Choose best practice standard functionality
Future ERP systems must be based on standard functionality
Consider the amount of people who has an iPhone or a smartphone, and how infinitely much functionality, we have access to in the app stores.
We can choose exactly the functionality we each need, and with a few apps out of millions, we configure our smartphones to deliver exactly what we need – and often with very deep functionality of the individual apps.
We can even start using these apps without making adjustments to the setup or receive any training. And best of all, it is easy to uninstall the app, when we have no need for the functionality anymore.
This is how ERP systems should work. But unfortunately it’s just not the case.
You can get anything you want as long as you got the money!
With ERP systems it is virtually the other way around. Here is a clear ‘complexity conflict’:
If you want to have very advanced functionality, you have to invest in major ERP systems. In the major package you also receive a lot of complex functionality in areas where we just wanted something simple.
It’s either all or nothing – like buying TV packages, where you are forced to buy the whole package with 50 channels, even though you are only interested in two channels out of the 50!
If you want smart, deep functionality in today’s ERP world like for example intercompany trading, advanced planning and scheduling, detailed inventory or smart forecasting, well, then you are forced to buy large, complex ERP systems that often cost tens of millions.
The market demands Best Practice standard functionality
The alternative to throwing millions in a huge ERP system is to find a vertical solution that is tailored to the segment that you are in. Unfortunately our experience is that our customers seldom like the vertical solutions as they also with verticals get far more functionality than needed. The Verticals are not as expensive, but they still receive huge complexity to grab the few special things they need.
Our experience is that our customers demand Best Practice standard functionality. They expect us to guide them and instead of getting a tailor-made ERP system they are looking for ‘apps’ or add-ons that can address their specific needs. And ideally something that does not require a lot of setup and training to be useable.
This demand is continuously increasing. We have customers who has a tailor-made their solution for tens of millions over the years and now have a clear strategy of switching to 100% standard functionality – but of course the business essentials must be meet hence customers are now seeking add-ons from a world-wide perspective.
ERP providers have to improve in offering add-ons that works right out of the box and they have to be intuitive enough for the customer to use them without special introduction.
Read more about this topic in the free book: The Profitable ERP Strategy
I have written a book with input for your ERP strategy, and you can read it for free.
It contains 7 recommendations for a healthy and changeable ERP system:
1. Consider a Cloud Strategy
2. Focus on value and readiness for change
3. Select “best practice” scalable standard functionality
4. Have a strategy for flexible management of master data
5. Select ongoing operating costs rather than large investments
6. Consider a strategy for upgrades where only relevant data is included
7. Select a needs-driven ERP strategy – perhaps with different platforms?