When 'free' can be very expensive
Saturday, March 21, 2009 at 10:44AM
Steve in ERP, ERP

You are a mid to large size company.  You bought and deployed a big ERP solution for your HRMS, Payroll, maybe your Accounting and Procurement as well. Flickr - JeffChristiansen

It was crazy expensive, likely took longer and cost way more to implement than you figured, and you ended up making lots more customizations than you had planned for (despite the initial desire for a 'plain vanilla' project).  Aside - you know your Project Manager used that expression at least 10 times in the beginning.

You finally have the ERP running relatively smoothly, to the point where it's time for other long put off projects to get considered.  More 'strategic', high value-add type projects. Things like a new Applicant Tracking System, an automated Performance Management tool, or perhaps Succession Planning.

But in these tough economic times, do you even have any funds for new software?

After all, you are locked in to some hefty annual maintenance/support fees for the big ERP system. But wait, the ERP system can support all these 'strategic' processes. And five years ago, when you hammered out the ERP license contract, you made sure that you would have the right to use all those modules at any time in the future at no additional cost.

It's a no-brainer then, right?  You will simply use whatever functionality that is inherent in the ERP package for your new ATS or Performance Management solution. It is already paid for, it integrates with the rest of the system, and you have functional and technical staff who know the technology.  Slam-dunk.

But wait a second, five years ago when you did your due diligence in the ERP purchase process, did the modules for ATS, Performance, or Succession even factor in to the discussion?  Did you even consider them at all? If you approached ERP selection like most organizations, you spent 95% of your energy on things like integration, technology, and 'core' business processes.  These are all important, and it was altogether fitting and proper that they were the priority. 

But now, when you are ready to deploy some of these 'strategic' modules, are you realizing that while your ERP package supports them, they are difficult to use, don't offer most of the latest advances in the technology, and are not well-received by your end users?  ERP packages are developed and sold from the 'inside-out'.  The tight integration, the unified database, the ability to leverage tools like workflow and security management across a wide swath of the enterprise is what 'sells' ERP.

No one, I mean no one, ever bought an ERP solution for the wonderful E-recruitment capability, or for the fantastic Performance Management module. 

It is a concept that has been repeated for 20 years, it is almost a cliche, but it usually bears true. The big ERP packages simply cannot be as good at all the ancillary strategic capabilities as the best-of-breed vendors.

And when you implement ERP-based, sub-standard capabilities for ATS, Performance, or Succession, areas that impact a much, much wider audience than your core HRMS, you had best be prepared to justify and support that decision. 

When the candidates, hiring managers, line managers, and executives start complaining and griping about the solutions that you have implemented, and adoption rates are slower than you would have liked,  is your primary response going to be, 'Hey it was free'?

'Free' can be very expensive.  Implementing software just because you have already paid for it can be a very costly mistake in the long run.

 

 

 

 

 

 

Article originally appeared on Steve's HR Technology (http://steveboese.squarespace.com/).
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