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Since Y2K, organizations have achieved a state of stability and efficiency in their financial, HR and other resource-specific applications that comprise ERP systems. Unfortunately, many organizations are being enticed to upgrade their underlying ERP systems in order to adopt new compliance, process and performance centric applications. Purchasing or upgrading your ERP systems to gain access to new applications involves significant risks including cost, impact and resources.

ERP systems have reached a stable level of competency and functionalilty as provided by vendors such as Lawson, Oracle, Peoplesoft, SAP, SSA and others. The maturity of the process and systems for ERP has stabilized and now the market is transforming to the commoditization of these systems. This has resulted in ERP providers focusing on maintaining and improving their large maintenance revenue streams and acquisitions to consolidate and reduce costs of supporting applications. This is evident by recent SSA acquisitions and the last year of battles with Oracle and their bid to acquire Peoplesoft.

While your ERP suppliers try to entice you to purchase new systems or upgrade existing ones through their new applications, application platform, performance management and BI solutions, these tactics must be examined closely to ensure you are not required to modify and upgrade existing systems that are operational and do not need to be impacted to meet new business requirements. The marketing of new capabilities for further efficiency improvements in ERP systems should be examined and weighed against alternative effectiveness and performance-centric approaches.

The performance-centric mindset along with financial and workforce performance approaches bring new opportunities to transition your organization to drive alignment and accountability. This Performance Management approach can help you decide where improvement-to-processes need to occur in the context of critical imperatives like compliance, profitability and other business improvement initiatives. Advancements in financial and workforce performance management suites, available as either enterprise software suites or hosted services, are helping organizations gain a new competitive foothold on business.

Assessment

Organizations that do not define business imperatives for compliance, profitability, performance, revenue and cost management in order to drive people, processes and systems together for improving financial and operational performance are at a competitive disadvantage. The commoditization of ERP and the actions of these providers to gain your trust that upgrading and purchasing new systems will improve performance and meet these imperatives should be closely scrutinized for alternative approaches. Your financial and human capital resources are precious and continuing an inward operational efficiency path could be detrimental to your customer and market performance that requires a performance-centric model for your business.