PROACTIS Blog

Comment Re FT Article “ERP: A convincing case must be made before investment”

Charlotte Sutton
Charlotte Sutton,
PROACTIS
Recently, in a special FT report the challenges of ERP implementations was discussed. "Implemented poorly, ERP implementations can quickly become a CFO’s worst nightmare, blowing a hole in the company budget and leaving staff struggling to perform day-to-day duties. After more than 20 years of ERP implementations, the disaster stories keep coming."
In response, Simon Dadswell, Director of Marketing, PROACTIS commented:

Traditional, ‘heart-and-lung’ ERP-style implementation projects do not provide an effective answer to organisation-wide Spend Control. They are too costly, time-consuming and do not take into account existing IT complexities and process issues:

Consider the case of an organisation with multiple locations and business units…

They typically have:
  • Multiple financial information structures across units 
  • Varying information systems (ERP & Financial)
  • Varying size and cultures
  • Operations spanning multiple time zones
  • A higher likelihood of organisational change, and 
  • Higher complexity of change management
In addition, within the realm Spend Control they have other specific challenges including:
  • Varying procurement maturity and approaches across different business units
  • Varying spend classification schemas
  • Separate supplier bases causing lack of volume consolidation etc.
What is required is a range of Spend Control applications, inherent application design and overall flexibility that can “inject-life” into ageing ERP-infrastructure; to maximise existing IT investments - cloud-based solutions that can be deployed rapidly and provide a ROI in just one fiscal period.

This is more about agility, adoption (employees, suppliers) and incremental process change/metric improvement than heavy multi-year ERP implementation projects.

These solutions must provide multi-location, multi-business unit, and multi-national organisations with the tools to: integrate all aspects of Spend Control (source-to-contract and purchase-to-pay), standardise policies and processes, improve operational efficiencies and adapt to organisation change.

In ANY organisation, Spend Control is a journey. In a large multi-location, multi-business unit organisation, that journey requires a support system with the flexibility to help Finance and Procurement “get started”, improve incrementally, and effectively respond to change over time.

That is a far cry from traditional, large-scale, multi-year and costly ERP-style implementation projects!
 
 
 
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