Vendors left out as users turn to in-house ERP

Develop enterprise resource planning (ERP) applications in-house to avoid vendor lock-in and associated data integration issues, says AirRoad Direct Pty. Ltd.’s national client manager Phil Newman.

AirRoad, a nationwide transport and logistics operator, has developed an in-house ERP and SCM (supply chain management) system which is Internet- and wireless-enabled.

“In the beginning ERP was associated with materials resource planning; now it seems to be an all-encompassing term for too many applications,” Newman said.

“AirRoad Distribution designed and built its own ERP. We (like just about everyone else) have other applications that contribute to the resource planning.” Newman said the challenge is to have one integrated ERP for the entire enterprise that is fully Web-enabled. “How this seamlessly integrates with partners is something else,” he said.

“We have looked at one ERP from one vendor and the lock-in is a problem as well as security of data,” he said.

“Do we continue to develop our own ERP to keep in line with best practice? You will just have to wait and see.” Newman said enterprises place “very little” importance one vendor’s ERP system.

“Although we always look at what is developing, one of the problems is that as ERP is developed, there is need for data transfer to non-ERP applications,” he said. “It becomes a never-ending merry go round.”

Newman sees little differentiation between ERP brands, but said there are now some that show signs of being more services-orientated than previously.

“ERP from any vendor has some time yet to be a compelling product for me,” he said. “Consolidation may accelerate this process.”

SAP Australia and New Zealand’s marketing and alliances director, Len Augustine, said regularly contact with customers and educating them about what to expect from ERP is key to resolving its perceived difficulties.

“We talk to customers quarterly and track customer satisfaction,” Augustine said. “It has been going up by three per cent and is taken very seriously. Our representatives follow up any dissatisfaction.”

Locally, SAP claims its revenue is divided between 70 per cent repeat business and 30 per cent new business.

Augustine said a lot of ERP projects were probably “big bang Y2K” projects which put the implementing company under a lot of stress, corners were probably cut, and the “nice to haves” were left out.

Questions like “Did they get as much value as they though with ERP?” and “Did they cut change management training?” all need to be asked to determine why the customer is unhappy, he said.

“If you skimp on change management you tend to get into trouble.

“And the uncertainty in the market does contribute to problems.”

Augustine said nowadays everything is done in six-to-nine month projects and the market is mature but not saturated.

“Bigger vendors are working with customers and can constantly go back to customers to solve new problems,” he said.

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