One size fits all?
If you’ve ever worked in the supply chain arena, you know that no two procurement processes are exactly the same. But the process of understanding and developing system requirements, procurement or otherwise, shares many similarities. When faced with system selection and implementation challenges, organizations are often overwhelmed as they try to balance available system functionality with unique business critical requirements.
As it turns out, you don’t have to find one system that can be all things to all people.
The customization conundrum
A huge percentage of businesses and organizations have implemented an ERP system, often targeted at streamlining their SCM processes. Although ERPs are powerful and essential, they often can’t fully meet the dynamic supply chain and procurement process requirements necessary for optimal contract management. One of the most commonly cited challenges of ERP implementation is lack of system flexibility. ERP systems tend to provide a ‘one-size-fits-all’ solution that requires custom code in order to meet an organization’s unique needs. As a result, as few as 23% of companies implement an ERP with strictly out-of-box functionality, and companies in aerospace, defense, and government are even more likely to customize their ERP software.
Many organizations have complex supply chains with multiple facilities, and processes that may vary from one location or business unit to another. While ERPs are excellent for managing transactional data, contractors must track and manage a variety of supplemental data which ERPs don’t account for. These specific requirements that extend beyond ERPs include things like CPSR audits, supplier and customer relationship management, RFP and CDRL management, transparency, and DCMA compliance.
In order to avoid the dreaded “over customization” infamous in complex ERP implementations, businesses are turning to an emerging market of niche products that can integrate seamlessly with ERPs but which allow significantly more flexibility without the upfront costs or the long term supportability issues associated with over-customized ERPs.
The flexibility offered by these niche players allows procurement professionals to define their requirements outside of the scope of an ERP with a focus on the best solution for them.
This whitepaper, presented as part of a training session at NCMA’s Subcontract Management Training Forum, March 17–18, 2016 in Tysons, Virginia, provides an overview of some of the challenges in implementing an ERP as the primary Supply Chain Management (SCM) or Procurement system solution and offers an alternative to ERP customization.