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Reality IT:
ERP - It Should be the Perfect System

online columnist Gabriel Fuchs     Column published in DMReview.com
May 4, 2006
 
  By Gabriel Fuchs

At my job, we have implemented enterprise-wide applications, commonly called enterprise resource planning (ERP) systems. But then again, who hasn't? Many companies decided to implement these kinds of systems in the 90s, and many are today doing a second round of implementation. Only this time, it will really and truly integrate the different company activities into one single system, just like it was supposed to do in the first round. The idea to implement an application integration architecture should not be necessary if you have an ERP system, or at least so it sounded in the 90s. Nevertheless, application integration has become an important priority for many organizations today, once they have realized that the initial ERP promises were far too often just promises.

This is all a bit weird actually. Failed IT implementations are certainly not rare, but an ERP implementation should be the perfect large-scale system to implement. Just think:

  • An ERP implementation is enterprise wide; therefore, it demands the active involvement and cooperation of all or at least several different departments and activities. No one should be able to say that his or her activities were "forgotten."
  • User needs are taken into account at the very basic level, i.e., the operational activities. No muddling about business intelligence (BI) related strategic activities and visions, but this is a system that is supposed to handle existing operational activities that should be known.
  • Definitions and documentation of operational processes are common practice these days. Thus, there are experts and consultants available to help your organization complete the requirements so that the users' activities can be correctly modeled for the ERP solution.
  • Once the process documentation is done, the actual ERP implementation begins. Most organizations today prefer to buy an ERP system rather than to develop it in house. Because the purchased ERP application has predefined support for many process-based activities, it should be relatively easy to implement the documented processes
  • Once all this is done, not only should you get a perfectly integrated system handling and streamlining all or many of your organization's activities, but there should also be one single database storing all the data. This way, you can leverage all the information that passes through your activities in some highly adaptable and performing BI applications.

It all seems to be the perfect application. As an extra bonus, it can be used for operational activities, as well as used strategically for the organization, which pleases top management. Sure, the first time around some factors may be underestimated (such as data quality issues, change management, help-desk support and so on), but this should be noted and fixed once the problems surface.

Why the heck do things go wrong already before they reach these factors? Why do things go wrong when implementing the defined processes in the ERP solution (even omitting "easy-to-implement" BI systems)? Even though the data is supposed to come from only one single source (i.e., the ERP system), the BI project too often turns into something even more complex than the ERP implementation itself. Why does the organization so often consistently and persistently repeat these basic errors over and over again?

Just look at it. We should know what our operational activities are (i.e., how we make our money), and we should be able to explain it - otherwise we do not really know what we are doing. If we can explain it into processes, an ERP system should be able to implement it. If not, it is either not an ERP system adapted to our activities or the implementers do not know left from right.

At least, this is the theory on how easy it should be to get it right with an ERP application. The reality is not like this. The amazing thing is how we - with an extraordinary ability - are able to go on repeating the same mistakes for years.

Once a company has succeeded - at least partially - with the implementation of an ERP system, it is certainly ready to go to the next level, which is often to leverage some intelligence from the data passing through the system. However,any company that has not been able to implement its ERP system, especially if it has already failed in trying to understand what they are doing and defining it, can forget trying to get some intelligence out of it. If the basic operational processes do not function satisfactorily, BI will not add anything because there will be few possibilities to act operationally on whatever is concluded by the BI system. BI makes sense only after the ERP system functions correctly. But then again, an ERP system should be the perfect system to implement.

...............................................................................

For more information on related topics visit the following related portals...
Business Intelligence (BI) and ERP.

Gabriel Fuchs is a senior consultant with IBM. His column Reality IT takes an ironic look at what real-world IT solutions often look like - for better or for worse. The ideas and thoughts expressed in this column are based on Fuchs' own personal experience and imagination, and do not reflect the situation at IBM. He can be reached at gabriel.fuchs@ch.ibm.com.



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