Posted by: kenwbudd | July 12, 2009

Bad Dreams, Nightmares and ERP Systems

I had the good fortune this week to be invited to the inner sanctum of the European Commission offices in Luxembourg. If it is not the famed ‘Emerald City’ of the European Community, then it is certainly a semi-precious substitute.

The offices themselves are tired, uncomfortable and functional, at best, lacking the sparkle and seductiveness of modern commercial enterprises and high-tech locations. There was a definite feeling of stepping back into Eastern Europe under the Communist regime.

Legacy mud baths

My hosts were very keen to distance themselves from the environment and the legacy ‘systems’ that they had inherited. They were seeking a rapid improvement in their physical situation and in their technological environment and that was why I was there. To help pull them from the clawing and energy sapping mud of stale and redundant legacy systems.

The offshore island of Luxembourg
Luxembourg is an island of prosperity in the vast ocean of unemployment and economic doldrums of France, Germany and Belgium, that surround it. It is the great white hope of some 120,000 people from these other nations that commute daily to work there. Beware of peak time traffic jams at the borders.

This does not take into account those that travel from much further afield, living in hotels for most of the week and travelling home on weekends. Expanding the catchment area into the UK, Spain, Italy and Eastern Europe.

My brief but interesting meeting with the technological worker gnomes of the Commission was both enlightening and concerning. The fear of legacy systems seemed out of all proportion to their overall threat and effect, a bit like the extreme measures that the UK government is currently taking against the H1N1 virus outbreak.

Bad Dreams and Software Solutions

The urgency with which these issues are driving the tactics, has more to do with political pressures than sound economic strategy. The pressure to appear active and ‘moving’ on the issues far out-strips the effectiveness of the results achieved. Never mistake ‘movement’ for ‘action’, or ‘tactics’ for ‘strategy’, they are completely different entities.

The headlong rush to implement a ‘tool’ that will absolve and absorb the responsibility for good management, is the ‘holy grail’ of all government bodies and corporation managers. This makes them very vulnerable and accomodating to the consultants’ pitch to sell ERP system solutions, an SAP or a Tivoli, snake-oil software that will ‘assume’ command of the enterprise and take all your problems away.

Unfortunately, although ERP systems are sold as ‘solutions’ by ‘solution providers’, this is a ‘misnomer‘, an elegant piece of marketing. An ERP system will not solve your problems but they will capture most of them in the one location, inside the ERP system itself. Does this help you?

‘A fool with a tool, is still a fool’.

Operational Legacy systems
There are a number of reasons why a ‘legacy’ system remains operational; a) the management has not addressed the impact of the structural issues surrounding it, b) it is still economically viable and change cannot be justified on the grounds of a good Business Case and ROI, c) the outlay and investment in the original system has not been ‘realised’.

a) The structural issues will not be resolved by shoe-horning a round-pegged ERP system into a square-wholed enterprise. Bite the bullet and address the structure first. In this way you have greater chance of success, by overlaying and mapping a new ERP system into an organisation, rather than inflicting one.

b) Unjustifiable ROI and Business Case. Do the maths, and if this is the correct answer, stick with it. Stand firm. Do not go back and change the question to fit the consultants’ solution. This way monsters lie!

c) If the outlay and investment in the original system has not been ‘realised’ then loading another burden on top, with additional gearing, will also not work.

Who is the Villain here?

Rememeber that, although today your system is shiny and new, another year or so down the road you will have to face the withering criticism as to why your latest ERP ‘rocket-to-the-moon’ system is now overloaded, running out of power and falling back to Earth. Preparing to take its place as your biggest ever obsolete ‘legacy’ system.

‘I have a garage full of tools to repair my car. Now, if only I knew why it wasn’t working!’

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