ERP Suffer

This article based on my review at an ERP implementation experience of a pharmaceutical company. The last time I visited to the company was on June 2009. I observed that the implementation does not make their users happy but suffer.
They implemented Oracle ERP release 12 with the following modules :

General Ledger
Account Receivable
Account Payable
Cash Management
Fix Asset
Purchasing
Order Management
Inventory
OPM (Oracle Process Manufacturing)

Here is the painful list :

They cannot close all transaction every month. At the time I visisted, the financial department is struggling to close transactions in December 2008 – six months closing delayed! Can you imagine that?
They have to maintain data from manual system because they cannot trust data from Oracle
Too many errors they found in that release. Sometime they have to wait some days to get the patch. It makes the IT support hard to trace where errors come from, is it from user or from the software itself
Users feel that the software is too complicated yet they have no benefit as expected yielded from its complexity
Many customized reports are delayed because only IT staffs who have skill in SQL can build report
The users, for some transactions, still run manual system because the Oracle does not address their business process and unfortunately, it is not allowed to make any modification in that software

From my perspective, the problem is mainly caused by failure in software selection. The biggest mistake was users never see the demo of the software but they just see the presentation. All software always looks perfect in presentation, right? They should see the demo knowing how that software addresses user needs.

When I asked to one of selection team members, why did they choose the software, they said that the price was cheap. So the price (cost) was main consideration. They put the benefit on second or lower priority. It is not right since ROI (return on investment) is consisting of Cost and Benefit.

Back to current condition. Do they win in price (cost)? No they don’t. The company, tired to get never ending problem, establish new contract to the vendor for solving the problems. It means another expend and of course they have very bad ROI.

The worse thing I found that the price is not cheap as I imagine. It might be get special price from Oracle but it is still not cheap comparing with other ERP software. The price covers minimal user license and exclude an important module for manufacturing, i.e. Production Planning. The vendor informs that Production Planning process will be addressed in Oracle ASCP (advanced Supply Chain Planning) but they won’t tell the price.

Who is the winner? The vendor because they have a “loyal customer” !

Related article : ERP Business Benefits: Myth Or Reality?