What is the Effect of Gartner ERP Analysis on Customers?
Executive Summary
- Gartner has been a major promoter of ERP systems.
- We cover the general impact of Gartner ERP analysis on software buyers.
Introduction
Something that is little discussed is the impact of Gartner ERP analysis on software buyers. Gartner has been a major promoter of ERP systems, but does not get its clients to think critically about what ERP system implementation means or what are the outcomes of ERP implementations and how much value software buyers receive from them.
See our references for this article and related articles at this link.
The Effect of IT Analysts on the Presentation of “Standard” ERP
Gartner or Forrester never addresses the issue of using custom-developed applications. But of course, Gartner and Forrester receive many millions from packaged software vendors. Therefore, they have a strong bias not to promote anything but packaged applications.
Another quite good quote that is related to this is found in the paper Prioritization Best Practices in a Ratified Consulting Services Maturity Model for ERP Consulting.
“The successful implementation of the ERP system can provide organizations with many benefits including increased accuracy of information, quicker response to customers’ needs, reduced order and delivery times, and elimination of unnecessary or redundant. These benefits are achieved through its data structuring capability. However, there are several drawbacks of the ERP system including vast storage and networking requirements, huge scale of business process re-engineering and customization, which all result in difficulty of implementation and large financial time and human resource costs. These costs can impact very heavily on an organization so typically specialists consultants assist companies with the complex implememntation. It is not just the cost problem that has been a major drawback of ERP. ERP implementations may also be prone to failure particularly during the implementation stage. As Beheshti has noted “the failure rates for ERP projects are relatively high and could lead to bankruptcy of the corporation” and he provides some examples of abandonment including Dell Computers and Allied Waste and also of consequential bankruptcies and law suits.”
Again, this is found in the academic literature, but far less in the industry literature.
Now let us return to the original research paper.
“These encompassing systems will reduce the idiosyncrasies of the company from the transaction processing part, all the way up to company management and customer relations. While this may be an advantage for some companies, it may be disastrous for companies that thrive on their ability to conform to customer demands, to be flexible and dynamic.”
Once again, this is never really brought up. The overall impression given is that all companies benefit from ERP rigidity, forcing companies into a “standard process.”
“An in-house development effort offers full freedom. All processes are candidates for reengineering, and all options are available for implementation. In opposition, an ERP implementation is often viewed as a mapping from the existing system to the new ERP system. The idea is to find a common denominator between the company and the business model embedded in the ERP system. Success is determined when the system work, seldom of how well it services the company.
In house, development should be limited to core functions. It is not necessary to develop a full body ERP system. Instead, a custom designed system should be put together out of several different systems, where only the core part is developed in house.”
Conclusion
Gartner offers advice at such a high level and has always had such large financial conflicts with vendors, with ERP vendors being no exception, that the Gartner ERP effect has been negative on software buyers. Gartner was a major proponent ERP system beginning the 1980s, essentially telling companies that everyone needed an ERP system. Gartner has a very poor understanding of development, with virutally no developers or ex-developers working at the company. Development is considered a negative for Gartner, because in most cases development does not pay Gartner. This partially changed with the rise of low code development environments and the rise of vendors that could pay Gartner to promote their wares.