WHY IS THIS A PROBLEM NOW?
ERP packages and their
associated brethren have attempted
to standardize the way to
manage information
within the corporation. For
the most part, they have
been
successful. These systems
have allowed for the
replacement
of many varied homegrown or
out-of-date systems
that inhibited change and
made modernization difficult.
The problem is that the
proliferation of new systems
on the periphery is
outstripping the ability of
ERP
packages to grow and
incorporate these various
data collection points into
a core application that is
available
for the corporation as a
whole.
Proliferation is occurring
for a number of reasons:
(1) it is fairly easy to
create a database using
MS-Access
and many end-users are doing
this and avoiding corporate
IT; (2) information systems
development and deployment
time has been cut
considerably, enabling a new
system to be rolled out soon
after new requirements are
defined; (3) most new
hardware comes with a
computer
system; and (4) business
processes are changing at
breakneck
speed.
Mergers and acquisitions
have added to the problem
because of different
cultures and systems that
were
standard but are now
immediately nonstandard.
Distance
is another element added to
the mix. A standardization
effort that would be fairly
straightforward in a
single location becomes
extremely difficult in
multiple
locations and with different
organizational structures.
The above paragraph argues
for standardization and
a rational manner of
evaluating systems or
processes before accepting
them into the corporation.
Of course each person or
group that brought in one of
these systems
was keen to a key fact—they
were bringing in something
that was an improvement over
the previous way
of doing things. Hence, the
rub.
As we enter a new century,
we are hearing two seemingly
contradictory terms. One is
standardization. This
call is being driven by
cost, ISO/QS 9000,
standardized
work instructions, quality,
international demands, and
technology—to name a few.
The second is innovation.
This call is being driven by
competition, a need for
product
and corporate
differentiation, and
speed—to name
a few. These competing
demands are similar and
related
to the old centralization
versus decentralization
arguments of the past.
Just as the centralized
versus decentralized
arguments
went, there needs to be a
rationalization. Complete
decentralization
leads to cost overruns and
confusion,
while complete
centralization leads to
slowness and a
detachment from the
business. One must look at
each
individual function and
decide where it makes sense
to
perform the task. One of the
key success factors is to
make sure you keep some of
the task local while centralizing
the main function. This type
of relational management
has been in place for years
and generally appears
to be working.
The innovation versus
standardization argument
needs to mimic the
centralization versus
decentralization
decision process. You cannot
have only innovation
or only standardization.
There must be a plan in
place to make these types of
decisions in a rational
manner
and for the best purposes of
the corporation. This plan
must have multiple prongs.
The decision is too important
to leave to
seat-of-the-pants decision
making.
Continued