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Considering an ERP Solution? A Note of Caution

When I set out to write something about ERP (Enterprise Resource Planning), I was wading into an area about which there had already been millions of words written — a Bing search for the phrase Enterprise Resource Planning yielded 2 million results. But intrigued by what I found, I persevered.

ERP, coined in 1990 by Gartner, grew from 1983’s MRPII (Manufacturing Resource Planning), which was itself based on MRP (Material Requirements Planning) developed in 1964 to counter Toyota’s manufacturing programs.

Each phase of this evolution came with acronyms providing a common lexicon for describing what organizations were planning to do. Along with this evolution came an escalation in scope, each level addressing more of the intended users’ processes than its precursors, and a subtle shift of focus: from the subject as a collection of functional challenges and means of dealing with them, to a structural edifice that can be developed, packaged, bought and sold as a coherent whole — and product offering.

Look where you will: the record of ERP implementation is hardly reassuring. Depending on which survey you consult, most ERP efforts (from 50 percent to more than 70 percent) take too long, cost too much and achieve nowhere near their goals.

Why, I wondered, would something so obviously fraught with danger have become so intriguing to organizations dealing with their information worlds? And why, knowing all this, would organizations keep lining up at the ERP ticket window for a ride to at best an uncertain outcome?

Yet they do and there are dozens of vendors — at least 40 — offering "ERP” systems and solutions. Obviously, we’re fascinated by something about the prospect of integrating all our processes, hoping that our organizations will somehow begin to operate as unified wholes.

A Too-Well Trodden Path?

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As I ruminated on this seeming incongruity, it occurred to me that the ERP phenomenon shares a number of characteristics with movements of the past. Perhaps most notable among these characteristics is our seeming fascination with big, celestial concepts, often defined by the Acronyms we assign them and the authorities that tell us we should be interested.

Could it be that we fall in love with the very size and apparent finality of what a movement like ERP appears to offer us? Could the canonization of ERP as well be driven by factors more aligned with the IT community than the needs of the organizations that consider it?

Like a number of concepts before it, ERP has gone through a “celestialization” and commercialization process making it, if not more achievable, certainly more attractive… and saleable. This process, no respecter of setting, has appeared in such diverse disciplines as corporate planning, knowledge management, content management and, of course, Enterprise Resource Planning.

DéjàVu… All Over Again?

In the 1970s, as planning became a discrete academic discipline, major firms set up “planning” departments filled with bright young graduate level planners who knew all the formal techniques of planning, but precious little about the industry in which they were to work. Some automotive and industrial firms had literally hundreds of these “planners” grinding out plans, sometimes completely divorced from the realities of their industries or markets.

By the 80s, after some disastrous results, the “Inventio Sponte Inventionis” (“planning for the sake of planning”) trend had faded and planning again became an important function within the expertise of specific industries.

Then the 90s saw Knowledge Management become the rage in many information settings. KM, a formal discipline since 1991, followed a path that included development of unified, and very expensive, "Knowledge Management” systems sold by major vendors and marketed, at least implicitly, as “the” answer to making knowledge maximally useful for the organization.

In reality, acknowledged even in the academic literature about Knowledge Management, no monolithic software system can solve knowledge problems absent the proper culture, procedures and willingness within the organization, and the “Big KM System” market lasted only until its targets learned that there was more to Knowledge Management than expensive software packages.

 

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