ERP Business Solution

ERP is Only Part of a Business Solution

Back in the 80s Enterprise Resource Planning (ERP) was deemed the panacea for business pains caused by operational inefficiencies and disjointed applications.  Then came the realization that ERP was not the final solution but just one piece of the puzzle.  In addition we learned that change was not just a software issue, that implementation is not the same as installation, and that the cost of ERP is not a one-time expense.    Above all we learned that ERP is only part of a business solution.

 Business Solution Defined 

 I like to view a business solution as three components:

  1. People
  2. Processes (business processes)
  3. Technology (software & technical infrastructure)
ERP Business Solution
Business Solution Defined

What is the most important component of a business solution? 

Now here is something interesting to consider, “Do we need all three components to have a solution for business?”  Let me rephrase it this way “Do we need software in order to conduct business?”  I am persuaded to say that the answer is no.    Business was being conducted before the invention of the computer.  However, I am quite aware that not having software a part of your business is impractical given today’s competitive marketplace.  I do want to demonstrate that software only supports and therefore can only have a certain level of benefit to a business. ERP software does not have the capability to make key business decisions.  It is key business decisions that drive business results.  Business software like ERP can provide information and data to assist people in making business key decisions.  Seen in this light we can conclude that people are the most important component of a business solution and people have the greatest impact on the success of a business solution.  Funny how it is interesting to note that the majority of ERP implementations mostly focus on products and technology.  Let’s dig a little deeper and spend some time speaking about each business solution component.

Business Solution Component: People 

People are the single most important factor that will determine whether a business solution is a success or a failure.  People can also be the most challenging component to deal with in a business solution.  Let’s be honest, you can hardcode software to do exactly what you want that product to perform, people are a different story.  The upside to keep in mind is that people have the potential of generating the greatest value in the context of a business solution. 

 Business Solution Component: Business Processes 

What is a business process?  I have seen many definitions but I like the definition provided by Howard Smith and Peter Fingar in their book Business Process Management – The Third Wave (Meghan-Kiffer Press – 2002)

 A business process is the complete and dynamically coordinated set of collaborated and transactional activities that deliver value to customers.

Let us look at the some of the characteristics of business processes that is highlighted in the above definition:

  • Complete: there is a beginning and end to a business process.
  • Dynamic: responding to changing customer demands and market conditions.
  • Result-Oriented: value is generated to your external customer.

 These basic characteristics must be addressed during business solution implementations in terms of needs assessment, requirements management, and validation (testing) of a business solution.   We should not be surprised when business requirements change during an ERP implementation and we should plan for it accordingly.

Business Solution Component: Software and Technology 

Software and technology encompasses the technical infrastructure, networking resources, and ERP software that will support the business solution.  With ERP software there are inherent advantages and disadvantages as listed below. 

ERP Pros and Cons
ERP Advantages and Challenges

 An effective ERP implementation strategy will maximize the inherent advantages of ERP while addressing or minimizing the inherent challenges. 


ERP is only one component of a holistic business solution.  ERP can be a great platform for addressing business challenges as long as the technology is correctly applied.  At the end of the day it is People, Business Processes, and Technology working together in unison to generate business results.  Only when these components are judiciously utilized are business results maximized. 


39 responses to “ERP is Only Part of a Business Solution”

  1. Bill Wood Avatar

    Great insight… Years ago I read “Process Innovation” by Thomas Davenport and his basic premise was that technology is a change enabler. That thinking has strongly influenced my SAP career since 1994 and I focus heavily on the whole topic of SAP customers becoming more sophisticated and more knowledgable.

    Unfortunately there are too many “consultants” out there who have absolutely no idea of business and even less on how to use technology as a change enabler.

    On the critical issue of knowledge transfer to clients so that they can make critical decisions I have written two key posts:

    Change Management Strategies and Knowledge Transfer Processes for a Successful SAP Project 1

    And the details of the types of training and knowledge transfer that are required for success:

    Change Management Strategies and Knowledge Transfer Processes for a Successful SAP Project 2

  2. Suzie Smith Avatar

    there is a crucial point made in the post, i.e. a quality ERP is not the silver bullet if other parts of your company are not up to scratch.

  3. […] Requirements Management ← ERP is Only Part of a Business Solution […]

  4. Arthur Panton Avatar
    Arthur Panton

    Absolutely agree, but I add an outer circle to represent the enterprise goals/vision/mission. You have to know where you are going; mostly – but of course you can still enjoy riding in circles :-).

    The point is that the “implementation” is in a relatively closed environment – supply chain notwithstanding – and the boundaries, which I believe you are defining, must be, err well.. defined!

