their ecosystems.
(Cross-posted @ Deal Architect)