ERP selection uncertaintyThe ERP (Enterprise Resource Planning) software market is a busy place. Populated by a multitude of vendors with wildly varied solutions offering a myriad of implementation options, the ERP selection market compares in complexity to neurosurgery while driving a bus with a spatula. Yet even though most of us are aware of this convoluted state of the industry, many influential enterprise decision makers expect a simple and predictable return on their investment. This can lead to unwarranted disappointment and lack of faith in a product that just wants to improve your business.
ERP SELECTION: SIFTING THROUGH THE SMOKE & MIRRORS
Understandably, every ERP vendor touts the various strengths of their applications and offers commentary and demos and pamphlets and singing telegrams. The IT departments of enterprise companies have no shortage of options and information on those ERP selections. What they don’t have—what they can’t have—is Certainty. No one can (as we’ve discussed before), but that doesn’t stop us from believing.
In fact, we’re really good at believing in a definitive answer to ERP selection, no matter the complexity of the issue we’re confronting. A study sponsored by NetSuite late last year examined the top reasons companies change ERP’s and found that 28 percent of respondents “believe that superior or cheaper alternatives are available.” Of course, in all likelihood, some of these 28 percent were correct; it’s hard to believe that each had found the best or cheapest ERP selection out there. But what’s implicit in that belief, the irrational part that the presumably rational respondents embraced, was that in a market this varied with products this complex there’s no way to know before implementation if the new ERP suite is actually better or cheaper.
SELECT AN ERP, NOT THE RECEIPT
Between better and cheaper, cheaper seems the easier one to know beforehand. However, cheaper only holds meaning if you get the same or better service, the same or better functionality for the lower price. With dozens of modules and hours of implementation, the issue of cheaper takes on as much complexity as better and takes just as long to know.
NetSuite argues that cloud-based ERP selections can solve the concerns of many respondents, though how such a solution could possibly approach the certainty gap is difficult to see. What real managers and IT directors need is not more certainty (as it’s less and less possible to attain) but more orientation toward performance and more acceptance of the unknown.
Next time, we’ll discuss how to focus on what you can know to select an ERP and how to let go of complex issues that you might be able to believe your way through. After all, thinking you know is no substitute for knowing.