The End of Monolithic ERP
Tuesday, September 10, 2019
The End of Monolithic ERP
The main criticisms of ERPs are often referred to as rigidity, high costs, inability to evolve rapidly at the pace of business, and heavy and aging interfaces. All Inclusive or “Monolithic” ERP systems have become static and cannot adapt fast enough to accommodate the changing business world. Customization became a huge bottleneck as companies had to design workflows around their ERPs limitations costing them time, money and overall competitiveness.
The assumption that one complete system will be a comprehensive solution for all businesses is impractical. While monolithic ERP may be the right choice for some businesses, it is not a one size fits all solution.
In 2000, for example, Nike decided to implement an ERP system to forecast the market demands and take on the new millennium with technology. February 2001, Nike Corporation generated $97.4 million in profits, which was around $48 million below the forecast for that quarter. This was due to a bug in the supply chain software installation according to Nike. The failure was traced to an order management module and negatively affected the company for over a year. Despite spending $400 million to get the ERP suite in place, Nike lost over $100 million in sales, forfeited 20% market share, and faced numerous lawsuits. The bug was eventually fixed in late 2000. Coupled with overhead costs, reliance on one vendor, lack of integration with modern business intelligence, monolithic ERPs were facing issues too big to be ignored.
Many high growth companies in the SMB space are taking an innovative approach to manage their technology landscape using a best of breed approach. This approach “is the strategy of selecting the best product that will meet all of your business requirements. With this approach, your business will select the best system—typically in its referenced niche or category—and it will perform a specialized function better than an integrated system.”
Ascent Solutions has helped existing customers move away from larger systems with this flexible attitude. The savvy Salesforce customer does not need a ton of hand holding while implementing a native AppExchange solution around aspects of ERP. We have honored that mentality by making the support content/team readily available and up to date. We will also be launching a live chat feature to connect customers to experts if they get stuck while implementing the solution on their own.
A few years ago one of our customers made a strategic decision to unravel their monolithic ERP system and move forward with a best of breed approach. This customer is now a legitimate, well known brand because of the best of breed architecture. This story is inspiring and deserves a post of its own; look out for our next blog.
Ascent Solutions best of breed approach focuses on Order Management and Inventory. We will have a new product line launching very soon utilizing the best of breed architecture. This product, geared toward SMBs going through digital transformation, will allow customers to get up and running quickly to see ROI.
Authors: Akbar Rafiuddin and Nikolina Trent
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