Merger? Can you 'Just Say No' to ERP Instance Consolidation?
Posted by Mike Beckerle on Mon, May 11, 2009 @ 02:38 PM
What if you didn't have to consolidate ERP systems at all? If you could achieve your business objectives without that?
Many businesses today are built by acquisition. Some companies then set out to combine IT implementations. ERP system consolidation is a major challenge and expense for these companies, particularly if the ERP systems are diverse.
But there are alternatives. Many companies prefer to keep the acquired businesses quite autonomous. If the merged businesses each had sufficient economy of scale already, then what really is the priority to go after fixing and consolidating together systems and processes that aren't broken? So what else is ERP instance consolidation about?
There's one theory that ERP systems are so expensive in an ongoing sense, that eliminating some through consolidation is an improvement over maintaining multiple ones. I am skeptical. If you have multiple ERP systems that are stable and over the hump of customization, then I'm not sure one can justify consolidation just to be rid of stable working systems.
I want to test the idea that it is perhaps actually about reporting and BI. Is it really about obtaining a unified view of the business across acquired divisions?
Unified reporting can be done cost effectively now across ERP systems. It doesn't require that you run an enterprise data warehouse initiative anymore. Targeted and hosted SaaS offerings make this all much lower cost than in the past. We have a customer who has 9 ERP instances from 6 different ERP system types, and we provide them with comprehensive reporting across them. Yes, this took a little while to implement, but it was less than a year in total. I'd challenge anyone to deliver that kind of value faster.
In summary, I seek your comments.
Why are you consolidating your ERP systems or considering doing so? Is it for BI/Reporting or is that one of the important drivers at least? If cross-divisional BI/Reporting was off the table would you still feel compelled to go through the ERP instance consolidation gauntlet?
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