Picking a Side: ERP WARS
By Amberly Dressler, Managing Editor
Of all the applications and platforms catered toward business operations today, it may be surprising to some that the enterprise resource planning (ERP) industry can be one of the most cutthroat - despite its innocuous-sounding name.
As brands are tasked with finding the right ERP for them, the mud-flinging between some providers can be quite a distraction from their original mission: replacing stand-alone systems like traditional accounting software and inventory management systems to streamline information across the entire organization (e.g., a sales manager for a distributor could check a client's order status before a call and a merchandiser could simultaneously see inventory levels on which to make ordering decisions while executives maintain key information on overall financials, etc.).
The transparency that ERP technology provides is really quite impressive, and its fueling a multi-billion dollar industry, which is expected to reach $48.22 billion by 2022 according to April 2016 data from Hexa Reports. With so much industry competition, available cash (which fuels plenty of acquisitions) and medium- and large-sized customers to obtain, however, some obvious hostility has developed between providers that plays out in the press and in advertisements.
One example is that of Oracle (a top vendor in the space) versus Workday (an "alternative to ERP"). A recent headline, "Oracle Corporation: The Gloves Are Still Off Against Workday" (ValueWalk, April 2016), sums up the situation pretty well in that there is a roughly 10-year history of back-in-forth rhetoric between the companies - primarily due to Workday being co-founded by Dave Duffield who founded PeopleSoft, which Oracle acquired (which many say was by "hostile" means) in Jan. 2005.
That's not the only storyline; FinancialForce, which provides a cloud ERP solution for Force.com (the cloud computing platform from Salesforce) showed its hand last year as attendees arrived to NetSuite's annual conference (a leading provider of cloud-based ERP) with airport ads like "ERP FrankenClouds are NotSuite" (wsm.co/airportads), even launching a website to tout similar content.
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There are even more examples to choose from; and the finger-pointing is interesting to say the least; but these distractions come at an expense.
With so much at stake, end-users must stay above the fray, which is probably good advice for the providers too as there are plenty of unhappy ERP customers available for the taking.
The "2015 ERP Report" from Panorama Consulting Solutions found an increase in implementation costs from 2014, an increase in failure rates and fewer companies saying they would have chosen the same ERP software vendor if they could do it all over again. What Panorama says this data suggests is that companies are struggling to select and implement ERP systems in a way that they would consider a success.
The definition of success might be skewed from the get-go, however, as Deacom Founder and CEO Jay Deakins cites "that it's easy" as a big misconception businesses have about what an ERP can do for their company. ERP seekers should not only ask providers the big questions (e.g., "Does your system handle procurement and logistics processes?"), but also, and more importantly, sub-questions (e.g., "Can a drop shipment package look like it came from my company?"). Without the right answers to sub-questions, Deakins says companies will be forced to still use workarounds.
Brands that haven't used an ERP in the past or are seeking a new one to provide greater transparency within their operations, must also know that a complete cultural shift might be needed according to Deakins. For instance, certain departments may be used to operating in a silo and may resist having all their information available to others - and the need for accountability that may result.
With increased transparency over everything from inventory to costs, business communication can be eased dramatically through ERP implementation, getting rid of roadblocks for both enterprises and their end-users. Choosing the right ERP, however, will require an astute team of professionals who can wade through the mud.