This was a part of Chapter 1 in the first draft of my book Implementing Microsoft Dynamics NAV 2009. It was cut to keep page count down and preserve the environment, but I figure that a few electrons pushed through the optical labyrinths of The Internet won’t hurt anyone, so here you get it, in its original form: The History of Microsoft Dynamics NAV.
One of the biggest absurdities about ERP systems springs from the very word we use so often when describing ERP: integrated.
ERP is an integrated system: it integrates all data and processes into a single application. Different modules look over different aspects of data and processes, but a change in one module automatically reflects in all others.
A fantastic concept. When it was invented, it streamlined processes, boosted productivity and eliminated overhead and error.
So, whenever a new functionality is needed by a company, it should be integrated into the ERP, to benefit from the integrated system. Right?
Wrong.
You can’t avoid customizations. Vanilla ERP is a great first step, and a valuable tool for establishing common language between the customer and the consultant. But in the long run? Probably not. Pristine uncustomized ERP won’t be sufficient, because of the gaps between your way and ERP’s way. Sooner or later, gaps will have to go.
Two most common ways of closing functionality gaps are customizing the software, and changing the processes. You can almost always touch general processes, optimize them, twist them, bend them, make them more efficient or even eliminate them. But when it is about industry specifics that add true value or contribute to company’s competitive edge, customization is the answer.
– “We need a report which groups our sales by product components.”
– “And we need it broken down by cost centers.”
– “And it must show comparison with last month, quarter and year, and with budget and forecast, with indexes and trends. In linear regression.”
– “And it must let you choose if it is by posting date or by document date. Or by shipment date. Maybe some other date as well.”
– “And it must exclude returns, and include only those re-shipments that were linked to original returns in the shown period.”
And it must be a disaster if you agree to half of these.
How do you eat an elephant? One bite at a time. Swallowing it all at once might be tempting as it has all the potential you need to get into the next edition of Guinness World Records. Likewise, trying it with an ERP implementation has all the potential you need to get into to the next edition of Chaos Report. One way or the other.
ERP software is huge. It contains thousands of features potentially touching every single tiniest aspect of your business. Implementing ERP is about introducing change into your company, and change can be evolutionary, or revolutionary. Your pick.