The last time I bought a new car my out-the-door price was a full 50% above the manufacturer’s “starting at” price; there were just so many options it was very difficult to say no to. Last winter, that extra $400 I paid for heated seats seemed like the best deal in the world, though. Choosing a new or replacement ERP system presents a similarly dazzling array of options. And like car shopping, it is almost always cheaper and easier to load up on everything you need rather than try to add functionality later.
Which ERP System Modules Make Most Sense for Your Enterprise? (Part 1)
There are at least a half dozen modules, or applications, most companies will want to include in their ERP system implementation. Many software vendors will argue that all those modules should be purchased pre-integrated and pre-tested from the ERP system vendor. Best of breed software vendors will retort that their individual module is far superior and that new technologies, like service-oriented architecture (SOA), make it relatively painless the integrate third-party solutions with the basic ERP system backbone. We can’t settle that debate here, but we can point out that acquisition and implementation costs, not to mention ongoing support and annual license fees—the total cost of ownership—will definitely be lower when you choose all your applications from the same vendor.
Which applications you select will depend on your industry. Wholesalers will make warehouse management functionality a top priority but process manufacturers might pass on that one altogether. Labor-intensive industries may opt for human capital management, while manufacturers will be drawn to supply chain management. Nearly all companies, though, will specify customer relationship management as part of the reason they are undertaking an ERP system evaluation and will be eager to implement the financial management capabilities.
Many industries are specialized enough (process manufacturing, wholesale distribution, service industries) that ERP systems built from the ground up to best serve their unique challenge are called for. It always makes sense to do business with an ERP vendor that lives in your space and understands the nuances and insider argot of your industry. And, if there was a “best reason” to go with a best of breed applicationover a pre-integrated module it would be to get capabilities uniquely necessary to industry idiosyncrasies and regulatory requirements.
This series will briefly explore each of the most widely used modules to provide a top line guide to what features and benefits they bring to the table.