    I recently divorced from a global erp supplier who gave lip service to knowledge transfer; simply putting the system in place, giving some rudimentary training and then walking away just doesn’t cut it – their steadily shrinking market space in Africa is a direct result of this but they just won’t be told. A dinosaur symptom.

  5. Edsine Avatar

    very valuable points for ERP startups
    Thanks for sharing..

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  7. […] area this is typically not defined well is the business processes and ERP product features that are part of the implementation.  Too often business processes and product scope is defined […]

  8. […] ERP software is only one component of a business solution.  When we perform an ERP assessment an analysis should also look at the business processes and people who the ERP software supports. […]

  9. […] concepts of a flexible and adaptable ERP solution.  Referring back to a previous blog we know that ERP is only one component of a business solution.  There are three key areas to address as part of developing a flexible and adaptable business […]

  10. […] as its weakest link.”   Applying this concept to business software, we would conclude that a business solution is only as strong as its weakest integration.  Usually overlooked and underestimated, integration […]

  11. […] Cloud ERP offers a faster implementation timeframe.  Nevertheless, it is important to note that Cloud ERP is only one component of a business solution.  There are still multiple disciples required for a Cloud ERP implementation – especially […]

  12. […] your organization has an ongoing process to align business priorities and IT priorities for your business solution.  Having an ERP application strategy roadmap is a deliverable that will support the alignment […]

  13. […] the views that (a) pain is bad, and (b) quick-fixes are more desirable (demanded) than permanent solutions to business problems. For an ERP perspective, the typical end-result to quick fixes will be more customizations.  […]

  14. […] development is right there at the top. However, this value generator is in conflict with a core ERP value proposition.  Organizations purchase packaged software like ERP to minimize internal software […]

  15. […] Quick solutions:  There can be a perception of a real-time, on-demand value generation for customers.  It is important to remember that Cloud ERP is only one component of a business solution. […]

  16. […] decisions on ERP customizations are based upon partial information and are made in isolation.   ERP is only one component of a business solution.  Business processes and People have a greater impact on business results.  Key Drivers for […]

  17. […] Bron : ERP the Right Way! Bekijken… […]

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  19. […] it means that there is a new way in which business software solutions are being purchased and consumed, and that means resellers need to pay close attention to the way […]

  20. […] Project scope refers to the implementation activities that need to be performed and who is responsible for performing the task(s).  Unfortunately, customers see this as an area to reduce implementation costs by taking on activities that they do not have the skills/resource availability to complete (ex. Organization Change Management).  People make ERP successful. […]

  21. […] Putting more power in the hand of business users is the strategic answer for business agility.  People are the most important and adaptive component of a business solution. Rate this:Share this:EmailDiggShare on TumblrLike this:LikeBe the first to like […]

  22. […] Technology is only part of the solution.  What is the value of providing new ERP features if end users are not formally trained?  Who will perform regression testing for both technical and functional upgrades?  In my mind, a leading ERP Cloud vendor should provide both an automated testing solution and on-demand training solution to facilitate rapid deployments.   Cloud providers should have a services framework such as ITIL or ITSM.  This is a validation that your Cloud provider is committed to delivering reliable professional services. […]

  23. […] a competent project manager, you know that the project must address all three components of a solution in order to be successful in meeting all expectations.  For the sake of brevity we will only focus […]

  24. […] strong as its weakest link.” Applying this concept to business software, we would conclude that a business solution is only as strong as its weakest […]

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  30. […] make mistakes – especially me.  People don’t care what you know until they know you care.   It will be people – not technology – that will play the biggest role in getting the ERP project back on […]

  31. […] at managing change you can provide a focused effort to accomplishing your objective. Remember that people are the most important component of a business solution.  Given the importance I believe that formalizing this activity is worth the […]

  32. […] relevant information is presented and evaluated.    Do not evaluate business requirements in functional silos but as part of the larger business process across all business stakeholders.  Visibility across the business process creates accountability […]

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  35. […] An ERP implementation is the implementation of a business solution. […]

  36. […] we need to revisit the concept of a business solution, the key components, their relationship, and influence on ERP […]

  37. […] implemented.  There are two key factors that directly influence business process maturity levels: technology and people.  Practically speaking, we can agree that reaching a CMMI Level 4 or Level 5 requires an […]

  38. […] efficiency with an ERP service is not a Just-In-Time event but an incremental process.  Given that people are the most important component of a business solution, it is negligent not to involve users thought out the ERP service […]

  39. […] There are two key factors that directly influence business process maturity levels: technology and people.  Practically speaking, we can agree that reaching a CMMI Level 4 or Level 5 requires an […]

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