Faster, Cheaper ERP for the Mid-Market

By Lee Pender

PAGE 2

Enter fast-track ERP. For the most part, fast-track packages are built like their older siblings, based on best-practices templates. SAP, for instance, now has 11 industry-specific templates for midmarket customers. These templates are designed to maximize efficiency and minimize customization, based on the processes and applications that have proven most efficient. Smaller companies often have undeveloped or underdeveloped processes, so they’re willing to take the advice of ERP vendors that have attempted to refine those processes. They can learn from the suffering of their larger counterparts. There is less room for change but at the same time, less room for error.

In fact, the biggest difference between traditional and fast-track ERP implementations is customization, or the lack thereof. Traditional ERP packages are often heavily customized, requiring consultants, time and money. The price tag on the doomed Hershey’s project, for instance, totaled more than $100 million, according to the company and press reports. By contrast, most SAP rapid implementations cost less than $300,000.

How Vanilla Is Vanilla?

it’s important to keep an open mind when considering changing business processes to fit ERP packages, experts say. Customizing packages should be a last resort, as the practices included in rapid-implementation plans are usually better than existing practices. That’s a major break from traditional ERP, which often relies heavily on customization to integrate applications and processes.

"Given a choice between custom and preconfiguration, choose the preconfiguration," says SAP customer Rick Schmidt, vice president of finance and corporate controller at networking applications provider NetRail in Atlanta. "If you think you’ve developed some terrific process to do purchasing or sales contracts or whatever process you’re doing, I’ve got a funny feeling that SAP probably has a good way for you to do it. You need to get in the mind-set that you just changed jobs, you are working for a new company, and you are learning a new way to do your job. It is the best practices that are key."

Gene Johanson, project leader for The Frank Russell Co., a Tacoma, Wash.-based financial services company, says changing processes helped his company shut down old systems that were ripe for creating errors. "It would be counter-intuitive to assume [PeopleSoft wasn’t] doing best practices in HR," he says. "Why do we think that we know more than they do? It’s caused some process change here, which is good. We’ve been able to effectively shut down all of the shadow systems."

Changing business processes isn’t something one person can do unilaterally, though. Altering processes affects many people?all of them in some cases. It’s important to involve everyone affected by the change in the decisions and discussions. Explaining that the new applications will make things better?not just different?is difficult but critical.


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