ERP integration nightmares?
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This comes after furniture chain MFI issued a profits warning after the botched rollout of an SAP-based supply chain system that led to customer orders being sent out incomplete; the problem will now cost £30m to correct.
Integration issues appear to have been the key to the problems, with SAP claiming there have been no issues with its software. We asked our CIO Jury if the complexity of integrating ERP systems is getting worse and hampering projects.
Just over half--seven--said 'yes' and five said 'no'. Frank Coyle, IT director at John Menzies distribution, said integration issues become a problem when businesses start customizing ERP systems.
"ERP systems are at their most effective when the business is able, and willing, to change their procedures or mode of operation in order to suit the package. The more the deviation from the standard, the greater the risk to the business," he said. "In addition, this risk is revisited each time there is an upgrade to the standard package. Fortunately, there now appears to be a realization that, especially for mature businesses, one size does not always fit all."
Front-end customization is increasingly time-consuming and complex but web services could hold the answer, according to Dharmesh Mistry, CTO at edgeIPK.
"I believe integration is a major factor today; however, as the world moves towards web services this will be less of a factor," he said.
Others in the 'yes' camp cited integration as the key stumbling block, usually when it is combined with other factors. Kevin Fitzpatrick, CTO at Manpower, said that while integration issues aren't an increasing issue, project management is.
Phillip Jones, CTO at easyGroup, said integration issues are inevitable in anything as significant as an ERP rollout but argued the IT group should be capable of confronting and planning around them.
"Circumstances will vary from organization to organization but ultimately the IT group must set realistic expectations about the nature and scale of the work involved so that a business can satisfy itself that the projected long-term gain will exceed the likely short-term pain. Companies must also recognize that such a profound level of organizational change will leave little room for any other significant change initiatives, whether IT or non-IT related."
While integration is an issue, Pete Smith at Inmarsat said it isn't always an IT issue.
"I think the main issue is that companies fail to realize just how much they risk when moving to an ERP system. Problems often arise because companies do not realize that these systems require changes to the way people work. Many ERP projects fail because these changes are usually poorly communicated after the system has gone live," he said.
Today's CIO Jury was…
Jeremy Acklam, IT director, Virgin Trains Graham Benson, information services director and CIO, Screwfix Direct Dr. Stuart Brough, director of IT services, University of Strathclyde Frank Coyle, IT director, John Menzies Distribution Kevin Fitzpatrick, CTO, ManpowerDerek Gannon, IT director, The Guardian David Jemitus, head of IT, Government Planning Portal Phil Jones, CTO, easyGroup Dharmesh Mistry, CTO, edge IPK Rory O'Boyle, head of IT, The Football Association Pete Smith, director of IT and telecoms, Inmarsat Gavin Whatrup, IT director, Delaney Lund Knox Warren & Partners
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