How to Determine If a Single-Instance ERP Implementation is Right for You
Sat, November 15, 2003
CIO — For the better part of three days last June, Bill McDermott, president and CEO of SAP America, sat at the head of an oversized conference table in an out-of-the-way third-floor meeting room in the Orange County Convention Center in Orlando, Fla. CIOs and other executives from some of the country’s leading companies attending the software giant’s annual Sapphire trade show paraded in and out, happy for face time with the head of the company to which most have either given or are about to give millions of dollars. In a meeting with a CIO reporter, McDermott stares out the tinted glass wall overlooking the bustling convention floor and then dives into the same pitch he gives the pilgrimaging executives.
"You have ERP," says SAP’s CEO. "The next step is to expand it to CRM and the supply chain." The idea, he says, is to control all the data in a company by standardizing on one system for the front end and using one data source for the back. His pitch reaches its climax when McDermott sounds the message SAP has been trumpeting all week:
It’s time to move to a single instance.
In other words, McDermott is telling CIOs to forget the multiple systems their companies use today, rip them out, and replace them with one ERP system?with one data store?that serves the entire company, no matter how diversified or geographically spread out it is. That, he says, is how to get the most bang for your IT buck.
"I hear it all the time," says Larry Shutzberg, CIO of Rock-Tenn, a $1.4 billion packaging manufacturer. "The vendors are pounding down my door."
By now, most companies?especially those in the $1 billion to $5 billion range?have heard the knocking. And so far, they seem to be listening. In a recent study on the government’s new financial reporting requirements, AMR Research found that 65 percent of the companies it interviewed were considering ERP consolidation, a percentage that analyst Bill Swanton thinks is representative of the market as a whole. "Only a small percent of companies did single instance the first time [they implemented an ERP system], maybe 10 percent," Swanton says. "Easily 50 percent of the rest are considering it over the next two years."
The Siren Song of Single Instance
What deploying a single instance boils down to is getting rid of your existing ERP and other best-of-breed systems?such as purchasing and CRM?and replacing them with a single monolithic system from a single vendor. Everything your company needs?financials, order entry, supply chain, CRM?would come from SAP, Oracle, PeopleSoft, whomever. There would be one giant database, one application that does everything.
