COMPUTER BUSINESS REVIEW

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Issue Date: January 2008

Beyond automated point solutions

1 January 2008
Deon Kruger, manager of XON Business Solutions and ERP

Enterprise resource planning (ERP) and customer relationship management (CRM) applications connect people from different business units and different business disciplines, and connect different business processes, such as financial and operational. They are at the sharp end of modern office automation and have elevated the term from referring to point applications to encompassing integrated business systems.
Before digital systems, business information was contained in hard-format documents such as memos, invoices, statements, ledgers and balance sheets.
The first office automation products simply automated each of those functions. Today they are integrated and two of the most critical elements are the ERP and CRM applications that link the back- and front-ends of the business. They have gone from being a competitive advantage in the early '80s, to important business tools in the '90s, to standard, requisite tools for conducting business in the new millennium.
Today they connect people to processes and processes to people.
Integral to the business strategy
These systems have become integral to the overall business strategy. One basic example is that businesses with a growth strategy undermine themselves if they have systems that will not scale. As the business grows, they will need to take care of additional users, either incrementally considering organic growth, or in batches if growth is acquisition-based, and improve functionality. Bespoke systems designed specifically for the business at a specific point in time will not be flexible enough to handle those two common situations.
When businesses get it wrong, specifically when deploying ERP systems, it is usually due to price sensitivity or a skills challenge. They do not have the budget for a packaged solution or they do not have the skills in-house to support one. They end up developing their own and running into many more problems further down the road, such as getting only 25% of the functionality they required.
The only way to do ERP in a less costly fashion is to implement a core vanilla financial module around which further modules can be incrementally wrapped, or bespoke applications developed for business niches. But bespoke development is more often than not a recipe for disaster. Companies should not attempt to create products that companies like Microsoft spend $1 billion developing over years, unless they have very specific domain expertise and there are other tangible business benefits to be had that outweigh the risk.
Enough risk without bespoke development
Businesses face enough risk as it is when they implement a packaged solution. The projects are increasingly complex and it is imperative that organisations understand and establish their specific operational requirements, map their processes and how they interact with the business, customers, partners and suppliers. That is the foundation of the strategy used to automate organisations and research potential solutions and partners most suitable to meet their needs. Of course, they should by this stage have an internal project team to lead the rollout and not leave that up to the business partners. Partners generally do not have the insight into the customer's businesses and they do not have the political clout between divisions and departments to get the necessary buy-in for a successful rollout.
These office automation systems differ from their earlier counterparts also in that you do not dump them and leave them. Typically what happens is that post-implementation users enter a consolidation phase that sees them becoming accustomed to the new system. Partners often return to provide additional training in key areas, which helps immensely in overcoming resistance to change. After the consolidation phase, systems enter the maintenance phase with associated service level agreements (SLAs) and a year down the road new and alternative requirements emerge that typically see original systems tailored or additional modules developed or deployed.
It is critical that original designs of these sophisticated and complex office automation systems be aligned to business strategies and that they have flexible architectures that allow for change. Without that they return to their roots and become expensive point solutions with limited lifespans and little return on investment.
Deon Kruger, manager of XON Business Solutions and ERP
Deon Kruger, manager of XON Business Solutions and ERP
For more information contact Deon Kruger, XON Systems, +27 (0)11 237 4500, deon@xon.co.za


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