Single ERP Product and Instance vs Multiple ERP Instances or Products
Posted May 30th, 2009 by Helen
I've been in the middle of a debate about whether you need one Single ERP instance or HR system across the entire organisation to be successful or if you can do the same job with multiple ERP instances or products (i.e. SAP, PeopleSoft, JD Edwards, Oracle etc.).
My view is one product, one instance.... Any thoughts fellow members?
I'd been keen to get my hands on some case studies to support the respective views.
Thanks!
One HR instance
I've seen close to 100 HR system implementations (mostly SAP) and the only reason i could ever find for multiple instances were a bunch of junior consultants who
- didn't know how to manage authorisations and settings in a global client
- lacked the vision for where the system will ultimately deliver benefits beyond payroll
- found that this was the fastest way to get over and done with a fixed price implementation project
Sounds a bit cynical, but I guess that's what you become when you see so much of this stuff. To be fair: the short-sightedness was often coming from clients' management teams rather that the junior consultants.
Also, a barrier to getting a single instance can be the central IT team, which needs to change a lot of processes, skills and most of all mindsets to accommodate a singel instance.
But apart from these barriers: if you really ant to reap the benefits, not only in TCO, but in business value, go for a single instance.
If not: ditch your ERP and go for cheap local off-the shelf payroll solutions and pragmatic stuff for reporting and talent management (like MS Excel). Honestly!
What you need is a good change manager who understands HR-IT to take you through the global rollout.
Sven RinglingiProCon HCMwebsite: www.iproconhcm.co.ukblog: www.iproconhcm.co.uk/insightblog
Thanks.. how about the business case?
Thanks Sven, that's pretty consistent with my view and what I've seen although I was concerned I might have been a bit of a 'cynic' myself.
Any ideas on how you can demonstrate the business case especially to those entities with their own system or instance, who can't see the value of getting on board?
Business case for single instance
Hi Helen,
for a new implementation, the single instance should give you an easy business case based on TCO. Increased value due to harmonised reporting and global processes (global talent management, expats,...) may not even be necessary as cost alone usually justifies it through synergies in implementation and operations (unless these cost are hidden somewhere in a corporate budget while the inconvenience of accommodating in a shared home with others is burdened upon teh local entities. If they don't have to pay the bill, they are more likely to ask for their own system).
More difficult, when you subsidiaries already have their own fit-for-purpose systems. Operations are rarely expensive enough to justify the expense to integrate them into a single instance alone. Then we have to talk about cost saving PLUS business value. Reporting is a big one, but recently often argued to be not relevant as you can have integrated reporting by all systems feeding into the same BI. But this is either not the same value because lack of harmonised structure makes it impossible to feed into the same reporting system without ending up comparing apples with pears - or its just as expensive as doing a single instance in the first place.
Other fields are expat management, internal recruitment (many corporate employees say, it's easier to find a career abroad, when they leave the organisation, that it is when looking inside the organisation.), talent management, headcount planning, reward design and planning: all these processes deliver more value when supported cross-border in global, or even more so: transnational organisations. But it is far more difficult to attach a £ sign to this advantage. Nevertheless, HR-Executives will need to do exactly this. It will in many cases be a (informed) call of judgement.
Sven Ringling, iProCon Limited
website: www.iprocon.co.uk
blog: www.iprocon.co.uk/insightblog