Tips for talking your boss out of legacy software and into ERP?

Unlike Steve and Bob, I am not a vendor of either ERP or anti-ERP solutions.

In my view, Andrew's answer does a good describing the strategy for properly evaluating a new enterprise technology system, whether ERP or anything else.

Assuming your boss is a non-technologist business person, he or she will want to understand the benefits of the new system relative to the old one. That means evaluating the costs and ROI associated with the transition.

Whether ERP is good or bad is completely beside the point, especially since the boss will not care about philosophical or theoretical positions. Successful system evaluation requires dispassionate, systematic, and thorough analysis.

Therefore, consider the merits and issues of remaining with the existing system and compare to a similar examination of proposed alternatives for the new system. Logical analysis will help yield the correct decision and thus persuade the boss, assuming the new system does actually make sense..

Steve, you are right, this can't be good :).

David, the problem that I have with blanket statements like "ERP is Inflexible, 80's technology, doomed to fail", is that they are so broad and generic. For many companies that are thinking of obtaining an ERP solution, I might agree, but I would have to understand their business, business requirements, unique situation, and processes.

For example, perhaps for certain software companies or service companies an ERP might not be the best way to go or be considered over-kill.

However, on the other extreme, there is no way a MedTech company can survive without a rock-solid ERP that can handle the many requirements the MedTechs have including compliance with FDA regulations. Integrating purchasing,demand forecasting, BOM control, lot and serial # tracking, labeling plus many more requirements without a fully integrated ERP would not be a job that I would recommend anyone attempt due to company and personal liability not to mention people's lives at risk if a recall is necessary. In fact, I doubt one would be able to pass an FDA audit of your processes.

In addition, the generic statements put all ERP companies into the same basket. While some believe that ERP is becoming a commodity, there are many differences between ERP offerings beside functionality. Things like deployment time and cost, quality of the software, does the customers view the ERP provider as vendors or business partners that really understand their business and care about their issues, quality and responsiveness of the customer support organization to name a few, vary widely among ERP solution providers.

Another thing to consider.... Is your ERP provider keeping up with the latest technology? Are the tools and flexibility facilitating job efficiency and providing access to critical data in a timely and accurate manner such that the information becomes a catalyst for action.

I understand that their are many ways to solve a problem and implementing an ERP is not a guaranteed best way to go for all companies. There are plenty of studies that one can point to that show the benefits of implementing an ERP and I am sure there are studies out there illustrating the other perspective. However, blanket statements assume all companies needs are the same and therefore by definition they are inaccurate.

David,

With all due respect, unless you have been involved in an FDA certification process and in a manufacturing environment for MedTech devices, your opinions are not based on fact or the appropriate level of experience. In addition, unless you can point to an efficient, cost effective solution, in an deployment, to the scenario I mentioned, you should retract your statement.

Final note, I really don't want to and never intend to be viewed as a biased advocate for ERP. If you look at any of my posts, I try to provide sound advice, based on my business experience, in Finance, Mfg, and Mgmt. The only time, that I get on a "soapbox" is to present the other side of complete anti-ERP perspectives.

With that, have a great weekend.

Caty, as you can see Steve is on his typical "anti-ERP soapbox" again. Depending on the size of the company and the complexity of the business, an ERP system implementation from "Kick-off" meeting to "Go-live" can easily be done in 2-3 months and be minimally disruptive.

But....you don't have to believe me, just ask our customers. I will be delighted to show how wrong Steve is. In addition, I will be very happy to supply an unbiased independent report on how well Expandable customers have performed; just ask... bswedroe@expandable.com

As a note, I am not really trying to do a sales pitch on Expandable, but rather simply provide another perspective to Steve's constant droning of the same tune. I am sure our competitors will do a fine job as well.

The benefits of an ERP system should easily justify the costs. See Andrew's list above as it is a pretty comprehensive list. A quick list of some other items to consider include:
- Inventory reduction
- Lower audit fees as your records and processes will be easier and quicker to audit
- Better Customer Satisfaction due to on-time deliveries
- Ability to meet orders due to proper planning of inventory; one incremental sale or saved sale can pay for the ERP by itself
- Tracking of serialized parts for warranty tracking

An analysis should be done as each company's particular situation is unique.

