Do You Suffer from (ECS) – ERP Centric Strategy?

Executive Summary

  • Two-tiered ERP is a specific way of managing multiple ERP systems and presented as if it is new.
  • This serves why two-tiered ERP is not new.

Introduction

This was going to be a very different article than the ty’pe I ordinarily write. Today I want to talk about a serious topic. You see there is a silent disease-oriented around enterprise software decision making that goes undiscussed within companies.

The following shocking statistics apply to this disease.

  1. A recent study showed that executive decision makers at 4 out of 5 companies suffer from this mental affliction.
  2. Employees that use systems where executives have this affliction are eight times more likely to report that, for planning and analysis, the applications they use to get their work done.

“Totally suck!”

And

“…yea then at that point I have to export it to a spreadsheet…”

or

“…wait, and then after I download that, then I have to manually make the assignments, and then I…”

At this point, you have probably guessed that I am referring of course to the dreaded ERP-Centric Strategy.

ECS is a disease that affects the mind and its only observable through the subject’s statements, the propensity to overpay consulting companies for customization work, an obsessive use of Excel, and of course by the devastating effects on industrial productivity.

ECS is at epidemic proportions within companies, with many people hiding their symptoms from friends and family for years.

ECS sufferers can often be found looking out windows, saying things like..

“I just want to get more out of our ERP system.”

and

“I know that the ERP system can do it, we just need a little customization. How about just a little code!”  

or

“How hard can it be to create a forecast with our ERP system? The brochure said that it does forecasting right? I mean I thought I remember it said that it did…”

What is at the Heart of ECS?

Clinically, ECS is a form of wishful thinking combined with an oversimplification of how requirements must be met by software. The most foundational underpinnings of ECS are a fundamentally irrational belief in the following ideas.

  1. The ERP system should be emphasized above all other systems because “it’s the biggest.”
  2. The ERP system is the system of record for all data.
  3. ERP functionality should be used — even when it is weak in a particular area.
  4. Integration should be avoided at all costs.

The History of Mistaken Centric Thinking

ECS has many historical precedents. For the longest time, the Earth was considered the center of the known universe. Galileo created a huge stir when he said..

“…No, the Sun is actually the center.”

Telling people that what they think is the center isn’t is a dangerous business. Galileo was almost killed by the Roman Inquisition in 1633 for this observation.

It was later found that Pope Paul V suffered from Earth Centricism (EC), which is an early precursor to what we now call ECS. What this shows is mistakenly thinking that things that are the center that are not, goes back nearly 400 hundred years.(1)

The Effects of ECS

ECS is continuing to affect management and executive decision makers, and it has the following symptoms: 

  1. Thinking that the very limited functionality in ERP systems can meet all the company’s requirements.
  2. Consistently approving new requests for enhancing ERP to build common, high maintenance functionality, that should be fulfilled with applications outside of ERP.
  3. Repeating statements from the 1980s made by ERP sales people.

Those suffering from ECS don’t know that the idea that ERP could meet all or almost all requirements was never true. It simply started out as something that ERP vendor marketing departments made up; that was then promoted to executive decision makers by account executives.

These same ERP vendors who promoted ECS thinking soon abandoned the idea when ERP vendors started to buy other systems that they could also sell. However, those who suffer from ECS never got the memo.

Is There a Cure for ECS?

Fortunately yes, as bleak as ERP-Centric Strategy can seem, there is a cure. However, it’s not in the form of a pill. Executive decision makers can recover from ECS there is not anywhere you can go for treatment. There is no Betty Ford Clinic for ECS….not yet anyway.

ECS can be beaten, but important realities must be acknowledged to put someone on the road to recovery. Some of these are listed below.

  • The Big Tent Concept: ERP is simply a large footprint application that provides some functionality areas under one “roof.” It always needs other systems to do work in specific areas.
  • Getting Real on Spreadsheets and Customization: Spreadsheets and customization are performed when the ERP system cannot meet the business requirements. If customization is written, then the application is not meeting the demand, and one is at that point on par with using an external application.
  • Refocusing on the Objective of Enterprise Software Purchases: The objective to get business value out of the purchased solutions, and these means that applications must compete with one another by this concept.

Offering a Helping Hand for the Afflicted

I have studied ECS for a long time now and having seen the effects up close and personal. At first, I used just to scratch my head, but now I see it’s a real medical condition.

While not a physician, I have still successfully shown CIOs in companies that they can use point solutions to enhance their enterprise software categories, and that they don’t have to feel shameful about not “getting more out of the ERP system.”

I also have a book titled The Real Story Behind ERP: Separating Fact from FictionThis book can help stop ECS in its tracks, and it explains the entire history of ERP marketing, and then what happened in reality, and paradoxically how no one who said all the things that were used to sell ERP felt guilty afterward.

If you know someone who has ECS, send this book to them. I know that together we can beat this disease.

Financial Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

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References

Repair MRP Book

 

MRP System

Repairing your MRP System

What is the State of MRP?

MRP is in a sorry state in many companies. The author routinely goes into companies where many of the important master data parameters are simply not populated. This was not supposed to be the way it is over 40 years into the introduction of MRP systems.

Getting Serious About MRP Improvement

Improving MRP means both looking to systematic ways to manage the values that MRP needs, regardless of the MRP system used. It can also suggest evaluating what system is being used for MRP and how much it is or is not enabling MRP to be efficiently used. Most consulting companies are interested in implementing MRP systems but have shown little interest in tuning MRP systems to work to meet their potential.re

The Most Common Procedure for Supply and Production Planning?

While there are many alternatives to MRP, MRP, along with its outbound sister method DRP, is still the most popular method of performing supply, production planning, and deployment planning. In the experience of the author, almost every company can benefit from an MRP “tune up.” Many of the techniques that the author uses on real projects are explained in this book.

Chapters

  • Chapter 1: Introduction
  • Chapter 2: The Opportunities to Improve MRP
  • Chapter 3: Where Supply Planning Fits Within the Supply Chain
  • Chapter 4: MRP Versus MRP II
  • Chapter 5: MRP Explained
  • Chapter 6: Net Requirements and Pegging in MRP
  • Chapter 7: Where MRP is Applicable
  • Chapter 8: Specific Steps for Improving MRP
  • Chapter 9: Conclusion
  • Appendix A: Calculating MRP

Brightwork Explorer for ERP Parameters

How to Tune ERP Systems

ERP applications require MRP parameters to be optimized externally to the ERP system. Having analyzed many ERP systems, we developed the Brightwork MRP & S&OP Explorer. It is free to access until it sees “serious usage” and is free for students and academics. Click the image to find out more.