Look Beyond ERP to Make Your Supply Chain a Strategic Differentiator

I recently found a blog post by Lora Cecere written in what must have been a very difficult time for her. Her mother had just passed away and in the midst of all the somber activity of making the necessary arrangements, Lora found time to help a reader of her blog with a very difficult problem – overcoming corporate IT policies that force business users into using a single vendor (Oracle in this case) for all business planning. Her advice;

• Don’t wait for funding to implement an Oracle solution.
• Instead, leverage a Software as a Service (SaaS) solution which can be funded from an operational budget.
• What’s the best solution? Not Oracle – it requires very skilled users to make it work, and most companies don’t have the people or the resources to train them.
• Never select a vendor based on PowerPoint or a canned demo – get the vendor to show you how their product works with your processes.

The key question Lora asks at the end of all this is why do companies limit choices for the supply chain planning user to applications offered by the ERP vendors?

I think the answer is twofold;

1. ERP vendors have done a great job convincing the IT management that their suite of ERP applications are “integrated” and as such will simply work together. The truth, however, is starting to come out. In most cases, the various programs contained within the ERP suite were at one time separate applications that were acquired from another vendor and jammed into the “Suite”. The reality is, each component of the Suite needs to be integrated just as if they were different products from different vendors.
2. The ERP vendors have successfully implemented the razor blade approach to selling (or the more modern version – sell the printer for dirt cheap and charge exorbitant prices for the printer ink). We’ve seen many sales cycles where ERP vendors give away several applications in order to make the sale. The customer thinks that this is a great deal until they learn that a) the stuff they bought doesn’t actually work that well, b) they have to implement all this crap at a significant cost, and c) they are charged for maintenance and support for the “free” stuff.

On the plus side, companies are starting to see through these tactics and are starting to look beyond the incumbent ERP vendor for supply chain and S&OP solutions. Those that do, are discovering that supply chain can again be a strategic differentiator rather than just a cost center. In conclusion, my condolences go out to Lora and her family, and my thanks as well for taking time out during a difficult period to offer guidance to those looking to take their supply chain beyond the status quo. We want to wish our American readers, and those around the globe, a safe and Happy Thanksgiving.