4. ERP systems
Era: Mid-1990s to present
The pitch: "Enterprise resource planning systems appear to be a dream come true. ... The latest generation of commercially available software packages promise seamless integration of all information flows -- financial and accounting, human resource, operations, supply chain, and customer information. This provides for a unified view of the business, encompassing all functions and departments by establishing a single enterprise-wide database in which all business transactions are entered, recorded, processed, monitored, and reported." -- Elizabeth and Michael Umble, Baylor University, January 2002
Ah, the promise of ERP. All your essential businesses processes wrapped up into a single package that everyone in the company -- from the boardroom to the mailroom -- can easily access. One enterprise app to rule them all.
"Where ERP fails," says Roger Hockenberry, EVP for IT services provider Criterion Systems, "is when you try to apply best-practices business process that are empirically created to an organically grown enterprise. Replacing process that was developed internally, over a long period of time is not an easy thing for any organization."
Your choice? Either change your people and processes to match the software (good luck with that) or customize the software to match your business (hope you brought your checkbook).
As a result, implementing an ERP project is "like teaching an elephant to do the hootchy-kootchy," in the words of CIO magazine senior editor Thomas Wailgum. Millions of dollars later, most massive ERP projects end up half finished or largely ignored by the people they were supposed to help.
A 2006 report by the Cutter Consortium found that application software packages -- predominately ERP -- are fully implemented less than a third of the time. Forty percent of businesses reported that squeezing the promised benefits out of this software ranged from "quite difficult" to "extremely difficult." More than 90 percent of ERP projects take longer than expected to implement, and nearly 60 percent go over budget, according to the Panorama Consulting Group.
But many of ERP's failings lie with enterprises that weren't mature enough to handle the concept of integrated data flow, says Sue Metzger, management information instructor at Villanova University's School of Business. "The Y2K crisis of the late 1990s gave [ERP vendors] a great opportunity to come into enterprises and replace existing technology," she says. "Sure, some of them may have oversold and overcharged. Those were fat and happy times for many ERP providers. Organizations that had the fear of Y2K instilled in them felt ERP was the way to go, even if they weren't mature enough to handle it."
Though they never fully delivered on their promise, ERP systems are now common across large enterprises, as is the concept of data integration. "The challenge today is what to do with all that data," she says. "How do you make decisions based on that information?"
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