The Curious Case of Dual ERP’s – A Business Case
In Aberdeen’s study on the total cost of ERP ownership, they acknowledge that many of the survey participants have indicated that 2 or more ERP’s were implemented across their enterprise. This is a clear acknowledgment that it is not uncommon to find companies ending with more than one ERP. Most common reason is mergers and acquisitions resulting in divisions/plants operating on different ERP’s. Except perhaps the large companies who have their own reasons to adapt a multi ERP architecture.
Does a multi ERP environment make sense in an SME? Or should companies move to a single ERP only? There are pro’s and con’s to both the approaches and much of it would depend on the business strategy of the company.
Lets first take a case of living with dual ERP’s with a hypothetical case study?
ABC Inc has eight plants: Plants 1 to 5 are on QAD and Plants 5 to 8, which were recently acquired, operates on SAP (Figure-1 below). Financial Consolidation is achieved through Hyperion.
Dual ERP
The issues facing the company are (1) ability to scale to future requirements (2) cost of multiple support (3) disparate master data and (4) disparate processes. All these anomalies are (1) increasing the total TCO and (2) questioning the ability to handle future growth.
ABC Inc has two options. Option-A leverage the current dual ERP i.e., QAD and SAP or Option-B move to a single ERP i.e., either QAD or SAP.
Lets make a business case for both the options. In a real life scenario other factors like availability of budget, extent of implementation complexity etc may make the decision more individual and unique. For our purposes, let see the pro’s and con’s of both the options.
(To continue)
