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Postmodern ERP for mid-sized businesses

29th Jul 2016
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Postmodern ERP, as defined by Gartner, are ERP solutions made up of multiple integrated ‘best of breed’ apps, rather than a single software suite.

Response articles from after-market apps (for whom disintegration is a great selling point) are quick to point out that niche systems can better meet the market’s rapidly changing needs.

Although we’re always looking for new, better ways to work, the Greentree team has a slightly different take on the issue. We think postmodern ERP is great for large businesses who have the in-house teams and budgets to make sure the disparate apps are truly integrated. Likewise, smaller businesses lack the scale or business complexity that makes integrating a series of an apps an issue.

It’s those mid-sized businesses that are problematic – how do you capture the benefits of best-of-breed apps without overloading your IT department (if you have one), or losing the advantages of a properly integrated ERP system?

It’s a balancing act to capture the best of both worlds. We’re not sitting on the fence necessarily – it’s just that from our vantage point, the grass looks green on both sides.

The risks of full disintegration

The business community has spent many years pushing for smooth, effective, seamless integration for a reason. For a mid-sized business, integration is the holy grail – when everything’s working together perfectly, mistakes go down, efficiency goes up and profit grows itself.

That’s why we’re wary of endorsing full disintegration – particularly if it hasn’t been well thought through. Throwing out your perfectly functional – and customised – ERP system in favour of a loosely integrated set of applications could end up being more trouble than it’s worth.

One major issue is the amount of work and expertise needed to create a Postmodern ERP solution that actually functions. If you’re a medium-sized business without a large, dedicated IT team, it could be near impossible to find and integrate the best, most effective cloud-based apps without considerable outside help. Many business owners assume that applications will just fit together without much effort, but that’s not always the case. Some providers put genuine effort into making their products work with other software, while others simply release an app and leave it up to the business to sort out the details.

‘Traditional’ ERP providers do that tricky work for you – the product comes to you already integrated and functional, with years of testing and experience backing it up. If you choose to disintegrate completely, you’ll hit another issue - if you’re working with a range of apps and they’re not quite working together, which app’s suppliers do you call?

Data and decision making

Losing access to centralised data is another issue with the postmodern approach. One of the major benefits of ERP software is having a central point of truth in your business – when all your staff in every department use the same software, they’re all working from the same information, which is usually updated in real time.

With a decentralised, disintegrated system, the old issues of siloing and data discrepancies come back into play. Integrating multiple apps means that you have multiple entry points for information. Your IT team will need to find ways to reintegrate data at every point – which isn’t easy to get 100% right.

Syncing data between systems is hard, but protecting your process integrity is even harder. You need to make sure your rules and processes are applied consistently across the business, even if different departments are using disparate applications. For example, if you’ve got a separate system for workers out in the field, with a different level of detail from your core system, then you’re potentially losing key data and affecting your operational intelligence.

Both sides of the fence

Despite pointing out some of the more significant issues, we’re not saying Gartner’s postmodern ERP concept is a bad one. In fact, we think there is a way to get the best of both worlds – the benefits of integrated ERP with the ability to add apps as needed.

Think of building a car. It would be very hard to make your own from scratch - even if you used the best parts from different makers. The parts wouldn’t be designed to fit together, so you would need a specialist to help you make alterations and create connectors to join the different parts together. And in the end, you’d probably still end up with an odd looking vehicle that wouldn’t work as well as your standard car.

But you can buy a great car that suits your needs then add extra components, as you need them - a new stereo, flash new seat covers, even those spinning rims if you’re so inclined. The key thing is, the new parts need to work with the vehicle - you’re not going to put flashing rims on your boring work car, or a pricey, window rattling stereo system into your tiny hatchback.

A seamless, customised ERP system is like a reliable, well-designed car. It does what it needs to do, and all the parts work together. Integrating outside apps is like adding those extra elements that really make it yours – without affecting the functionality of the car itself. In business, that might mean integrating a very specific app designed for your industry – but only if it’s worth doing.

Here are some situations when integrating a new app could be worth your while:

The vendor has already done the integration. For example, Greentree’s business intelligence module, Greentree IQ, is the result of a seamless integration with Qlik– we even use it internally. The cost of an integration like this would normally be way out of reach for most mid-sized businesses.

It can be integrated very easily in-house. Have a chat to your IT people about what ‘easy’ looks like for your business. Greentree Partners do a lot of integration using tools like API and import managers.

When the benefit is so significant that it’s worth the hassle and expense. It might be worth spending some time and cash if you’re gaining key functionality or solving a major problem.

The bottom line is that with the right core ERP solution, you can still integrate best of breed, niche apps, without losing all the benefits that make integrated ERP software so valuable. For most medium-sized businesses, this best-of-both-worlds solution is the best way to get what you need – the data and simple integration of traditional ERP, with the niche services that other apps offer. The trick is to strike a fine balance, so you’re only adding apps that will give you a significant commercial advantage and ones that aren’t a pain in the back to integrate.

Harry Mowat is the UK Managing Director of Greentree Software, a global ERP software provider founded in New Zealand. Greentree is focussed mid-market businesses, and is seeing particularly rapid growth in the UK.  

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