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Ask Slashdot: When Is It Better To Modify the ERP vs. Interfacing It?
New submitter yeshuawatso writes I work for one of the largest HVAC manufacturers in the world. We've currently spent millions of dollars investing in an ERP system from Oracle (via a third-party implementor and distributor) that handles most of our global operations, but it's been a great ordeal getting the thing to work for us across SBUs and even departments without having to constantly go back to the third-party, whom have their hands out asking for more money. What we've also discovered is that the ERP system is being used for inputting and retrieving data but not for managing the data. Managing the data is being handled by systems of spreadsheets and access databases wrought with macros to turn them into functional applications. I'm asking you wise and experienced readers on your take if it's a better idea to continue to hire our third-party to convert these applications into the ERP system or hire internal developers to convert these applications to more scalable and practical applications that interface with the ERP (via API of choice)? We have a ton of spare capacity in data centers that formerly housed mainframes and local servers that now mostly run local Exchange and domain servers. We've consolidated these data centers into our co-location in Atlanta but the old data centers are still running, just empty. We definitely have the space to run commodity servers for an OpenStack, Eucalyptus, or some other private/hybrid cloud solution, but would this be counter productive to the goal of standardizing processes. Our CIO wants to dump everything into the ERP (creating a single point of failure to me) but our accountants are having a tough time chewing the additional costs of re-doing every departmental application. What are your experiences with such implementations?
That said, it's not always practical to in-house everything, so a balance needs to be struck - keep the design and some worker bees in-house and then leverage vendors/contractors to spin up extra bodies for build cycles.
Regarding your single point of failure concern - while valid, a properly designed ERP system with redundancies and load balancing should alleviate the core of that problem. Again, balance needs to be struck, while you want a single place to do all of your ERP functions, it doesn't always make sense to have them in one application that has to be customized to within an inch of it's life in order to do everything it needs to do. This needs to be addressed in the design phase to create logical business units that can sit on separate applications that, ex, communicate with the proverbial mothership via an API
there is your answer. ditch it. quick..
---- Booth was a patriot ----
Because articles aren't just for those who can answer them. The rest of us are curious and want to learn new things, but when one keeps the subject shrouded in esoteric jargon (to this crowd mostly) that makes it hard to do.
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We are still going through this where I work. Previously IT was run on a bunch of Lotus Notes / Domino databases. Those have since been replaced by PeopleSoft and ServiceNow.
You have to see the opportunity for what it is. You can have real conversations with the departments about what their real needs are. It is going to take a while, but you will have to produce documents that detail the core application functionalities for all of the applications. Then you will have to map those functions into the ERP system. Once you have done that, you will have your gap analysis and be able to focus your developmental resources. You have to get buy in from across the organization and get people committed to and willing to do things differently. The ERP equivalents of the current applications will not be apples to apples. If you try to do that, you will never get through it and will end up failing. If you are just going to recreate the apps, you might as well not even bother. The key is to focus on the functionality. Focus on the business needs / business cases for the applications.
For something that big, you are going to need at least 3+ full time employees. A project manager to keep everything organized and fight back against scope creep, a senior developer / architect to make the technical decisions and provide guidance to the team of developer(s) who will do the actual work. In all honesty, what you are proposing is a significant investment for the organization and a shift in culture. Each one of those employees is easily a six figure salary, so figure over half a million dollar in salary (plus benefits, etc.) Good developers are hard to find and building a successful development team is a challenge. You will obviously need an executive sponsor who can help you figure out where to position this new group / department in the overall organizational hierarchy.
The long term benefit to your organization is that you free yourself from the vendor. The risk that you run is that you might end up with incompetent developers or management on the new team and find yourself worse off than before.
Have you considered bringing in another vendor? At the very least, you can use that as leverage to negotiate more favorable conditions with the current vendor.
You should have enough experience with the current vendor to determine how accurate their project quotes are. Use that knowledge when you ask them for quotes on replacing / reproducing the current application functionality. Then compare that to what it will cost your organization to do it in house. It should be clear very early on in the process if you are going to save enough money to justify such a drastic realignment of the management, operation and development of the systems.
Because, and this is important, jargon familiarity isn't always equivalent to available insight. It's what popular culture uses as fictional markers for insight, but the reality is that not only is expertise a continuum, but it often involves ideas from multiple realms of knowledge.
I agree. If you are spending millions of dollars on your ERP, you should probably have in house developers capable of customizing your system (unless you just mean a couple million over a decade or so). You will probably always need some help from consultants, but a good deal of the work could be done by your own staff. This would likely save quite a bit of money. I work as a consultant on various ERP and CRM systems, and all of our long term clients eventually start to bring the work in house because of costs. Our load goes down as they hire more people, but we usually stay available with support contracts for years.
And the first thing your in house devs should control is the integrations between your ERP and home ground applications. Companies that rely on consultants to handle their integrations become very dependent on those consultants.
There is nothing wrong with having a large number of integrations. If you have a large system, the belief that you can get all business processes into one ERP system is probably just a dream. But getting a firm handle on all of your integrations is an attainable goal. Then you can make more informed decisions on when and how to move functionality into your ERP software. And you can be more comfortable that you are re-implementing that functionality properly.
Disclaimer: My day job is re-engineering the integrations for ERP/CRM systems, so take the importance I give to the integrations with a grain of salt.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke