ERP- Does the shoe fit yet?

BANGALORE, INDIA: CIOs may not have the patience and passion that a woman’s shopping-savvy eyes are born with, but talk about the perfect pair of shoes, and we are still searching.

The journey in question here is ERP and even as the market is flooded with every genre imaginable — dancing shoes, party shoes, skating shoes, swimming shoes (name the vertical, and you have an ERP suite for it today); yet the shoes don’t fit the way the wearer would wistfully wish them to.

It’s not that some vendors don’t have the brains or the courage or the heart to put their best foot forward in the land of customization and localization. Or that Dorothy does not know how much and where she wants to walk to, when it comes to driving an implementation closer to home. In fact as it often appears, everyone, from sellers, buyers, analysts, to consultants, partners, SI guys, and yes even journos, run fiercely on the ERP landscape; the truth is that most of the times, we are only panting for breath on a treadmill. We may be galloping but not moving forward.

Localisation is one topic that has been done to death in the past, and now with Cloud, Big Data, Consumerisation taking centre stage on the bright yellow road of the industry, talking about it seems like a scarecrow’s fears. Even though we all know that it’s not a Cinderella story yet.

Out of fashion for many, but he calls it a ‘show-stopper’.

An interesting report will catch your eye and tickle some old but not-so-obsolete questions that still haunt the ERP road. We do not have a fairy yet but we do have the experience and curiosity of Sunil Padmanabh, Research Director at Gartner to give us some right directions here.

Having clocked 19 years of well-rounded industry experience, his hands-on métier into the world of ERP suites, his regular interactions with customers, his well-kept pulse on their pain points, his ears placed well near the horses’ mouth, his eyes sharp without the usual hype-blinkers, and his deep experience spanning various genres and generations of vendors, make the topic fresh and furious again. He does not have a magic wand but he does have a lighthouse view of all the storms and winds blowing when it comes to verticalised ERPs, tailor-made customers (and not vendors), side-effects on upgrades, and adaptive DNAs of some suites.

Let’s tap our shoes and step forth then.

Why are we talking about customization and localization Sunil? Not out-of-sync with today’s headline-makers?

Actually, overall, localization has always been important in this part of the world. Has always been challenging too. Functionality has not been that much of an issue with Indian CIOs. Blending them with the process is not tough. The question is frustration of the end-users. And third-party support can not fill that gap. Vendors have gone overboard to understand localization complexities here, and have been trying to blend them as a product.

You mean vendors are actually giving it a priority?

Seventy per cent of critical customization or implementation is now done away with thanks to proactive vendors. Previously it was a space full of add-ons. Not any more. Now they are giving blended products. Like- solutions geared for dual reporting scenarios or India’s typical issues with taxation related localizations etc.

Right, but how similar is configuration to customisation?

Configuration gives you flexibility in a set standard. You take s standard situation and mimic changes so that it fits in, without changing much in the core system. Customisation is slightly more elaborate. The coding alters the standard so requires more effort, is riskier, and has a lot more detailing.

Verticalised functionalities are a hot word today. Just another gimmick or have they covered the customization road adequately?

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I would not call this a gimmick. But the kind of customisation that is required for a Telco in India would be different than that for a Telco in other countries. Even then, countrywide gaps are being addressed and should be taken care of. SIs and implementation partners can take care of the other challenges while verticalised suites can handle the typical industry challenges. It is a vendor's strength to deploy verticalised solution, and even take care of rapid deployment so that CIOs do not have to hunt too much. 

So, it’s more than lip service today, as you reckon so far?

Yes, earlier localization was looked upon as a very complex area. Now blended capabilities are a reality. Users are far more comfortable and timelines have shrunk because of ready-made functionalities. That is critical for a market like India. I see more ERP vendors getting active in the next four to five years in this realm. It is not surprising to see SAP going to a PSU and proactively asking for requirements that can be taken care of in its next release, and even dish out a ready-made functionality. Localisation is a big show-stopper.

For example?

Earlier many companies downloaded all data in Excel and then submission to authorities could be possible. Now, you will find suites where everything is system-generated. Localisation is turning out to be a critical attention area for markets like India, Brazil, China etc. May be because taxation et al is relatively complex here. That also makes adoption levels significant. Earlier risk and fear of complexities led to CIOs doing it themselves but over the lifecycle, interfaces and duplication issues did come up. Last five years have seen a lot of change though. Specially in case of SAP. They have become very proactive in this area, and with ASUG influencing future products so much, it has been a good progress.

Ironically enough, implementing an ERP is still a big kick for many CIOs? Is there a subtle caution wind for CIOs when they should worry about jeopardizing their own roles if customization part is taken away from ERP implementations?

It is not going to be a closely-guarded product scenario for good. They will have to move away from keeping a tight hold on this space. The role will get diluted, but it will also create a compelling focus on applications and business. There will be new GTM (Go-To-Market) kind of roles that can emerge.

A study by Panorama Consulting mentioned how 41 per cent enterprises make big adjustments to ERP while 35 per cent adjust the ERP to business processes. Putting the cart before the horse, are we?

Customers continue to believe that processes can have gaps too, in terms of number of steps to achieve a certain level. Standard processes have been developed in last ten to fifteen years in many places but when you think of best practices, it is a concept still not as widely accepted as it should be.  I guess the figure is bigger. Sixty to seven per cent do not follow a best practice. They believe that their business is unique. It is best recommended then to keep everything as vanilla as possible. More so, for MNC organisations if they want to achieve true globalization and standardization, against the myopia of wrong degrees of customization.

Do upgrades have a not-so-good equation with customized suites?

It usually does upset the cost of ownership, because you have to maintain what you have changed. New features happening in an upgrade will not be compatible. But if done within limits, customization can help, if kept tolerable for users. When you change or do extensive customizations, you are altering the already-available best-practices.

What should CIOs go with then? To be (spoke) or not to be (spoke)?

Customisation, as I would conclude here, is desirable but not always practical. Should you shift complete customisation to standardized systems? It’s not a wrong idea if you assess your actual priorities. Vendors are also becoming aware of TCO issues. The more you localize the more training users would also need. Some level of customisation is inevitable but do not go overboard. Striking a balance is always better.