For several years now, the leading ERP vendors have tried to convince us that One-Size-Fits-All. Companies like SAP, JD Edwards, Baan, and Intentia has made us believe that this is really the case and it’s almost like a natural law. We have heard that tailor made systems are much more expensive and even dangerous. How come organizations fell into the trap, embracing the One-Size-Fits-All model, when we are not accepting it in any other areas (except for maybe our tennis socks)?
Costs. In the late 80s and early 90s the Information System costs started to rise above previous levels. And with the increase in use of PCs, the cost increase was accelerated. At the same time, organizations did not view their IS as a core process. Only as a cost center. And cost centers should be limited and reduced in size. So what could be reduced?
To develop and maintain systems you need people. Often you need people with different specialties to maintain your systems. And as maintenance is a major part of all system costs, how compelling was it not to listen to all the sweet talks from various vendors. The costs would be reduced and you didn’t need any people to take care of your systems.
So what happened? Were these so called standard systems the grail that saved us from all rising costs and eliminated all our problems. No way Jose! Instead of reduced costs, most organizations experienced an even higher increase. But what was even more serious, was that the so called standard system didn’t support the business processes. Instead the business processes had to be adopted to the new system.
The following picture depicts the evolution of the process/system model. At the moment we are at the “Turnkey” phase. Also known as the One-Size-Fits-All phase. What’s significant about this phase, is that the control is out-sourced.
Another significant feature of the One-Size-Fits-All system, is that it is very costly to upgrade or modify. Often these systems are so called integrated systems. Which means, that if you have to upgrade one part, you have to upgrade the rest as well. It’s like if you want to replace your microwave oven, you have to replace the whole kitchen. Cupboards, sink, stove, fridge the lot. An expensive endeavor to say the least.
When we realize that IT is a core process of any organization. And when we come to insight that the most important issue for any organization is to be able to provide:
Then we will see less of One-Size-Fits-All systems and less of IT out-sourcing. We will move towards Components and Modularized systems, that grows with the organization. That are Best-of-Breed systems, aligned with the Business Processes. The upgrade and modification costs will be low to moderate.
