It’s time to re-write ERP

February 2, 2010
By djohnson

Kim Nash, in CIO Magazine article, ERP: How and Why You Need to Manage It Differently, thinks that it might be time to re-write ERP.

Today ERP is the Jack Nicholson of software: Its repertoire hackneyed, the old and expensive dog finds it hard to learn new tricks. It’s become a legacy technology, and CIOs are now finding new ways to manage ERP projects and the ongoing upkeep. Their best advice: Draw a clear project map and modify the software only as a last resort.

Later in the article, Ms. Nash writes “ERP isn’t much different today than the technology early adopters installed 15 years ago. But new technologies make traditional ERP seem dated. ‘The concept of ERP is not dead, but the technology under it is,’ says Bill Brydges, managing director of the ERP practice group at the consultancy MorganFranklin.”

Describing ERP Cost Savings

Ms. Nash’s article continues by describing how CIOs can get the most benefit per ERP dollar by reducing maintenance payments and adopting new technologies such as cloud computing. We will add some detail to these ideas.

Cloud Technology Benefits

The CIO article suggests that cloud technologies are a disruptive technology for IT and ERP. We agree, but want to expand on the cost savings and benefits that customers can realize with the cloud.

Benefit 1: Access from anywhere
Cloud technologies are centrally managed so they can be accessed from anywhere according to security permissions granted to individual users. Cloud technology makes it easy to expand your processing capacity so a centralized architecture does not become bogged down when too many users access the system.

Benefit 2: Easy to deploy and manage
Cloud architectures are well suited to deliver web-applications. A web application allows you to access rich functionality using a thin client such as a browser. Browser access saves money because you do not have to install and maintain client software. It also makes it easy to involve partners, vendors, and customer in your business processes. Cloud applications that are designed for the web minimize network traffic and validate all data at the server to alleviate latency and security issues.

Benefit 3: Easy to upgrade
The thin client and centralized code makes cloud ERP easier to upgrade that distributed servers with multiple clients. Modern programming techniques allow you to separate customizations from core code so vendor updates do not interfere with most customizations.

Benefit 4: SaaS or on-premise
Cloud applications can be offered as complete services (SaaS) or deployed on an internal cloud when just the software license is sold. You can purchase SaaS or cloud depending on which model meets your security, regulatory, operations, and cost requirements.

Reducing Maintenance Payments

Reducing maintenance payments is a no brainer for some because they cannot adopt upgrades due to ERP customizations. Ms. Nash’s article suggested running a generic ERP implementation so you don’t fall into this customization trap.

But if you have already updated to cloud technology and modern systems, then customizations can be adopted without the problems of legacy systems. Customizations are a critical part of doing business and are one of the benefits of modern architectures. In a previous posting, we discussed customizing ERP and defined the term easy-to-customize.

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One Response to “ It’s time to re-write ERP ”

  1. Leslie Satenstein on February 6, 2010 at 8:34 am

    The new paradigm, cloud computing has some maturing to do before it can truly replace in-house systems (as I believe it will).
    . This maturing includes (response times for network and executing application)
    . Security — keep items confidential.
    . Backup and recovery

    The benefit to the cloud is that the in-house server becomes an in-house communication exchange platform.

    In the client-server arena, the client will remain, but the server is in the clouds. It will not matter if the server is distributed around the world.

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