Top 10 ERP Software Implementation Myths | ERP Vendor Myth vs. Reality
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- čas přidán 28. 06. 2024
- The ERP software industry has always been full of biases and economic self interest, but the amount of misinformation being spread has reached a new high. This video outlines the top 10 hoaxes that have been perpetuated by the ERP software industry and ERP vendors, which CIOs and other project team members should be aware of as they continue on their digital transformation journeys.
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Great video Eric. I agree with what you say but a couple of contradictory thoughts:
1) Don't conflate agile with accelerators. They are the counter opposite.
Agile is all about putting the user or process owner at the centre and recognising that they may not know what's best until they can experience it.
Accelerators are all about pretending you know better than the user. They have more in common with "Best Practices".
IF the business case is there to customise a process/ UI / analytic then true agile is the best method to do it. Not writing 10000 page designs up.
2) Accelerators and best practices are a great way to save money and reduce risk IF the process you are accelerating is a commodity not a competitive angle. AND it's more cost effective to change the business process than change the software - generally back office processes executed by a small number of people.
3) Sales processes. The companies buying these solutions are often architects of their own downfall. It is common for the buyer to deliberately withhold complexity to get a cheaper implementation quote, beat down the price and abandon their own responsibilities to steer the project. Then they wonder why the project fails. There are unethical SI but lots of honest ones have been burnt by this.
Cheers,
Matt
Thank you, Matt - this is great feedback!
I have been in this business for almost 40 years (DBA / developer, development manager, CEO, owner) and one thing I have (almost) never met was a sincere and savvy consultant like you!
My sincere respect and best wishes to you!
Thank you! Kind words, and I hope you enjoy the content!
In the old times, The Mythical Man-Month, was the book I read and admired. (And had fun reading it.) It's about time to get something similar about ERPs. The title could be 'Emperor's New ERPs'. Or maybe: 'ERP's New Facelifting'.
Thanks for your work!
Jože Novinšek would you say it’s still worth a read today? I always liked the story of the manager expecting nine ladies being able to have a child in a month...
Best analysis ever.I am a Sap consultant for ages and you are 100% right.
Great content as always Eric. I completely agree with your list(even as an ERP vendor - not all are motivated by $ though - some are motivated by long-term sustainable positive outcomes for all parties).
My only push back is that it assumes (of course for brevity) all ERP implementations are equal. The drivers for change must be taken into consideration.
Many businesses "chose" to change because they have to e.g. end of life product. Then, an "easy button" (love this!) sits atop their priority stack, and that might be ok "Just give us what you have".
Other decision-makers fall foul on the sales process. They start out with a business problem they need to solve, then they get blinded by hawkish sales folks, and by the end of the process are conditioned not to solve their problem, but to get the fanciest widgets at the lowest cost (which inevitably spirals).
In my view, there is nothing more expensive than a cheap ERP system. There is nothing wrong with managing costs, but seeking value is way more important. Independent consultants have a huge and important role to play in setting expectations and actually delivering the positive outcomes (sea view apartment!).
I've been around ERP since Pontius Pilate was still just a navigator, but I learned a lot from this. Listening to it was time well spent.
Sam Graham Glad you enjoyed the video!
You have hit the nail on the head ! The so called BIG players have created a narrative that they are the only effective ERPs. I believe the time for the lesser known, yet covering many or more functionalities that the bigger ones do and have a very simple licensing model, are emerging. I believe the larger organizations should evaluate these for their digital transformation journey. The monopoly of the Oracles and the SAPs of the world should be put to rest. Agile for implementations is just a new way to sell the product. It is ineffective for plain implementations. It’s better for development projects. Thanks ERIC for sharing your views.
Thank you, Chandra! I appreciate the feedback and hope you are well.
Thanks ERIC, after having dedicated over 2 decades on Oracle Apps, I have turned an evangelist for Odoo.
Interesting...what do you like about Odoo?
I’m just a beginner, so I don’t know much about the industry. But this video seems golden to me! It points out what could be staring at executives in the face, but no one realizes it.
