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Why
traditional ERP solutions are NOT the best
solutions for emerging markets like India
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Bharath
Gopalakrishnan |
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The density of presence of entrepreneurs in a country like
ours is amongst the highest (if not the highest), and this
is without counting the agricultural entrepreneurship. As
I write this, there are newspaper reports that ë India
will become the worldís third largest economy equaling
or surpassing Japan sometime this year ñ much earlier
than previously projected..í India is the best example
of an emerging market, and this preamble is necessary, not
just to pay tribute to the entrepreneurs who are participating
in this economic boom, but also to provoke some thoughts on
the subject of this article.
The fast paced market or business space in India is pretty
much like the traffic we all wade through at the beginning
and end of each work day. Unpredictable, and yet one filled
with opportunities. This analogy is apt for mid-sized businesses
and businesses that are above this threshold, in India, which
are constantly evolving in fine-tuning the following:
Go-to-market strategies which often result in change of business
models
and distribution models.
Internal
and external processes as a result of experiences primarily
aimed
at shorter and more efficient process
cycles.
Work flows to adapt to the above.
And all other components that make the business plan for the
business.
When businesses look for an ERP solution, their primary objective
is to bring in a sense of knowledge management resulting in
quicker, efficient and informed decision making, which helps
run the business better, while addressing the pain-points
of the various links in the business chain. Business owners
know one thing well - how to run their business, for their
environment (read market-space of their geography) and when
they want to implement an ERP solution, they want the ERP
solution to facilitate this. It is not the other way around.
Instead, from what one has been constantly seeing, ëtraditionalí
ERP solutions possibly more suited for developed and steady-state
markets, first aim at strait-jacketing the business model,
the internal processes, the associated work-flows etc to suit
the traditional ERP being offered. This is the very pain-point
that the business is grappling with ñ the process of
change that results from growth !! Where does this path of
ëtraditionalí ERP lead to?
The business adapts to the ERP
Do not go this path. Ensure that the ERP solution is flexible
and is designed intrinsically for
iterative change in processes and work-flows
Long Implementation times
When the first step in implementation is to change the way
you do your business, you are
looking at indefinite and prolonged solution deployment cycles.
Instead, look for a solution
that can go live on day 1 of delivery and can dynamically
and iteratively adapt with your
business, and its constant changes.
Visible and Hidden costs of ownership
Many of the ëtraditionalí ERP solutions reveal
a purchase cost and a host of other costs which are varying
depending on number of users, of CPUs, of database licenses
you need and changes required for iterations if required after
solution deployment due to their fundamental design and not
being adaptable to iterativeimplementation. This leads to
cost of ownership several times the cost of the user license
costs. Know all the costs involved before hand that you will
incur till the solution reaches a stage where it adapts to
your business needs. And please value the cost of time taken
as well, to reach this stage.
Business discontinuity
This is very key and vital in our environment. We are all
used to power cuts/trips in our offices and this is in spite
of having enough ërobustí UPS devices. In the
event of a power failure, which could at least sometimes,
result in a database crash, what is its impact on the business
which is dependent on the ERP system being used ? If the answer
is several days, then I believe the business is heading for
trouble. The ERP for the India environment ( and other markets
like India) should offer the shortest down-time in its business.
Look for all aspects in the ERP solution that are suited for
the best Business Continuity. Doí traditionalí
ERP solutions offer this ? Please ensure you verify this!
These are only some aspects that have been put forward. There
are quite a few more that business owners should look out
for when selecting an ERP solution for their business. One
thing IT has been successful in doing to businesses all around
is to throw a lot of jargon. The ERP world is no exception.
How many of these are myths? Plenty. For those interested,
I would love to explain and this would befit a half-day seminar
by itself.
As a final thought, let me leave you with this: When we buy
a car in India, many of us look out for its adaptability to
Indian terrain, traffic maneuverability, parking challenges,
serviceability, visible and hidden costs. And all this changes
everyday. We do not just look at the brand. Do the same for
an ERP solution. Look out for how it suits your business for
the Indian environment where you are constantly changing and
evolving due to Growth. Remember, Growth means Change, and
your ERP should be adaptable to this realistic paradigm. |
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