Choosing ERP software |
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EXPERT RESPONSE FROM: Tom Pisello
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QUESTION POSED ON: 07 November 2003
We are in the process of choosing what ERP software to implement. With the recent mergers (Oracle, JD Edwards) do you have any strategies that I can use to reassure management that we have made the right decisions in this crazy ERP market?
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EXPERT RESPONSE
1. Remember, these are not the first technology mergers ... and won't be the last
As elements of the technology market mature, larger companies are better equipped to meet demand and see acquisitions as a chance to add market share, open new markets and grow. This has already been true of computing infrastructure markets such as data centers, storage, personal computers, personal productivity applications, messaging, printers and networking.
Enterprise software is the next frontier for maturity and consolidation – and the recent merger activity only represents the first of many such consolidations. If you are a CIO of any tenure, you've certainly dealt with this before, and so has most of your management team. (The ink on the HP-Compaq deal is barely dry.) A gentle reminder to the team that this is status quo for maturing technology solutions, and that the team has effectively managed these transitions prior will begin to calm nerves, and get the team on track to logically wade through the hype and make rational decisions.
2. Factor the risks and costs of the projected mergers
Now is the time for discipline and rational planning. The team should discuss the various scenarios that may unfold and quantify the potential impacts – with the emphasis on rational quantification.
Indeed, the selection of your enterprise software vendor was a serious one – as the solutions on average cost seven to eight figures, take six to 18 months to implement, will typically last 8 to 10 years, and typically take 12 to 24 months or more to reach payback – especially for the larger projects.
For those who selected one of the platforms at the center of the current merger-mania, although there is certainly a period of uncertainty when the announcements are made, when the dust settles, the vendors must maintain an orderly and economic transition for their customers. The integration of PeopleSoft and JD Edwards is already bearing such fruits for its customers as the best of both organizations will ultimately be integrated and made available to the existing customers. Customers can use these mergers to gain additional capabilities from their vendors that were unavailable prior, to negotiate special pricing and migration protection, and to implement return on investment guarantees and risk sharing on future projects to again help reduce the risks and increase the rewards of IT investments.
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