CA Magazine - Annual ERP Software Survey 2009

Sep 1, 2009

Author: Michael Burns

Annual ERP software survey

Using technology to improve the way you do business

By Michael Burns

As we present the 11th installment of our annual CAmagazine software survey, it’s interesting to look back and see just how far we have evolved. When we ran our first survey, many people were unfamiliar with enterprise resource planning and vendors were just beginning to target their ERP products to middle-market companies. Now midsized companies are well served, as are their smaller and larger counterparts. New vendors continue to appear and new functionality continues to be released. We also expand each year on what we include in the survey. This time, for example, you will find a section on human resources. We have also included professional services automation vendors. PSA is really just ERP for professional services organizations.

As always, we have segregated the ERP products into tiers based on product cost and customer revenue and employees. This is a convenient, albeit imperfect, means of differentiation. Be cautious if you’re trying to calculate the costs for a system, since these numbers are just averages.

This year we asked vendors about the main factors that led to successful or not-so-successful implementations. For SAP, success was largely a function of buy-in from senior management. “The most successful implementations include strong oversight and commitment from the customers’ senior executive team,” it said. “When senior executives understand the overall project plan and goals and participate in high-level steering committee meetings, they can better empower their teams and help overcome obstacles to the project’s success quickly and effectively, leading to projects that are implemented on time, on budget and on scope.”

The role of a steering committee can differ across organizations, but it’s vital that larger companies have one. At the very least, it should provide guidance and support.

Syspro called for “a clear strategy established upfront and firmly anchored in the business objectives the ERP project [was] to enable.” The point is that success is more than just being on time, on budget and on scope.

Strategy starts with an understanding of business objectives and critical success factors. A CSF is what an organization must do well in order to be successful and it should be aligned with business objectives. If a business process/system supports the CSF, it can be deemed effective. Key performance indicators measure the extent to which CSFs are achieved. The KPI is especially important when implementing a new system or improving business processes. The KPI goal will let you know whether you’ve been successful with the system implementation and will act as a motivator throughout the process. By linking achievement of CSFs to the implementation, the new system has the potential to significantly improve business processes and contribute to an organization’s success.

Important as it is, strategy must be accompanied by a good method for achieving the intended goals. As Sage put it, “Successful implementations apply formal project management methodology.” The larger companies typically have trained project managers on board. But small and midsized companies have a tendency to treat project management as a form of bureaucracy. A good project manager can have a significant positive impact on the success of an implementation project, helping to manage not only scope and timing but also budget.

The project plan is one of the key documents in the implementation of an ERP system. It should include time, resources and dependencies between tasks. Employees working on the project should have the opportunity to offer feedback on the plan before it is made official. At the beginning of an implementation, there are many unknowns. The plan should be fairly accurate in the design phase, but the subsequent phases will be rough guesses until the design is known.

Not surprisingly, implementations that were not so successful often lacked the very elements that made for a good implementation. Epicor cited “overambitious implementation plans that are underresourced,” as well as “poor communication, misaligned expectations and resistance to change (lack of change management processes).” According to Deltek, “In the vast majority of cases, implementations that bog down do so because the customer has not had the right number of committed, knowledgeable resources allocated to the implementation project.”

There have been some big improvements in software since last year. With SAP, you can pick and deploy the functions you need without upgrading your solution. Exact Software’s Globe product now includes North American sales tax compliance. Syspro has caught up with some other vendors by offering interface customization and built-in KPIs, which are “ready to use out-of-the-box.” Sage now includes customer relationship management in its core ERP offering at no additional charge. But Epicor seems to have made the biggest leap with what it calls the “convergence of nine ERP products into one global configurable ERP platform.” Both Oracle and Microsoft had announced plans to do the same thing but Epicor beat them to the punch. Deltek’s enhancements in Vision 6.0 include support for multiple languages (such as French) and adoption of Microsoft SQL Reporting Services.

When asked about planned enhancements over the next couple of years, vendors had plenty to say: more workflow, web applications, business intelligence and cloud-based services (the vendors provide the infrastructure and services over the Internet). With all the improvements we have witnessed over the past 11 years, you would think it would also be easier to implement ERP systems. Unfortunately we still hear about failures. Usually, technology is not the culprit; it’s the processes used to select and implement the systems.

The analysis in the charts on camagazine.com is based on the vendors’ responses. Although we tried to correct any obvious errors, we cannot validate every line item.

Michael Burns, MBA, CA, is president of 180 Systems (www.180systems.com/), which provides independent consulting services, including business process review, system selection and IT audit. Contact: 416-485-2200 or mburns@180systems.com.

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