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The Basics of Enterprise Business Systems

Recognizing system differences is critical to your ERP investment.


Be aware of the functional differences, strengths and weaknesses of the types of business systems available before you buy.

There are basically two types of systems offered as Enterprise solutions today.

  1. Strong Accounting Systems that interface to numerous 3rd party “specialized” modules (e.g. CRM, WMS or Service modules).
  2. Enterprise Systems that are targeted for a specific industry and have been developed internally.

The advantages of the strong Accounting system strategy.

  • Commonly provided by your CPA firm or a VAR. Your CPA firm works with your company in other aspects and already has a relationship with your group which can be very comforting.
  • 3rd party modules have been built for almost every industry target, so they may have a solution that appears to fit.
  • If a good accounting system is your priority, your CPA already knows your requirements.
  • A collection of 3rd party modules can be a “best of breed” with ready built interfaces.


Common Disadvantages of 3rd party Add-On Solutions

  • The CPA firm/Reseller may have limited expertise with a specific 3rd party application. If so, you may be supported, trained, etc. by multiple software vendors; possibly opening the door to some finger pointing between vendors.
  • The look and feel of each module will be different. One screen's navigation will be different from the next. The learning curve will probably be longer and more confusing.
  • Interfaces between accounting systems and the 3rd party modules need to be maintained.
  • Juggling various versions of 3rd party application can be problematic. If one system upgrades, the interface and all of the other applications need to be upgraded at the same time.


Probably the most difficult issue with the “best of breed” approach.

  • A relationship between two software companies never lasts forever. The acquisition of new
business relationships, or just expanded capabilityof any of the bolt-ons creating competitive pressures, can dissolve the relationship you rely on.
  • If the relationship between any of the 3rd party applications erodes, you could be left with packages that do not talk to each other.


Why do accountants make poor bus drivers? Because it is difficult to drive at 100 mph looking in the rear view mirror.

Remember Apollo 13? When they needed to pull the landing module and capsule together, they discovered a major flaw where they could not connect. Both systems were optimized for their own purposes but the integration was not given much thought (until lives depended on them).


True Enterprise Systems

  • One Software developer. The User Interfaces is similar throughout the system for an easier learning curve and far less confusion.
  • One support, training and implementation team, no finger pointing and usually experts in your industry.


Common Disadvantages of Enterprise Systems

  • You have to buy the “whole system” which means paying for functionality you might not implement today.
  • Regardless of how complete the Enterprise system is, it may be lacking in functionality that is critical to your firm. You can always interface to a 3rd party application for this purpose, but the interface problems described above would be the same.

Remember that Finance is just a supporting function to the value chain (as is HR, Purchasing, etc.). Whereas making parts adds to your bottom line. Your customers could care less about how you crunch your numbers. What they care about is how good is your product, how much it will cost and “how fast can I get it”?

 

 

Find the answers and get expert ERP selection advice using the knowledge attained from years of business software experience. For additional information, contact BSA Inc. at info@BSAinc.ca.