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ERP makes a comeback

Most big companies rolled out their first ERP systems more than a decade ago. Now one in four businesses plans to upgrade or roll out a new ERP system

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With more than 100 employees in 16 offices, RHC is now approaching the $10 million mark for revenues, but Cunningham says it has yet to fully tap the capabilities of NetSuite.

To compete with SaaS solutions like NetSuite, on-premise ERP vendors have had to become faster and more flexible. SAP has begun marketing what it calls its Rapid Deployment Solutions (RDS), which promise to get a viable ERP system up and running in as little as 90 days, says Bill Bowers, VP of Global Field Enablement for SAP Rapid Deployment.

"Today's ERP customers want bite-sized, predictable solutions that provide predictable value," says Bowers. "They want to know they're going to get what they paid for. With RDS, we're coupling ERP with more content in the box about how to discover, understand, and enable our solutions."

Bowers says SAP is also working more closely with integrators and hosting providers to offer hybrid solutions -- attempting to combine the power and customization of on-premise solutions with the flexibility of on-demand.

"The obvious question is: How can we make on-premise solutions more affordable and easier to deploy?" he asks. "We're looking to reduce the software-to-service ratio to be more in line with companies like Salesforce.com."

But getting complex, customized solutions in place remains far from a trivial task, warns Forrester's Martens.

"The key argument for SaaS is that it's faster to implement," she says. "On-premise vendors need to be able to demonstrate they can move fast and deploy a system in six to nine months, so they're coming in with more milestones, sitting down with customers at the beginning to understand their business processes and how those relate to ERP processes. RDS can offer the ability to start the process with everyone understanding what's going on. But whether they will actually get where they say they're going and on time is debatable."

On the other hand, says Martens, SaaS comes with its own challenges: "Companies going the SaaS ERP route need to have confidence that the apps can support and carry through the kind of customizations they're used to making to on-premise ERP." In practice, that's not always possible.

Lessons learned
Implementation and delivery options aren't the only things that have changed over the last 12 years.

Enterprises have learned a few things, too, about what practices to follow and pitfalls to avoid. And though EPRI's original ERP rollout was a success, says Dotson, it's doing some things differently the second time around.

For example, EPRI is starting with a clearer idea of what its business processes are than it did 12 years ago. It engaged a well-respected consulting firm to help it steer clear of common ERP traps before getting too deep into the process. And all of EPRI's stakeholders have been actively involved in whittling the choices and picking a winner (whom, given EPRI's nonprofit status, Dotson is unable to name).

"It wasn't just an IT decision," he says. "We had a lot of people engaged in looking at it. Ultimately business and IT came together and decided on the same solution."

At RHC, Cunningham says he met with the NetSuite team for 90-minute conference calls twice a week for six months, mapping out all of his firm's processes before making the move.

"They really got to understand our business flow," he says. "And that gave us time to think about what we were trying to do, too."

Dotson says EPRI is on schedule to roll out the core components of its new ERP system in July, about nine months after initiating the deployment. HR and CRM components will be added at a later date.

"We're already starting from a better point," he says. "We fully anticipate to be equally successful this time, too."

This article, "ERP makes a comeback," was originally published at InfoWorld.com. Get the latest insights on ERP and applications at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.

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