ERP Too Complex? Two Alternatives to “Rip and Replace”

In a fast-changing world, managers need practical, concise, fresh, and reliable insights to meet challenges and exploit opportunities. That is exactly what ERP (enterprise resource planning) systems are supposed to deliver. Done right, multiple ERP modules provide up-to-date information about everything from supply chains to inventory to staff utilization in executive dashboards that drive better decision-making.

But in reality, ERP can produce as much confusion as it eliminates.  Businesses often struggle to integrate multiple, incompatible ERP systems they inherited through acquisitions, or to link the new ERP platform with older manufacturing or distribution systems it can’t afford to replace. Even when an entire business runs a single ERP system from a single vendor, different business units or geographies may use such different processes or data models it becomes impossible to get a single, reliable view of conditions in the business.

It’s thus sad, but no surprise, that more than half of global decision makers believe their splintered, siloed ERP systems are too complex to give their employees and managers the information they need to reach their growth goals.

Those are the major findings of a June 2015 survey of 172 decision makers at executives conducted by APQC, a member-based nonprofit that provides benchmarking and best practice business research. Leery of big IT expenditures, and with bad memories of the cost and risk of past implementations, many are staying with their current, ineffective ERP solutions rather than making the aggressive moves required to compete in a social, mobile and cloud-enabled world.

Among the signs of pain:

• Almost 60 percent of those surveyed feel their ERP landscapes are unnecessarily complex.
• Only 27 percent of those surveyed have a single ERP system with consistent applications, processes and data models across the organization.
• The top three goals of an ERP simplification program would be to access high-quality information more quickly to better support decision making (74%), to reduce operating costs (58%) and to improve collaboration across the business (57%.)

The Way Forward

It is clear that businesses need their ERP systems to do a much better job of providing real-time, easily understandable views of critical metrics such as production, sales and customer satisfaction. Remembering the cost and complexity of their original ERP implementations, it is no surprise that many businesses have little appetite for replacing them outright.

One third of respondents said they would, however, consider a software-based approach that would enable rapid and relatively easy consolidation of financial data across a variety of ERP instances from one or more vendors. In recent years, vendors have developed viable approaches that require less cost and risk than outright replacement.

One is Cognizant’s AD³ (Analysis and Due Diligence Diagnostic) methodology. Within eight to 12 weeks, this diagnostic assures your ERP strategy meets your long-term corporate goals, assesses the state of your current systems and defines how it must change to meet your growth needs. It also provides a detailed, step-by-step roadmap, as well as a business case and value realization plan to help secure the backing needed to move forward.

Read the full results of the survey from our whitepaper and learn more about new approaches for moving past the limits of today’s ERP implementations here…  

For a detailed discussion on this topic please reach out to our SAP  consolidation expert Harry Webb  who co authored the white paper jointly with SAP at Harry.Webb@cognizant.com