The Three-Letter Acronyms and their nuances- Does the customer really care?
Lots have been said and written on this topic by various authors in various forums- including in this forum. Will ERP gobble-up EAM market completely in next 5 years? Where does PLM stop and ERP begin in enterprise architecture? Which of these is more functionally rich for asset intensive industry? The debate goes on and on.
The question I would like to put forth here is - Are these debates relevant anymore? In other words, how relevant is this debate to the end-user of these applications?
For the end-consumer on the floor, these are just software packages. They will go for that package which will make their life simpler- which will result in minimal disruption to their normal operations and are easy to use. I wonder how many of them really care if the UI (User Interface) they are working on is called an ERP or EAM or by any other acronym.
In my experience, I have seen that when it comes to choosing the enterprise applications, the ultimate decision makers are the business (users). The IT teams, in most of the organizations, at best, are just executioners of the IT strategy. The budget comes from business and therefore they make the final call- irrespective of their competency to do that. Consequently, the success or failure of any IT initiative largely depends on the muscle-power of the business-sponsor, who leads the initiative from business side. In reality, the functional richness of the application plays only a secondary role in determining the adoption levels or implementation success.
Many of the enterprise applications that I have seen implemented are only sub-optimally used. In some of the cases, hardly 20-30% of the available features are put to use. The scope of usage, strangely, is determined by how much the business sponsor "understood" the application features, more than any other considerations.
Bottom line- no matter how enterprise application designer has packaged the software with rich functionalities, no matter whether the application is called ERP or EAM or any other 3 letter acronym, the success of an implementation comes from how well the change is managed and how easy is the application to use.
I know that not everyone is going to agree to this point of view and this is going to raise few eyebrows. Keen to hear other perspectives.
Comments
While this may be true, it could also be the case that there needs to be a closer relationship between it and business. It should be able to influence the final business decisions. Otherwise there is no point having it at all.
Posted by: Shariff Dinah | December 10, 2010 7:16 PM
Certainly no business would use 100% of ERP or EAM. These packages are built to take care of all types of requirements and businesses can choose the solution which suits their requirement. So I would not call an implementation sub-optimal if it is utilizing only 20% of the package.
Posted by: Praveen Agrawal | December 13, 2010 9:48 AM
Sir,
On the face of it, it may look like a marketing hype by the product-based companies. I will give it to you. 50% involves critical marketing hype. But if you watch the bylines carefully, one can see the reason for the existence of the product and its differentiation from the other. It is more of evolution.
Few years back, one of the companies that I had worked for embarked on two initiatives
1. choosing an EAI tool
2. choosing a BI tool
we had invited 4 main vendors and did a thorough POC. We validated our requirements against their functionality cheat sheet and then arrived at the product that we want.
It is true that business sponsor makes the main decision but he depends on the IT to advice. The present day business sponsors are aware of the critical IT support required for the product without which the product will collapse.
Posted by: Rangarajan | December 14, 2010 5:42 AM
Thanks for all your comments.
Shariff: I agree with you 100%. I also wish that is the case. As a matter of fact, in some of industries like Banking and Retail, wherein IT plays a much more strategic role, CIO’s (and IT department) do call the shots.
However, unfortunately, this may not be the case industries where IT doesn’t play that crucial a role. An indirect indicator of IT-clout in the company would be look at who does the CIO report to (is it CEO/Board, etc or is it CFO or below!) and IT spend as a % of revenue (it is in the range of 4-5% of or it is in the range of 1%).
Praveen: I agree- 100% usage is very “ideal” and not practical. But I am talking about cases where not even the basic functionalities are put to use due to lack of awareness….to site few examples… I am personally aware of cases where a tier1 EAM package is used just to keep track of assets- nothing else; SAP-SRM is used only for shopping cart- never used for spend analytics! Reason - the key users never understood the spend analytics function of SRM. The BI tools are used just for creating Excel downloads. The actual slicing and dicing of data happens in Excel -the old habits seldom die. If you are planning to use an expensive BI tool just like an Excel sheet, then why to spend dollars on that? Instead go for MS-Excel! If you need just a UI for creating shopping cart, develop one locally using some language- why invest on SAP-SRM.
Rangarajan: I am OK to give 50% allowance for marketing hype. But is that the going %?
Yes, I agree, if you watch the byline carefully, you can see the reason for their existence. The mute question is -How many end-users are watching the bylines carefully?
Posted by: C. N. Sajit Kumar | December 14, 2010 6:19 AM