ERP systems come in all types of varieties, shapes, and sizes, ranging from the massive Tier I packages like SAP and Oracle, to the smaller, more focused nice point solutions like Salesforce and Workday.

In addition, there are a host of industry-focused solutions cropping up every day, along with software as a service (SaaS), open source, and best of breed systems. There are so many options, in fact, that Panorama tracks literally hundreds of ERP software solutions in the industry research and consulting services we provide to our clients.

While there may not necessarily be anything to be afraid of when it comes to navigating through the dizzying array of options, it is easy to bastardize your ERP system to the point where it doesn’t fit with your business strategy, operations, and requirements. Every day we see companies across the world make ill-advised decisions regarding when selecting and implementing their ERP systems. Here are some of the common mistakes we come across:

Using Microsoft Excel and Access as your ERP system. One of the big mistakes organizations make is using disparate spreadsheets, databases, and inefficient manual processes to manage their businesses. Most companies don’t intentionally develop this strategy, but rather they reactively use this as a way to address business growing pains and deficiencies in their existing enterprise software. However, this strategy is a band-aid solution that inevitably leads to the need for a more intentional and well-developed ERP systems strategy. And companies that are already using ERP systems have to watch that employees don’t use this strategy as a way to work around the perceived deficiencies of the system or to address their lack of understanding how the system works. In both cases – for companies that don’t have good systems in place or those that don’t fully understand the capabilities of their business software – spreadsheets and databases can be expensive, error-prone, and inefficient ways to deal with those operational and technical deficiencies.

Quilting together a best of breed patchwork of systems. Without a well-defined, long-term IT and enterprise software strategy, organizations are prone to deploying systems in a piecemeal fashion to address deficiencies as the arise. Companies that head down this slippery slope often struggle with inconsistent systems and processes, data redundancy, integration issues, and business processes that operate in silos. While not every organization is able to find a single, enterprise-wide ERP system to address their varied and complex business needs, some don’t look hard enough and end up taking an inconsistent and fragmented business systems approach that can make operations less efficient and more costly in the long-run.

Relying too heavily on industry best practices, pre-configured solutions and business processes. This is probably the most dangerous and subtle of the three, because so many companies fall into the trap. Countless ERP vendors position their solutions as the end-all-be-all cure to broken business processes by providing industry best practices that can be deployed out of the box simply by installing their software and flipping the switch. Unfortunately, this concept is for the most part marketing and sales hoopla and causes some organizations to use software as a substitute for doing the hard work of defining business processes and their overall operational models. Unfortunately, no software can fix these types of problems, but the false hope of magical fixes from ERP software often leaves organizations with under-performing and under-utilized enterprise solutions and processes.

While these three types of black market ERP systems are common, they can be easily diffused and navigated via a clear enterprise software strategy and realistic expectations about what ERP software can and can’t realistically do for your business.

Originally posted on 360º ERP Blog

Beware of Black Market, Voodoo ERP Systems

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September 8, 2011 7:45 AM

Using Microsoft Excel and Access as your ERP system. One of the big mistakes organizations make is using disparate spreadsheets, databases, and inefficient manual processes to manage their businesses. Most companies don’t intentionally develop this strategy, but rather they reactively use this as a way to address business growing pains and deficiencies in their existing enterprise software. However, this strategy is a band-aid solution that inevitably leads to the need for a more intentional and well-developed ERP systems strategy. And companies that are already using ERP systems have to watch that employees don’t use this strategy as a way to work around the perceived deficiencies of the system or to address their lack of understanding how the system works. In both cases – for companies that don’t have good systems in place or those that don’t fully understand the capabilities of their business software – spreadsheets and databases can be expensive, error-prone, and inefficient ways to deal with those operational and technical deficiencies.

Quilting together a best of breed patchwork of systems. Without a well-defined, long-term IT and enterprise software strategy, organizations are prone to deploying systems in a piecemeal fashion to address deficiencies as the arise. Companies that head down this slippery slope often struggle with inconsistent systems and processes, data redundancy, integration issues, and business processes that operate in silos. While not every organization is able to find a single, enterprise-wide ERP system to address their varied and complex business needs, some don’t look hard enough and end up taking an inconsistent and fragmented business systems approach that can make operations less efficient and more costly in the long-run.

Relying too heavily on industry best practices, pre-configured solutions and business processes. This is probably the most dangerous and subtle of the three, because so many companies fall into the trap. Countless ERP vendors position their solutions as the end-all-be-all cure to broken business processes by providing industry best practices that can be deployed out of the box simply by installing their software and flipping the switch. Unfortunately, this concept is for the most part marketing and sales hoopla and causes some organizations to use software as a substitute for doing the hard work of defining business processes and their overall operational models. Unfortunately, no software can fix these types of problems, but the false hope of magical fixes from ERP software often leaves organizations with under-performing and under-utilized enterprise solutions and processes.

Blogger Profile: Eric Kimberling

With over fifteen years of consulting experience, Eric Kimberling has a wide range of professional expertise in companies ranging from the SMB market to large corporations. Eric’s background includes extensive ERP software selection, ERP organizational change, and ERP implementation project management experience.

Twitter: http://twitter.com/erickimberling
Linkedin: http://www.linkedin.com/in/erickimberling

Posted by Sue Ansell at September 8, 2011 7:45 AM

Categories: Enterprise Resource Planning (ERP)

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