Great overview Eric. Our company has been conducting independent evaluations (truly independent) for 30 years. The only hoax I'd add is that the vendor assumption lists, often deep within the commercial and legal agreements is a massive Achilles heel. For example, vendors will assumption that the data conversion is the client's responsibility, that "train the trainer" is the proposed approach, creating training materials is the client's responsibility and UAT material preparation and execution as well. While these all sound reasonable, they almost always lead to variation risk, as the client assumes an all-encompassing implementation price. We have seen many instances where requesting vendor support for these critical areas has resulted in significant cost blowouts and tension as the client usually feels the sales proposal has been dishonest. We do a lot of Agreement reviews with our evaluation processes to flush out this hoax area.
Thanks, Peter. We have similar observations in the market!
Peter Goes yep the train the trainer is a classic. The ramp-up is when none of the involved departments have budgeted resources for those trainers, point the finger at each other and then the consultant is gone and no trainer has been trained. Also the change to modern systems means that IT wants to keep their headcount while telling the business departments they now have to configure their software, while still resisting the change to a product / process owner based organization. As you can guess I’ve been burned before...
Bang on with your No.1 - couldn't agree more. We're currently going thru an on-prem to cloud implementation where the business has been sold that the 'cloud' will provide mobility - but what we're actually getting is a jury-rigged version of the same MS windows based product but 'lift-and-shifted' into a terminal service accessed via a web browser.
Sorry to hear about the challenges you are facing - but at least you know you’re not alone!
Could not agree more on no. 7 ,no.6 and no.5 in particular where projects are taken over by big implementers especially if organizations are not fully dedicated to being fully autonomous after the implementation is to be completed. Best practices may be a concept that smaller organizations may have some benefits to buy in if it's their first ERP implementation,
That is more rounded. That is an excellent vlog as well.
About no.8 It reminds when a was a presales manufacturing consultant in late 1990s for a fairly large ERP firm. We were involved with a consulting firm that was a business partner with our company and the proposal that we made including software and services from that partnering consulting firm was twice the price of our competitors. And so we had a meeting where that partnering firm cut its implementation cost proposal in half to be able to compete price wise with other proposals. They then said that dont worry, in the end it will cost as much as their first proposal after the prospect customer signs its contract.
Thanks Eric, great video.
I work in ERP sales, and most sales involve independent consultants. One thing I notice is that most of these independent consultants are pushing a single vendor approach, so maybe customers are being led/conditioned into that mindset? It seems to me that instead of replacing all systems (finance, HCM, procurement, BI, CPM), it makes more sense to prioritise the areas that could deliver more value and focus on those. I think you made a video on this already, so not aimed at yourself, just observing that if the consultants perceive this as a harder sell to the customer then maybe they are also looking for the easy button?
That's a great point, Craig. Consultants don't help matters much when they revert to the traditional method of choosing one single ERP system and hoping that it will work for your entire company. No need to limit yourself these days!
Having just watched this, I feel you give a really good analysis, I wonder about the push to the cloud, does the prospect of 'Edge' diminish the idea of cloud or, at least, a full movement to say SAAS
Thanks Eric, many of the hoaxes you mentioned are thought provoking for sure. I think the "Agile/Implementation Accelerator" one is particularly interesting. We're pressed by senior management that "it takes too long for IT to implement a solution". I'm thinking about a hybrid approach that combines "big picture" waterfall planning and Agile concepts in terms of how we understand business processes, track requirements, engage stakeholders and communicate progress. I'm eager to hear your thoughts in this, thanks!
Hi Junxia, I like the hybrid approach as well. Both waterfall and agile have elements that are helpful, so the key is to find the right balance. If your management team wants to standardize, drive efficiency, and get everyone on the same page, then you might lean a little more toward waterfall. If your company is entrepreneurial, changing very quickly, decentralized, etc., then you might lean a little more toward agile. It's all a balancing act!
