And the Real ERP Is…

  • Written By: David Clark
  • Published: May 6 2009

On October 9, I ran a contest asking readers to define ERP in their own words. Why? Because there are so many different definitions floating around on the Web that I wondered if users really know what they're getting into when selecting an ERP system.

This problem was really brought home to me a few months ago, when I was asked to write a brief history of ERP (for an organization who will remain nameless).

It didn't start well—throughout our first two meetings I couldn't help feeling that we were talking at cross purposes. It finally turned out that they weren't interested in ERP at all, but in SCM systems! "ERP" was just the organization's generic way of referring to any enterprise system…

Here are your entries to the "Real ERP Challenge" (I've edited them very lightly):

Manuel Ortiz: "An ERP when chosen correctly is a tool that allows the company to be more efficient, increasing productivity and profits. When chosen incorrectly it can be an expensive proposition."

My thoughts: This is an interesting comment, because it raises the point that an ERP system is only as efficient as the selection process behind it. Even the best ERP system in the world (hypothetically assuming that there is such a thing, because there isn't—more on that in a later blog post) won't help your organization if your selection process does not address your organizational change management needs as well.

Carlos Lian:
"ERP is the integrated software application(s) a business needs to support mainly its core business processes from end to end. ERP is the opportunity for an organization to improve its reliability in its operation and the decision making process. ERP is the means to change culture in an organization."

My thoughts: Excellent. ERP will undoubtedly change an organization's culture, but how it changes is an open question: an unstructured (or otherwise flawed) selection process can certainly change it for the worse. Disgruntled users? Rampant spreadsheet-based workarounds? A CIO on the verge of a nervous breakdown? Check, check, and check.

"One solution that integrates all your business functions."

My thoughts: I like this description, since in 8 words it describes the promised land of ERP. Contrast this with our discrete ERP RFP template, which contains 33,694 words.

Guus Krabbenborg: "An ERP system is a COMPASS that tells you where you are, how you’re doing and where your company is moving to."

My thoughts: I like this too, although I'd argue that there's some overlap between this definition and the description of a BI system.

Atul Shrivastava: "An ERP system is an integration system which not only integrates different organization systems and functions like HCM (Human Capital Management), Financials, Manufacturing (if applicable), and reporting from end to end in a transparent way by aligning these functions to organizational goals and policies; it also makes the information available at finger tips, helping stakeholders with better control and planning."

My thoughts: Nice, very nice. Again, though, organizational transparency is the result of a best-practice selection methodology, rather than a result of the ERP system itself… which brings one organization in particular to mind: This organization followed an unstructured selection process and landed itself with an ERP system that was supposed to integrate its processes and data… a few years later, it found itself struggling with no less than 40 different silos of information (I'll tell you who it was in July 2009, with the launch of our new blog series, "ERP Selection Insider").

… and the winner is…

Simon Fisher: ERP is a term that represents the sum total of activities involved in the planning of the resources of an enterprise. Nowadays these activities are frequently supported by the use of integrated computer systems which when operating together can be considered as a single "ERP" system.

My thoughts:
Nicely put! I like this definition because it makes a distinction between ERP (the grouping of activities) and ERP (the software system). Also, I like the touch of uncertainty suggested by the phrase "can be considered"… after all, there's a reason the ERP selection process is fraught with risk: it's because the boundaries of what ERP does and how it can help (or hinder) your organization are constantly shifting.

Simon, please contact me to claim your prize!

And now for our new contest!

Has your company ever gone through an ERP selection process? Tell me about your highs and lows in the comments section below… the funniest (or just plain weirdest) story gets a $100 rebate for the RFP template of your choice. Feel free to tell me about oddball sales pitches, demonstration glitches, selection snafus, or any other face-to-palm moment…

The rule: It has to be true.
Note: For blogging purposes, we operate on the honor system.
Hint: The honor system may not always be entirely appropriate for software selection purposes.
comments powered by Disqus