Does Your ERP System Stand on the Shoulders of Giants?

Isaac Newton famously stated, "If I have seen further, it is by standing on the shoulders of giants." How is this relevant to Enterprise Resource Planning (ERP) systems? Let's explore this with an analogy from the automotive industry and tech giants like Apple and Samsung.

 

Automotive manufacturers like BMW or Toyota collaborate with specialized companies for components of their vehicles. For instance, they might use Michelin, Continental, or Pirelli for tires; Hella, Valeo, or Koito for lighting systems; and Brembo, ZF Friedrichshafen, or Akebono Brake Industry for brake systems. This strategy isn't because they lack the ability to produce these parts themselves but because leveraging the expertise of specialized companies often results in superior quality and innovation.

Similarly, Apple could theoretically manufacture its own memory chips or display panels, but it opts to collaborate with experts in those fields. This approach allows Apple to focus on its core competencies while benefiting from the specialized advancements of others.  
 
 

When evaluating an ERP system, consider whether it's a product of collaborative expertise or an isolated effort. Here are some potential pitfalls of ERP systems that lack collaborative diversity:

 

▶️ Self-Contained ERP Systems: Some ERP providers attempt to create all components in-house, from the user interface and database to the scripting language and hardware. This approach can be limiting, especially for customers who need agile, adaptable solutions. These systems can be likened to a cumbersome ship, where even minor changes require monumental effort.
 

▶️ Patchwork ERP Systems: Imagine an ERP provider that acquires a variety of loosely related products, such as Warehouse Management Systems (WMS), Customer Relationship Management (CRM), and financial tools, then combines them into a single ERP offering. This scenario often results in a disjointed system, where the integration of these components is superficial, leading to more problems than solutions.
 

▶️ Stagnant Giants: An extension of the second point, this pitfall involves acquiring companies or products that are inflexible and difficult to integrate or scale. The result is an ERP system that is rigid and unable to evolve with changing business needs.
 

▶️ Dependent Yet Agile Systems: In contrast to the above pitfalls, some ERP systems focus on their core ERP functionality while relying on external, specialized technologies for areas like storage and scripting. Acumatica ERP exemplifies this approach, utilizing the robustness of C# for development and offering flexibility in database solutions with either MS SQL or MySQL.

 

By choosing an ERP system that effectively 'stands on the shoulders of giants,' companies can benefit from specialized expertise and innovation, leading to a more adaptable, efficient, and future-proof solution.