Hi Eric, nice list. I would add leading edge technology which most vendors claim, when in reality most of their products rely on legacy and outdated technologies, some of them heavily based on 1970's mainframe technology not much different from mainframe and dumb terminals model of the time or 1980's pre-Internet era relational databases. Add to the fact that all these components have been tightly coupled from the start intentionally with a vendor lock-in in mind and only a complete rewrite/re-architecture of the software could bring the solution to the modern times (which many vendors only recently address). To me, this is ERP's best kept secret that is keeping clients struggling with complex and rigid solutions. All in all, ERP vendors face a structural problem that is a huge disadvantage and if taken by new players, it will realign the whole industry.
Stellar video! This nails a lot of issues on the head!
Thank you, David...glad you liked it!
I’m
A tech analyst at a large insurance co. I concur with your top 10. However there are a lot of deceit with what’s going on at our company and the consulting companies
Employee morale is low. A lot of cloud and push to lift and shift. I feel it puts our employee and policyholder information at high risk. What are your thoughts.
Salesforce and Guidewire are the huge push and they brought in Omnichannel too.
highly appreciated
Very informative
Agree with your video, But i had questions, right now i start project ERP System as implementor using Open Source ERP, what your opinion about Open Source ERP System?
Open source can fit in some situations, but I honestly don’t see a lot of clients using it. Having said that, Odoo seems to be gaining momentum in certain parts of the world.
Opensource ERP is strongest in the country where it is developed. Watch out first for local requirements, GST India, 1099, Sales Tax, ACH in the US, and Accounting integration in Germany. India, Germany, France, and the US are covered best by projects in their respective countries. If you can't get a basic invoice out of the system, it's no good for where you want to use it. Having Development tools like no-code module generators helps a great deal to deal with all the missing functionality. Flectra & Odoo, Dolibarr, Axelor, OFBiz, ERPNext, ADempiere, metasfresh are good starting points. Many try to move to hosted services.
All Hoaxes I fully support. Just want to add Not only the Tier 1 vendors are providing kickbacks to consultants but if you think about it even IT who are key to an ERP implementation what to add skills to their CVs. Of course having experience working on a Tier 1 implementation who further increase their net worth. Just this factor along can encourage CTO/CIO/IT Staff to favor a Tier 1 proposal. (adding to point 8 on your list). And one last point I was trying to find a Book on ERP for some of the Executives of a company to purchase and give them as a good gesture. I thought the series for Dummies would be appropriate. Guess what their is only one book on ERP for dummies and it written for SAP. Need i say more. Maybe your collection of articles can be summarized and a nice visual (infographic) that can be dedicated for those that dont like to read to gain more knowledge about ERP and the wonders it has to offer.
Thank you for the feedback and great suggestions!
No CIO was ever fired for hiring IBM.
Wow, bold claims, i hope not that you get into the problem with ERP vendors, my personal experience with Oracle representatives that they were pretty interested even if there no business deals were made, like for real onetime before covid i even spoke with Oracle EMEA vps.....
1 Only big ERP can scale - The core value of ERP is integration and data integrity across all functional areas
10 Cloud ERP eliminates the very cumbersome and costly upgrade process and in-house system admins
Best Practices are true in the case of SAP, in which functionality is modeled after the business processes designed by the master of business process Prof. Sheer, plus it incorporates the legal requirements of just about every industry in every country, in every language.
A customer wants to hear "Anything you want, we can make happen"
The big consulting firms will cater to every wish the company is willing to pay for. Rewrite the software all day long. Sure. We need 5 more developers. No problem.
The customer buys what he contracts for, not what he saw in a demo. If you test drive a Mercedes and buy a Yugo, that's what you've got, a Yugo.
"Independent" Consultants are typically very experienced consultants. Naturally, they are experts in one system, and that's what they promote. The big firms subcontract them to fill gabs. The client would get much better results if they would hire independent consultants as their in-house team members directly. That way that know-how becomes a built-in QA function on the project. Plus, the big guys would not be able to scale up projects like crazy, as these experienced consultants would act in the best interest of the company without obligations to the lead integrator.