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ERP makes a comeback

Dan Tynan | Dec. 21, 2011
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

"Their businesses are becoming more complex, they may be growing very fast or have operations in more than one country, and they need to bring more discipline to their business processes," she says. "We're seeing more SaaS deployments, where SMBs don't have to get their limited or nonexistent IT staff involved. That makes it a bit easier for them to make that move."

But even large-scale ERP vendors have become more responsive, promising faster and smoother rollouts, hoping to put the multi-million-dollar failures of the past behind them.

Speed vs. strengthFor years, Recovery Healthcare Corporation (RHC) used QuickBooks to help manage its operations, which provide support services for the Texas criminal justice system.

But four years ago, the then-15-person firm moved to NetSuite. The reason? Simplicity, says Vickers L. Cunningham, a retired criminal district judge who is now COO for RHC.

"We are in the people business," says Cunningham. "We don't want to own servers; we don't want to worry about backups and maintenance. We don't have an IT department and we don't want one. We just want to plug into the Internet and go."

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."

 

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