Caty,

Here is my suggestion to guide the leadership team from a business perspective to migrate from Legacy ( I assume Pre-ERP) system to ERP.

During late 80's ERP opened new doors for business to transactions involving multiple countries, currencies, legal entities leveraging global best practices, using a single integrated system. Initially the scope of ERP was limited to Sales, Inventory and Finance. Now ERP has matured to address any complex business scenario of large global corporations.

ERP is the way to go, if the leadership is considering any of these:

- Expand business globally with multiple countries, currencies and country specific business practices
- Integrate with business partners for visibility into key areas such as Supply chain and integrated Sales & Operations planning
- Leverage from business practices used by thousands of ERP customers
- Single integrated system that can interface with partner applications with minimum configuration
- Organizations using ERP can easily acquire and assimilate other companies. Also, seen as a mature company to be acquired by larger companies.
- Visibility into Finance reports using GAAP & other international standards increases investor confidence enabling increased funds for growth

Since majority of fortune 500 companies are already using ERP and many of them are looking forward to cloud, you need to direct the leaders towards current technologies.

Good luck..

Caty - hopefully the "boss" has no idea what's happening in the world. If you can set up a bunch of desk calendars all around the office with 1997 as the year. Try and get some old video of Clinton as President or the OJ chase down the freeway. Find a '90s rock station and make sure that is playing in the background. Explain that your legacy system isn't able to handle a four digit year and that at the turn of the century it will be useless......

The legacy system is an investment the company has already made. While it is surely missing a bell and whistle or two, it is running their company well enough that this guy still has a boss/leadership team to convince. Trying to convince anyone that investing 6% of the revenue on a project that will take well more than a full year to complete with a track record of being late 93% of the time and over-budget 58% of the time is a tough sell.

This company likely has an IT staff that is supporting the legacy system. Instead of advocating that this system be ripped out by the roots and replaced with an ERP that still won't solve their problems they can take an alternative approach: http://babblewareinc.com. This is the first enterprise software that does not require the gutting of any legacy system (which we consider ERP, Best of Breed and Homegrown). In a matter of hours the "gaps" of the legacy system can be filled, the IT department can be retained and the employee doesn't have to convince the boss of anything...he can simply show the results.

As Andrew said, the reason for failure will be social as the degree of change required to replace the legacy application is cultural. The gain isn't worth the risk and often what is achieved is a newer grave in which to bury your business. One thing I would suggest, for our fictional employee...keep your resume handy.

Steve is right ERP is next "legacy", inflexible, not user friendly and flawed in concept. It comes from 80s MRP and exploited an ignorance factor leading up to Y2K allowing the ERP salesperson to sell to CEO the one app that runs your business. In fact it is little more than a book keeping system with some integrated "processing". It has failed "people at work" where information is created and where change is constant. Steve makes a good point use the best and fill in where the gaps exists with a people and business supporting software to keep USP, efficiency and empower front line people. Think of many "processhubs" handling front and back office with in built flexibility to support change. See this paper focused on UK Government http://bit.ly/pSi0Ld it is the next generation "agile software". If you have ERP use it do not even think about changing it but if you have been thinking about ERP - forget it there are better options now available just as Steve suggests.

Bob, my point is just because one application does all that you mentioned does not make it the right or "best way" and it is “old” thinking. Every one of the functions you mention are initiated by people doing something and fact is this is where compliance must start. Who did what, when and then tracking end to end the results that will pass any FDA audit test. It really is not “rocket science”. In fact if you analyse step by step and that includes perhaps the most complex issues they become “simple”. System “processing” is only as good as the input and it is vital this is captured at source in a way that helps people in their job. ERP certainly historically from the big vendors is quite prescriptive and people will find ways around it if it does not support them and in reality it was not designed to do that? The fact is there are now better options that can deliver future proof investment but also recognise the valuable legacy information without the risks (and costs) associated with a large wholesale change that ERP represents.
I can assure you that with this people and their process approach not only is there a full audit trail of all activity the actual deployed solution is totally transparent via an easily understood graphical display which is the application and thus available for scrutiny by all interested parties in particular regulators to ensure compliance from start to finish.