Just as COVID-19 is stifling economic activity, ERP lockdown can lead to innovation recession. It doesn’t have to be that way.
ERP Innovation- One of the many problems associated with lockdown is managing the trade-offs between risk and reward. This got me thinking about the governance policies surrounding many of the ERP systems that provide the core business processes for many organizations. The processes for change are usually designed so that it is pretty hard to make change – the system is in “ERP Lockdown” – in this case the lockdown is designed to prevent the spread of errors/issues that could interrupt business as usual processes. One of the downsides of this policy is that it can mean stifling innovation – once again it represents a trade-off between risk and reward.
Lock the ERP system down too much and you can’t drive maximum innovation value from your ERP investment. Lock it down too little and you end up with an unstable platform that doesn’t meet the required business service levels.
No CIO wants to be dragged in front of the CEO about the sales that have been lost, stock shortages from production line interruptions or supply chain bottleneck caused by an unstable ERP system. What tends to hgappen is that each time a problem occurs, the governance processes get tighter and tighter.
Sometimes the lack of innovation can go unnoticed for months or years as it is difficult to miss something you never had or teams outside of the ERP bubble learn to work around the ERP Lockdown, often making the IT landscape more complex than it needs to be.
Things I have seen include :-
- New features not being activated – these features are paid for via your maintenance / subscription, so never using them means you don’t get full value from maintenance payments
- Running processes in batch which could be real-time – many systems were implemented when processing capability was much slower than today – so what could be run today in real-time that only runs once per day / month – could that help you serve your customers better or reduce costs ?