Forget the multiple point applications your company uses today. You need to rip them all out and replace them with a “single instance” ERP system?with one data store?that serves the entire company. That’s what SAP and other ERP vendors are telling CIOs, and companies seem to be listening to this siren call. This, despite the fact that it will cost millions. AMR Research predicts that moving to single instance will run you $7 million to $12 million for every billion dollars of revenue, and the project will last one to three years.
Why aren’t CIOs dismissing this out of hand? Wasn’t the failed effort (and wasted millions) on monolithic ERP implementations in the 1990s the main reason for today’s backlash against IT expense and the decline in CIO credibility? Haven’t CIOs embraced a better alternative and greater wisdom in implementing and integrating multiple best-of-breed apps across the enterprise? (In fact, we wrote about this trend in a story titled “This Could Be the Start of Something Small,” in our Feb. 15, 2003, issue.)
So what gives? Well, having one ERP system and data store remains a very appealing?if intimidating?vision. It reduces total cost of ownership, helps companies comply with new Sarbanes-Oxley rules and makes exploitation of customer data much easier. What’s happened that makes this a different proposition than in the 1990s, we learn in Ben Worthen’s story on Page 64, is the greater availability of bandwidth, the increasing viability of enterprise-size databases and the drop in storage costs. Not to mention the fact that we don’t have Y2K to distract us (although Sarbanes-Oxley compliance could be pretty diverting).
Still, although AMR says 65 percent of companies are considering single instance, I wonder if any enterprise that got burned once would go through with this again. Have we learned enough about project management, business buy-in, end user training, adaptation of business processes, change management and the other traditional ERP challenges in order to make it work this time around?
What do you think? Will your company try, try again or tell SAP to take a hike?
Richard Pastore, Deputy Editor