Almost a year and a half ago, I published a post entitled ‘ERP upgrades: Where’s your focus?’. The post was inspired – one might say provoked – by discussions I’d had with several manufacturing and logistics companies.
Many of these companies were preoccupied with their next ERP upgrade, and the new reporting features and functionality that would soon be available. Their preoccupation was understandable. An ERP upgrade is a major undertaking. However I couldn’t help questioning the assumption that an ERP upgrade was, somehow, going to add value to their business. And so, in September 2013, I wrote: ‘Getting the most out of your ERP investment will require a change of focus. Historical data is simply a means to an end. That end is the optimized decisions that supply chain planning and optimization enables.’
The times they are a changin’
At last year’s SAPHILA – the biennial conference for SAP users – there was an intriguing presentation on something called ‘Postmodern ERP’. According to analysts, modern ERP was the era of ERP megasuites. It was a time when companies were willing to sacrifice innovation and flexibility for the ‘advantage’ of a monolithic ERP system.
Postmodern ERP is where we are now. It’s about disillusioned ERP users taking back control. It’s the long-overdue reaction to monolithic ERP systems that placed huge burdens on companies and failed to live up to the promise of creating real value.
The big question of postmodern ERP: Why put up with yet another multi-million dollar, multi-year implementation or upgrade?
Just a few years ago, this question would have been unthinkable. And then in 2012, Tesla Motors asked the question and decided that enough was enough.
For most of us, Tesla Motors is an innovative American manufacturer of electric cars. If you’re a CIO, the innovation that probably caught your attention was Tesla’s decision to create their own ERP system. Tesla’s reasons are worth repeating. Here’s CIO Vijayan on the subject: ‘Every system out there was built, not for one company or one industry, but built for several industries and tens of thousands of companies. By their nature, they are heavyweight, with functionality to satisfy all the needs of the world, and additional bells and whistles. They are not very fast and not very flexible. So we went ahead and built one ourselves to satisfy our core needs.’
Tesla created its ERP system in just four months. That four-month time frame tells us a lot about what Tesla really needed from an ERP system. They obviously didn’t build a full ERP suite for the simple reason that they didn’t need it. They built the system they needed, and focused their attention on implementing engineering and design platforms with a real impact on their competitiveness.
I’m not suggesting that Tesla’s route is for everyone. But their refusal to put up with bells and whistles they didn’t want was a breath of fresh air.
In my next post I’m going to set out some of the new rules of this new era of postmodern ERP. These ‘rules’ aren’t commandments. They’re simply reminders of the real source of business value.
PART TWO: Postmodern ERP – New rules for a new era
