Business Systems

August 17, 2006 6:01 AM

SAP / Oracle, these are the big expensive systems I want to avoid in a new business system. What other options are there for a small to medium sales comapany?

We buy/sell about 40 lines, have a medium sized warehouse and all the typical accounting / marketing / sales people/functions that need integrating. I have seen SAP go in at my last company (huge company) and I think it is too much and too expensive for us here in a small company. We currently run a UNIX system from years ago which works, but is unweildy and dated.

posted by Frasermoo to computers & internet (9 comments total)

Excuse my ignorance here.. but can you give a brief, two paragraph description of SAP? We are starting to look at enterprise accounting applications, and aren't moving very fast because we don't know what to look for.

Out existing software is integrated into our medical software (an old SCO Unix based application), but most of our new options do not have this. Currently we have very little (to no) HR software, or any other cost tracking software other than the reports the GL in our current app provides.
posted by SirStan at 6:16 AM on August 17, 2006

I don't think there's any other area of human endevor to which the dictum "if it works, don't fix it" applies better than it applies to ERP.

If you insist on bringing in a new ERP, you must bear in the consulting time and administrative costs which are a huge proportion of the total cost of installation and total cost of ownership of an ERP. You might find that the depth and breadth of the Oracle and SAP professional community might make your total costs with those products competitive with your total costs with software which is cheaper to license.
posted by MattD at 6:38 AM on August 17, 2006

I have to agree with MattD that this is one place where if it works, don't fix it does apply. It is expensive and time consuming to move from one system to another, ensuring everything has transferred properly, and retraining everyone to use the new system.

However, if you are a smaller company that is growing, moving to a new application now will save you an even bigger headache down the road when the company is even bigger with more information to move and more people to retrain.

Of all the open source ERP software I have seen, Compiere looks to be the best and most complete. They have paid support, conferences and classes to learn how to use the system for not only users but administrators too. It runs on Java capable platforms and uses Oracle for the database backend (they were working on PostgreSQL support, but it seems to be on hold currently).
posted by chrisroberts at 8:11 AM on August 17, 2006

It is down the road that I can see the headaches coming. THe problem is that the business is growing and so we need to think forward.

SirStan - in my own words (and I am not an expert), SAP is an all encompassing package for business. You bolt on the functions you need such as sales / accounting / logistics / production / reporting / HR etc... It's hugely powerful and expensive and I can't see us getting away with less than a quarter mill to get it in, not taking into account licencing costs per user per year / lost sales through implimentation / further training / updates...

I'm going to have a look at Compiere, thanks Chris..
posted by Frasermoo at 8:28 AM on August 17, 2006

wikipedia has some good reading on ERP & SAP
posted by Frasermoo at 8:32 AM on August 17, 2006

See also SQL Ledger.

And if your old system is Real World, just move it to Linux and run with it. Passport (it's current version) is native there, and still well supported - I can hook you up with a guy if you need one.
posted by baylink at 10:56 AM on August 17, 2006

As a veteran of many ERP implementations and conversions, let me say that the hardest thing for any organization to assess in deciding what to do about ERP, is just how well they know themselves and their business. Surprisingly, just the process of pre-planning and evaluating new ERP systems often forces out powerful limitations or dissatisfactions within the business, that have little to do with its information systems, and much to do with its culture, processes and personnel. Even the best software can't fix bad business processes or incompetence, and companies which can't afford consulting time, productivity loss, and license and training expenses for broadly installed and tested commercial systems are failing the first hurdles of successful ERP implementation. Be warned. If your business process aren't already documented to ISO 9001 standards, you may have a tough time trying to do even a "plain vanilla" ERP systems implementation from scratch. And if your company doesn't include people with significant experience in data management and RDBMS systems, doing a systems conversion is liable to require considerable consulting time for data conversion and test, unless you can get your current people to do an acceptable raw data load, system configuration, parallel test, and start up, in addition to the regular jobs, over the several months such an activity is likely to take, at best speed. So, there's all that to sort realistically. Good luck, and I mean that sincerely.

In the U.S., Europe, Japan and India, the last time I assembled a fairly comprehensive list in 2002, there were about 1500 commercial developers of ERP systems (my barrier to "commercial" was 50 or more claimed clients), but many of these systems appeared to be General Accounting systems to which had been added additional functionality, with varying degrees of integration of functions. Historically, this is how first generation ERP systems developed, and it is still an ongoing business path at the low end of the spectrum. But 1500 candidates is too great a universe for most beginning user organizations to consider; for smaller companies, with limited scope and investigation committees, I recommend CA Magazines annual survey of ERP systems, the 2005 version of which compared 55 leading commercial systems in 5 tiers of expense/complexity. This is as good a place as any to begin collecting information on the major and minor players in an increasingly competitive marketplace for core business software.

One of the things that comes out of your question, Frasermoo, is that you are a "plain vanilla" distribution operation, as you don't identify any other activities as being central to your business. Thus, you might want to investigate Distribution Requirements Planning (DRP) functionality as a core competency of whatever systems you look at, as opposed to the more traditional competencies of ERP systems, which are generally manufacturing requirements control, and process accounting. You might also want to challenge yourself as to whether you really are as "plain vanilla" as you appear to believe you are, before plunging into software selection. Some businesses I've worked with that did thorough ABC product analysis as a pre-planning systems implementation activity, found that their inventory models were significantly skewed for supporting important business relationships, which were, in fact, the major value added that they offered their markets. In some cases, their willingness to stock at other than EOQ levels was the reason their suppliers did business with them at all, and changing such stocking levels based on EOQ analysis would have been immediately and strategically detrimental to their business, to a greater degree than management had previously understood or believed. Such hidden understandings are often encountered only when a fundamental re-structuring or re-engineering project is undertaken, and it is vital that you, as a decision maker for the business, don't miss such situations, or you can become not only a failed ERP implementation, but a failed business participant. It happens, believe me, and thus I say:

Implementation risk management is not only cost control.

Although you appear to be a Canadian from your user profile, and might therefore have Canadian business issues uppermost in mind, I'd suggest you look into the National Association of Wholesaler-Distributors, as a source of research and business trend advice, some of which goes directly to best practices and competitive functions of enterprise software for distribution operations. Since the research is often member based, it is not entirely indicative of the whole business universe (thus not necessarily statistically valid) but it is fact based within its scope limitations, and fairly inexpensive for businesses of your size.
posted by paulsc at 12:42 PM on August 17, 2006

What about Netsuite?
Their whole value proposition is that you get all the benefits of ERP without the insane costs and administration hassle.
posted by Wolfie at 1:23 PM on August 17, 2006

MetaFilter: because paulsc really does know everything.
posted by baylink at 8:10 PM on August 17, 2006