Navigating the Overwhelming World of ERP: A CIO’s Guide to Independent Decision-Making
As a CIO, you’re no stranger to the barrage of messages from system integrators and software vendors, each insisting that you must follow a particular path or choose specific options for your enterprise software. However, an African proverb wisely reminds us that “All monkeys cannot hang on the same branch.” This proverb highlights the importance of making independent decisions, rather than following the herd.
Major systems integrators/consultancies like KPMG, Accenture, and PWC, who are deeply embedded with these vendors, often offer assessments that echo the same sentiments as the vendors themselves. The truth is, getting an independent assessment from these consulting firms is almost the same as getting one from the vendors directly. They’re all part of the same collective network that benefits from pushing extensive changes to your current ERP software platform, maximizing their profits along the way.
These large consulting firms, software vendors, hardware vendors, and advisory firms are incentivized to convince you to undertake massive overhauls. The bigger the project, the more people get paid, and their goal is often to get you to change everything. They want to rip apart your existing systems to implement new, subscription-based SaaS models, disregarding the substantial investments you’ve already made in your perpetual license ERP systems. This shift from a stable, mission-critical platform to a rented, subscription-based model is akin to moving from owning a home to renting an apartment, with the landlord controlling the rent and offering limited customization options.
Extending the Life of Your Mission-Critical Platforms
In the face of this pressure, it’s crucial to recognize that the world of enterprise software is evolving. The traditional big four ERP providers no longer hold a monopoly, and there are now more options than ever. The days of relying on a single monolithic provider are over. Instead, you can now assemble a variety of best-fit, modular solutions tailored to your specific business needs. This new reality allows for a more agile approach to IT modernization, enabling you to replace underperforming components without overhauling your entire system.
Key Steps for CIOs to Handle the Challenge
Here are a few key steps you can take to navigate this complex landscape:
#1. Get Everyone’s Opinion but Do the Math: Gather input from all stakeholders, but make your decisions based on thorough financial analysis. Ensure that any proposed changes are backed by solid data and a clear understanding of the costs and benefits involved.
#2. Categorize Your Systems: List all the systems in your company and categorize them into groups: run-the-business, differentiation/competitive advantage, and innovation systems. IT should lead innovation, so ensure there’s a balanced focus on these categories. Outsource run-the-business functions, insource systems that provide competitive advantages, and focus on insourcing innovation.
#3. Analyze Tech Debt: Define tech debt not just as old systems but as any technology that will pose a challenge in terms of maintenance, operation, integration, or security. This broader definition will help you identify and address potential issues before they become critical.
The Real Value Lies in Your Data
It’s essential to recognize that ERP systems are commodities. They don’t differentiate you from the competition, so it makes sense to outsource their management to a reliable provider. This allows you to focus on areas that truly set your company apart. Remember, your company’s data is the treasure trove, while the ERP system is merely the display cabinet.
Conclusion
By taking a strategic approach to ERP management, CIOs can navigate the pressures from system integrators and software vendors while focusing on what truly matters: innovation and competitive differentiation. Embrace the new reality of diverse, modular solutions, and make decisions that align with your long-term business goals.
Remember the wisdom of the African proverb: “All monkeys cannot hang on the same branch.” Make independent decisions that best serve your organization’s unique needs, rather than following the crowd or the loudest voices.
