Why More Than One ERP?

Why would a company – even a large company – need more than one ERP system? Why, in fact, does the world need more than one ERP system?  The answer to these questions is the same, and it all comes down to the way the human mind works.

(One reason is described on my permanent page:

 Comparison of Syntactic Media in ERP Systems)

In recent years, there has been an ongoing debate on whether IT has become a commodity or not. While this is not the subject of this article, the author tends to side with those who oppose this view. While I agree that the IT technology may be well on its way to becoming commoditized, the IT business process, being that which projects the business process onto the software of the company, will never successfully be eliminated. It may be that this core IT process eventually is performed by other groups of humans, but it will always be necessary that someone keeps the computer symbology synchronized with the business conception.

Now the most oft given argument against the notion of IT commoditization is that IT brings “competitive advantage” to the larger business by supporting local innovations. This is only partially correct, because there are lots of places where implemented systems support competitive disadvantages, and the companies don’t ever realize it. The argument for “competitive advantage” suggests that an intentional, conscious attempt has been made to create unique efficiencies in a business through IT. This may be true in some places, when a uniquely insightful organization invents a new way of seeing the world and effectively codifies it in their business processes and supporting technologies.  But more often, organizations are simply looking to steal the best ideas from someone else who has proven them to work.

ERP systems are an excellent case in point. Often organizations do not consider the effort required to configure such systems to support their unique vision of their environment. These organizations may even purchase the product with the idea that they’ll just use the software as a lever to install the best practices of the world’s leading companies, replacing their own less effective processes at the same time. These organizations are often surprised when their efforts fail, then they get quoted in the trade press saying how surprised they were at the difficulty of overcoming their worker’s resistance.

The idea that we need more than one ERP because it supports the creation of competitive advantage suggests some conscious effort at creating unique solutions to problems. This may happen sometimes, but usually the design of systems is incremental, almost random. What each group considers important evolves with time. Different organizations will be faced with different crises at different times and in different order. As events unfold, the software systems will be tweaked and tuned to address each problem. The unique order of events will drive the changes. Two organizations that begin at the same point and which face the same issues will still end up with divergent IT solutions because of two critical reasons:

1. The order of events will never be the same between the two organizations, and
2. The individual talents, creativity, insight and political acumen of the members of each organization will lead them to create divergent solutions.

So in fact the question should not be “Why do we need more than one ERP?” The real question should be why we would expect that only one ERP system, in the free hands of different organizations, could possibly remain the same? Over time, even if all organizations everywhere start with the same, singular ERP solution, after not a great deal of time, each one will have created their own unique system out of it. This happens whether or not the changes are competitively advantageous.

When pondering an ERP, how much time is spent considering whether the symbolic models that can be built on top of it will include the existing one? How much effort is taken BEFORE SELECTION of an ERP to determine if the symbols that are most important to the organization can be represented by that ERP? Often, it seems, surprisingly little, considering the expense, commitment and risk involved in the purchase. No, the effort comes after the purchase, when the IT department must contort and twist both the ERP itself, and the very symbol system of the organization – the very CULTURE of the organization – to complete the installation. This is one reason why ERP projects (and many others as well) fail. They were purchased not knowing whether the culture and its symbols could fit within it.