Are we taking ERP too far ?
Whenever I meet an Executive or a Manager from a Software Company, I make it a point to enquire about their line of offerings and invariably I would hear 'We have an ERP for x segment, y segment, z etc'. A further question normally elicits a response 'It can computerize all aspects of that business in a single umbrella because it has accounts receivable, payable, inventory control, sales and distribution modules'. It set me thinking 'Is this all about ERP ?'
The concept of ERP took its origins from MRP and was designed primarily for manufacturing Companies to help integrate all their varied operations and bring in the much required efficiency levels. Perhaps the most salient aspect of an ERP is that each information needs to be captured only once in its life time and that will populate the other related aspects of the company’s operations. Earlier, there were islands of applications developed on different platforms within the same Company which did not talk to each other and hence duplication and inaccuracy of data was much rampant. ERP was brought in to replace all these disparate systems and ensure data integrity.
Given such noble intentions, it almost becomes a farce when you hear about an ERP for a tailoring shop or a watch showroom or an electronics repair house. Lest I am accused of being against computerization of any of these segments, let me categorically state that, I would like every enterprise and individual to reap the fruits of automation. But to offer an ‘ERP’ where there is no basic data or system certainly is excessive and vulgar. This is akin to giving a comprehensive Portfolio Management Software that can handle futures, options and derivatives to a person who does not even know his income and expenses or giving a Ferrari to one who does not even have a driving license.The lack of widespread success of ERP globally and in India can be attributed to the lack of readiness amongst user Companies. It would not be an exaggeration to state that most companies insist on provisions for shady and back-door operations in the ERP Software which defeats its very purpose. The willingness of SMEs to adhere to a disciplined approach, a pre-requisite to ERP implementation, is really suspect. Many of them do not even have systems, even manual, for their many operations and are run purely in an adhoc manner. It would be suicidal both for the Software Vendor and for the Company to go in for a ERP without its basic systems in place. The vendor thus has a very onerous task of educating the prospect of the benefits of using an ERP as well as on the stringent requirements at both operating and strategic levels to make the entire project viable.
Having said that, whether these so-called ERP Solutions truly measure up to that label is a big question. Just because there are some modules which have some sort of integration does not necessarily mean that the Software can wear the ERP tag. And if observed closely, most of them are skeletons with the vendor promising customization that will account for the flesh, blood and the life. A deeper look would reveal that even this skeleton did not come from knowledge of a domain but primarily from a project done for a client from that space. So the term ERP is mostly used to appear respectable in the eyes of the Prospect and to justify a larger price tag. Vendors do not realize that this quest for a false prestige is a real dampener to their efforts to generate lasting business.
Need we say more !!
Author - V. S. BadrinarayananE-mail ID - nrich@vsnl.in
Managing Director,
Nrich Software Private Limited,
Chennai 600 017.
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