Why ERP Systems are the McDonald’s of Enterprise Software
Executive Summary
- ERP systems provide mediocre functionality to the masses.
- There is a food chain that functions in a similar way. We cover why ERP is the McDonald’s of enterprise software.
Introduction
ERP systems were aggressively marketed as fixing nearly all the ills that companies faced. In our book The Real Story Behind ERP, we evaluated the academic research. We found that ERP systems the entire research into the ROI of ERP systems since the 1980s could not find a consistent positive ROI. We suspect one reason for this is the functionality in ERP systems is generic and not a good fit for the companies that implement ERP. ERP vendors, consulting firms, IT analysts, and IT media hide this fact from IT decision-makers. You will learn why ERP can be considered McDonald’s or fast food software.
Our References for This Article
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McDonald’s as the Lowest Common Denominator
McDonald’s is an expert at providing inferior quality food and packaging it in a way that creates a mass appeal.
While the nutrition of McDonald’s is horrid, the marketing of McDonald’s’ is very enticing.
McDonald’s markets its low-quality food by appealing to ignorance and short-term thinking, and convenience. People who eat McDonald’s and other fast food frequently normally do not know very much about nutrition. In this way, McDonald’s can be viewed, as other fast food companies, as taking advantage of the lack of nutrition knowledge. This same pattern applies to ERP vendors and their customers.
McDonald’s Versus ERP Systems
As I cover in the book, The Real Story Behind ERP, ERP systems have no history of paying back their investment, but all of the ERP vendors, the ERP consulting firms, and analyst firms that are paid large amounts by ERP vendors (like Gartner, Forrester, and IDG) all agree that you MUST have an ERP system.
ERP is the McDonald’s of enterprise software. Omnipresent, franchised, commodified, and very bad for your health (or, in this case, your company’s health).
Once ERP systems became highly promoted, executives who did not know better would signal that they were also implementing an ERP system.
Can one imagine how often executives told whomever they were talking to that they were modernizing because they were implementing an “ERP system.”
Conclusion
ERP systems are junk software — as McDonald’s is junk food.
ERP vendors got companies to disinvest in their systems — which were custom-designed for their needs. They convinced them to implement their ERP systems instead — and then when the claims they made about being able to meet nearly all requirements “out of the box” (as we cover in the article The Myth of ERP Being 90% Out of the Box) they then baited and switched them, and got these companies to migrate their “legacy” systems into the ERP system as we cover in the article Why SAP Customers Followed SAP’s Advice on Coding in ABAP.
Fast food companies design their food to be addictive. They do this with convenience and food chemistry.
Not to be outdone, ERP vendors and consulting companies had a way of locking in companies to ERP systems once they had agreed to implement ERP systems on the basis of false information, as we cover in the article How ERP System Was a Trojan Horse.