ERP technologies: "haute couture" against real requirements

ERP «haute couture»

The champagne, "parties", interview eulogizing articles in the press and general impression of a boom. How you think what there is a speech about? About a week of haute couture? No. About another action in the field of ERP solutions.

Having got accustomed attentively, you wonder as far as the market of ERP systems is similar to the market of "haute couture": everywhere continuous "exclusive" and "season new products". I think that many got into a situation when you come into "boutique" and you understand that in it you will purchase nothing, but it is so simple not to leave therefore you listen to the seller up to the end. In such situation there is most of visitors of various seminars and also participants of the different conferences and congresses devoted to these or those aspects of implementation and use of the systems of the ERP level.

As well as in a case with fashionable things, ERP solutions and services in their implementation have not only "unique" qualities, but also the "exclusive" price. Therefore approach to each client is individual, in many cases not the number of projects, but their cost is regarded as of paramount importance, price discrimination is actively used. As they say, "the rich have whims".

But one case – large business for which to invest several hundred thousands of dollars and does not make any problems any more. And what you will order to do to other enterprises? They need such solutions not less, they need effective tools for business management too.

ERP is not luxury?

The clothes "haute couture" always have an alternative, – often not worse and much more practical, – therefore everyone has an opportunity to select by the opportunities. What do we see in the field of ERP applications?

Still the most widespread alternative was automation of business by means of make-shifts, such as office applications (in particular, Excel) and "paper" document flow. To this day also the "self-written" information systems providing the solution of a certain part of business challenges are used. Some firms make a start from automation of accounting and try to manage business "on accounting postings".

And ERP vendors persistently did not want to notice SMB, – that part of the market which needs simple and available solutions, – fondly believing that the business can be built only on automation of large business. However saturation of a segment of "heavy" solutions in practice showed inaccuracy of this position and even the largest solution providers call SMB the "strategic" consumer now and try to offer something that could interest the enterprises in this segment.

"Business lunch" for customers

ERP systems for SMB should have price availability at rather developed functionality, except for those which are required for exclusively large business (for example, management of holding structures, consolidation of financial data, etc.). The task provide similar solutions can be solved, essentially, in four ways: ensuring low cost value of development of systems, "truncation" of their functionality, reducing costs for implementation or use of the Software-as-a-Service model.

The first way is traditional for domestic developers and also foreign which were initially focused on a segment of medium and small business. Their solutions are, as a rule, quite available at the price, but have some shortcomings. For the systems of domestic development they consist, according to many market participants, in the insufficient width of functionality. Foreign solutions for SMB very often have no "internationalization" and work only at English and also only within the local legislation of the country of developer company.

Three other listed to a way use large vendors whose solutions have a full range of functionality and do not depend on the local legislation and a state language.

As a result today in the market two alternative ways of work with solutions of the class ERP are offered, in fact: use of ERP services and use of "boxed" ERP solutions. Both options are focused on reduction in cost of ownership for customers, but implement it absolutely differently, having the advantages and shortcomings.

«ERP dot com»

As for lease of business applications, direction, undoubtedly, perspective.

It is possible to refer complete outsourcing of the solution, i.e. absence of "headache" at the customer to pluses of this direction.

The main thought of outsourcing – cost reduction, but in our country, for some reason, it not always so for this reason many companies prefer to have "". Also it concerns everything, from cleaning of premises, before IT services. Though, of course, in some situations outsourcing can be interesting. No, for example, sense to keep in staff of the IT administrator if at office no more than ten computers.

Work in the mode of lease of the application assumes, first, existence of high-quality communication, and, secondly, high credibility to the provider, and at us in the country both with that and with another of a problem so far.

And nobody cancelled the questions connected with implementation of the rented applications that, besides, can lead to sharp rise in price of the project.

Anyway, it is not possible to carry out full contrastive economic analysis of the rented solutions and "boxed" yet, first of all because of rudimentary market situation of lease of applications.

Solutions "from a box"

"Boxed" solutions began to appear in the market relatively recently. Initially, basic functions which were implemented in such systems were: accounting and the fiscal reporting, and other functionality was implemented so that it was simpler to use "Excel". However with development of "boxed" ERP systems their functional filling and technical capabilities amplified and today among them there are already copies which by the opportunities will argue with the implemented solutions. Today some copies of "boxed" solutions already allow not only to keep full, end-to-end account of business, but also to manage business and to make decisions that still was a prerogative only of "heavy" solutions.

And what is not less important, based on such solutions it is possible to organize unified information systems of scale of all company that still was the main headache of business as on different sections of business processes absolutely different products which service and use attracted additional costs due to double entry of data, lack of cause and effect communications, bigger number of errors of users, etc. were used. And at all this the cost of ownership of "boxed" solutions remains available even for small business.

Many consider production of "boxed" solutions unpromising as users of such solution need training, and a system, as a rule, – configuration changes. It should lead to significant increase in original cost and do acquisition of the software product unprofitable.

Certain producers of the "boxed" systems learned to solve this problem by means of video instructions and other e-Learning methods. By the existing estimates, it allows to reduce the customer's costs for training and configuration change of a system to 80%, thanks to the best availability and susceptibility in comparison with traditional (text) instructions and the built-in system of the help.

Besides, use of software products for management of business activities by analogy with office programs is clear and usual for domestic medium-sized and small enterprises, and they have no time and funds for serious reorganization of business and/or the software solution and also for adaptation to effects of this reorganization.

Simplicity, availability and flexibility

For most the SMB enterprises an exit only one – the "boxed" ERP systems having a certain flexibility that allows the customer  to change independently  a configuration,  without  involvement  of expensive developers. What sense offer the enterprise from 20 employees the heavy, implemented solution if this company is engaged in trade or simple production? Business processes of such company are simple and clear, and they are automated within two-three weeks.

It is sure that emergence of the competing technologies does well only to the enterprises which management wishes to implement in the company of a management system. Trends of the last time made business applications more available that cannot but please and the quality of solutions grows, besides, owing to the competition.

The market of "boxed" solutions grows, also the quality of solutions grows, as a result in the market there were available, flexible solutions allowing to increase considerably at competent implementation quality of business management, to make business processes of the enterprise really transparent, to accelerate process of their passing that cannot but affect service quality of customers.

The main achievement of the market consists that enterprise management systems stopped being available only favorites that can give a new impetus for further development of technologies of business management.

Alexander Popov, [1]AVA Systems