Migrating ERP Systems
With large companies, these implementations have gotten so big. One customer said he was looking at an upgrade. SAP said the new upgrade will cost you $1 million in additional licenses. That doesnt sound bad[the customer] looked at the new software and could identify $10 million in value [it would add]. But it would take two years to do the implementation and cost more than $75 million. So what you have now is large companies saying, "When I first put in ERP, having everything on one system was a huge advantage. Now these huge systems are limiting innovation." [Suppose] SAP or Oracle comes out with a new release. No one wants to be the first to do the upgrade. You want to find out when other people have done it. Interim releases for bug fixes and missing functionality can take a year or longer.Then in the second year, if I use this, how will I have to change concurrent software? Training for employees? The second year is just planning the implementation. Then the third year is going live.If something is going to take three years, people want to do that less and less. Project Fusion: Is that something thats going to make a painful migration worthwhile? [One aspect of Fusion] is the notion of a data hub: one place where you can go and [access the] whole enterprise and find the system of record or master record for a customer, supplier, employer or whatever. Imagine youre a customer of the Bank of America. If you have a mortgage loan, bank account or something else, theyre all in separate databases. Information about you is stored all over the place. Oracle is talking about cleaning up that [mess]. SAP calls it master data management. [Wookey] talked about the notion of transaction bases: having one place [in health care, for example,] where all information about me as a patient is stored, and then being able to write your own software on top of that. Maybe as a patient-tracking system, or an extension to a billing system. The notion is that youd have data objects like customer, employee or supplier, and then certain business processes that sat on top of your ERP system. But its like all this stuff is in the conceptual stage. You cant describe how a customer will use it, because there are no customers yet. Were in the LOFthe leap-of-faith stage. Next Page: Oracles retention of PeopleSoft tech staff shows cultural similarity.