Internal developing has a friend

Jeffrey Shifman knew that Pembroke, Ont.-based Superior Electrics Ltd. needed a new ERP system. Purchase orders were difficult to track and cost histories were kept on cards.

Shifman, vice-president of systems for Superior Electrics, said he started looking in earnest for a new ERP system in late 1998. After attending the Software Solutions show in Toronto, Shifman started to think the best way to solve his ERP problems was to do it himself.

“The majority of the ERP vendors (at the 1998 software show) did not want to talk to me,” Shifman said. He added that even the “cheaper” vendors were talking about implementations in the $100,000 range and that would have been a lot for Superior to pay for something that was not likely to solve all its problems.

The wish list Shifman and his team had created included getting rid of inventory shortages, getting in front of purchasing, doing some more analysis and figuring out better purchasing strategies.

Shifman decided to try his hand at developing ERP solutions for the company on his own. In April 1999 he started designing and coding the system and in July 2000 Superior implemented the first stage: purchasing and inventory. Since then Superior has implemented the second stage – sales – and Shifman said he’s now looking to start in on labour accounting. “For us it’s a good way to get up and running with low risk and everyone can understand each piece as we add it,” Shifman said. He said the vendors seemed to want to keep adding unnecessary modules to its solutions, which made them big and expensive.

Superior Electrics was able to cut staff and managerial workforce as a result, Shifman said. And as he was doing all the developing, there was no need to hire anyone new.

Keeping everyone involved in the project was key, he added. Every time he designed one step, he would bring in all eventual users for input and then make changes. This reduced training time, as people already had a feel for the systems.

Shifman built the two-tier system on Java.

While Shifman has become a strong proponent for internal development, it has its detractors too.

Edward Hung, manager of advanced research and technology, information technology for the City of Richmond in B.C., said his municipality made a decision to not write its own software.

“If there are upgrades, we can go directly to the vendors,” he said. “The biggest savings for us is staffing.”

In-house developing is a good idea if you have a very specialized need, but Hung was surprised to see it being done for ERP.

“I don’t see why anyone would do those systems internally.”

Ray Tayek, vice-chair of the Orange County Java Users Group in California, said it’s usually cheaper to buy than build and maintain for horizontal applications, but agreed that for certain vertical applications, with the proper in-house expertise, internal development makes sense.