Search Results for: erp

Executive Summary

ERP systems were introduced with great promises and fanfare, pushed by financially incentivized entities.
Now decades after, the research shows few benefits to ERP, but high costs. And customers are trapped in their ERP.

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 all of the academic research and found that ERP systems have no history of producing an ROI. A major reason is that ERP systems are simply not that advantageous, they impose high maintenance costs, and the implementations of ERP …

… 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 …

Executive Summary

Two-tiered ERP is a specific way of managing multiple ERP systems.
This serves to explain how to apply two tier ERP in real terms.

Introduction
The basic proposal that two-tiered ERP reduces costs can be true. According to our research, the cost savings based on total costs of ownership (TCO) can range from the a slightly negative cost savings (that is a cost increase) to roughly one-fourth of costs when compared to the TCO of providing ERP functionality for users with a 100 percent tier 1 ERP strategy. However, it is not possible to ascribe …

… between the different tiers. As we will see further on in the book, integration between the various ERP tiers is critical to the two tiered ERP method.
The term “two-tiered ERP” has two meanings. The more general definition, which I have taken from Wikipedia, is as follows:
“Two-tier ERP software and hardware lets companies run the equivalent of two ERP systems at once: one at the corporate level and one at the division or subsidiary level. For example, a manufacturing company uses an ERP system to manage across the organization. This company uses independent global or regional distribution …

Executive Summary

ERP has grown into an out of control octopus that has taken over IT.
The implications of such high overhead systems go little covered in IT media.

Introduction
Economics gave us the useful term “externality.” When an entity engages in a behaviour that places costs on other entities for which it does not compensate them, this is referred to as a negative externality. The ERP craze has been primarily an exercise in the perpetuation of a negative externality on the part of ERP vendors and ERP implementation companies on ERP buyers. Given the evidence of poor ERP functionality …

Executive Summary

ERP vendors and consultants propose that there are no alternatives to ERP.
Learn about very realistic ERP alternatives.

Introduction
ERP promoters make a severe misrepresentation in their discussions of ERP by suggesting that there is no alternative to ERP. To think that there is no alternative, one would have to be biased (either financially—they work in or somehow make money from ERP—or nonfinancial—they are used to ERP environments), or they don’t understand the enterprise software market very well. There are plenty of alternatives to ERP. Some of the alternatives call themselves “ERP” because this …

Executive Summary

Because ERP offers mediocre functionality, it distracts from better functionality outside of ERP.
Learn why this leads to so much waste on ERP projects.

Introduction
ERP sets up mediocre functionality at companies and interferes with buying better software that could provide a great deal of value to the business. I will use several examples in this chapter to explain this prevalent feature of ERP software. ERP implementations result in generic functionality being installed. Then, after the ERP system is installed, other applications that provide better functionality are frequently and selectively used to replace ERP. These superior applications must …

… TCO varies based on the delivery method (SaaS or on-premises).
How TCO varies based upon the complexity of the implementation.
The average percentage that one can expect the implementation to cost for any one specific cost item or cost categories such as implementation, license, hardware, or maintenance and support.
ERP combined with 100 percent ERP vendor applications.
ERP combined with 100 percent best-of-breed solutions.
Open source ERP, 100 percent best-of-breed solutions.
No ERP, 100 percent best-of-breed solutions.
The risks of various software categories.

False Assumptions of ERP
The analyses include assumptions often not …

Executive Summary

Two-tiered ERP is sold as a highly beneficial strategy.
Learn how beneficial two-tiered ERP is to customers that follow this advice.

Introduction
Two-tiered ERP systems are a trend in ERP, but there is little research on the impacts of two-tiered ERP strategies and how they differ from what companies are doing anyway with multiple ERP systems. Once again, the marketing is far ahead of the evidence. Remember that a previous concept—service-oriented architecture (SOA), which has now flamed out concerning ERP systems—was also supposed to be a “savior” for ERP. I work …