Thinking of buying a new system? This post could save you money

It’s tempting to think that buying a new system, whether it’s a top tier ERP product or something more modest will solve all of the problems that plague your company.

Indeed it’s a view that is heartily endorsed and promoted by a legion of sales consultants, industry ‘experts’ and specialist media.

The latest iteration of a new system will come with glossy brochure telling of a wonderful new world where the grass is green and it is sunny all day. Where transactions are rapidly and accurately posted and management accounts simply fly out with no human interaction at all.

The reality though is somewhat different, especially in the area of ERP. In fact research has shown that in most implementations clients never actually gain all of the advantages that they expected and that it may cost more and take longer than first envisaged.

There are a number of reasons for that but to take it right back to the start, the first question you need to answer is whether you need a new system at all.

I’d argue that many of the problems solved by the implementation of a new system could be solved by looking at the processes rather than the software and that smart managers would actually be better off running a ‘ghost’ implementation rather than spending a shed load of cash on something new and shiny.

Now don’t get me wrong, if you want to buy a new system then I’ll be happy to help you implement it. Maybe you’ve got a lot of cash you need to get rid of or you’re pumping a gazillion transactions into Sage line 50 each day. In which case buy, and buy soon.

But actually a lot of the problems that are often ascribed to ‘the system’ are actually a product of behavioral issues or simply down to the fact that the business has moved on since it implemented its current software.

One issue frequently cited as a reason to buy new is the difficulty in getting information out of the black box. It’s a problem that many businesses face and certainly a real factor in the decision to buy.

However often this can be down to a need to reorganise the processes around the business. The oft quoted ‘garbage in garbage out’ is a good example. If your inputs aren’t done to the correct standard or with the required level of detail then the system is irrelevant; you just won’t get the information you need.

Similarly if your chart of accounts no longer fits with the way the business is organised then it’s no wonder that people are downloading information, chopping it up in excel and then reporting it in a different way. This is often seen as a difficulty getting reports out of a system when in fact it is more about how the system is configured.

New systems have loads of bells and whistles. The more they have the more attractive they look. Who could fail to be impressed by TLAs such as ODBC, OCR, CRM and of course CPM*

Oddly though many software producers are now turning away from integrated bells and whistles and either licencing white label versions of popular modules or simply suggesting that the clients buys a different add on for specific purposes.

One of the most striking for me was when a vendor announced in a meeting that their reporting was awful and that the client would be better off buying their mid tier ERP system and then bolting on a third party reporting app!

So if you are going to do that then why not bolt on the reporting app to your current system? It would be cheaper, quicker and cause a lot less disruption.

Indeed in these days of SAAS** connectivity and integration are taken as a given.

Why is it then that many system changes do bring substantial benefits to the clients and end users?

In my opinion it is not the system that provides the benefit, it is actually the process of implementation that helps.

When a client goes through an implementation project they are forced to think about how the system should be used, what the chart of accounts should look like,what reports are really needed and to go through a data migration cleanse.

This kind of deep thinking doesn’t require a new system, you can do it with what is in place already, it just takes the political will and commitment in the company to make it right and as already stated the company can buy third party add ons at any point in its journey.

I’d argue that many companies would be better off running a ‘ghost’ implementation where they go through all the stages of an implementation project such as scoping, design, development and training without actually spending cash on new software.

In many cases the business would benefit greatly from the refresh but wouldn’t suffer the main upheaval of implementing a whole new system.

I realise of course that I’ll be very much a lone voice in this view, after all there’s a whole industry that exists due to its ability to convince you to change.

It is also true that some companies just have to change. Maybe they need a more capable system or their current provider is ceasing support or whatever it may be. I just think that they need to have a more balanced view of the process.

The advert – I’ve run and worked in implementations for companies large and small. I’ve run choice projects and system refresh projects. If you are thinking of buying a new system then why not get in touch?

Maybe I can save you time and money.

* So I’ve been a bad person here. TLAs are my pet hate. TLA= Three Letter Acronym, ODBC=Open DataBase Connectivity, OCR = Optical Character Recognition, CPM= Corporate Performance Management.

** OK so this is Four Letter Acronym. SAAS = Software As A Service. An app that is delivered online that can provide extra capability for a base system or standalone. Good examples would be Gmail as a mail client, Salesforce for CRM or Concur for travel and expenses management.

Posted in ERP, Project management, Systems, Thought.