Hi again from Greenlighthouse!
At the Risk of making this blog less and less green today we will focus on the ERP’s world… Again! First of all, let me admit that a few days ago I was a layman on the subject. Not that I have become an expert in a few days but it’s time for the next step: let’s start taking decisions.
Legacy systems are the platforms operating previously to the introduction of a new ERP. In most of the cases, and this is not an exception, maintenance is costly and difficult (you need to be in touch with the developer of the system). Apart from this, usually there is no software integration and you have to figure out how to assemble technology components which were not designed to work together. In this case, the design of the first architecture was complex and involved based on Sun machines, four different servers running in a Solaris (Unix) operating system and various software: Oracle 8.i, Vignette 5.6 and Excalibur v5.3.
The alternative solution meant using Microsoft technology on HP servers, powered by Windows NT, with SQL Server as the database engine, and Microsoft Commerce Server 2000. The maintenance cost expected was much lower, and the development cost was also considerably less. So… What to do?
First of all, the goals must be clear. In this case, CdL was trying to convert Internet into a tool which allows communication with its customers all around the world. Casadellibro.com should live up to the expectations and history of the company. Otherwise, its reputation could be seriously damaged. Secondly, we must set the scene where the decision is going to be taken. In this case we have a new management team facing a huge downsizing and cost reduction scenario.
In my opinion, this is an strategy decision which should be considered according to long term criteria and counting on customer satisfaction. In this sense, I would try to undermine the initial costs in order to highlight the increasing the costs of the old platform vs. the medium and long-term savings of the new platform.
Secondly, I would try to put in practice a ‘user test’ in order to know how the current system is working (purchasing times, obstacles, failures, etc.). This is a very useful tool which allows the company interaction with real customers and draw important conclusions. If properly implemented it helps to reduce costs and increase the ROI.
In the third place, I would try to involve beforehand the people in charge of implementing the change. A big percentage of the success of the project depends on that and we should never undermine the implementation and training costs associated to this phase. A final argument could be based on the fact that ERPs are becoming the common language companies talk among them (best practices) and customization is becoming more difficult.
Let me finish with a final remark. If the case had taken place today instead of almost ten years ago, I would also have taken into consideration Salesforce as an alternative. Apart from avoiding the acquisition phase, common to other ERP lifecycle scheme, other reasons to go for it are:
– Corporate data centers are not competitive anymore. They are expensive to maintain. The main concern is trust & confidentiality BUT there’s no way to be more secure than with a big provider.
– Virtualization: applications run independently of the place where they are. You can balance the activity of data centers depending on costs of electricity, labour or weather conditions (no need for AC) plus the IT manager is not responsible orf those costs anymore.
We could keep on going with this but…There’s more work to do!
C U!
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