E is for enterprise - isn't that everything?

With all the consolidation going on in the business application space, something has gone unnoticed.

Just about every vendor offering a solution wants to be considered an "ERP" vendor.  Of course E is for enterprise- and even smaller customers want to be considered enterprises too.  On the other hand, ERP is notorious and synonymous with complex, costly and prone to failure, and noone wants to be that.   So we have software vendors claiming to be ERP vendors, and customers who want to be considered enterprises, and it's starting to be pretty meaningless!!

So what is it?  Can you have it both ways?   

To really be considered an ERP, an application has to start from a single, unified design.   The application has to include all critical business and financial functions, starting with planning and forecasting, to pricing, customer and supplier management (not just maintenance), manufacturing, scheduling, order management, billing, financial accounting and reporting.   Certain things don't have to be part of this integrated system.  Things such as Business intelligence, CRM, Sales planning, can be standalone or interfaced to a core ERP system.   When you look at the tier 1 ERP vendors such as SAP or Oracle, you get a good idea of what the potential for a full enterprise implementation might be. 

But customers have to separate the marketing hype from the reality.  So many of the ERP vendors have been on an acquisition binge, acquiring older ERP systems and then trying to supplement them with everything from soup to nuts, thinking that this is what they need to do.  In many cases, they are making things worse!    Unless these acquired systems are re-developed with a common tool set or architecture, they run the risk of being no better than loosely coupled applications. 

With the current state of the market, it is my opinion that customers shouldn't be looking for one package to do everything, just everything important!   This is likely to change rapidly over the next several years.   So when you're speaking with your potential ERP vendor, ask where the pieces came from, how and when they were developed, and how many customers are using the "enterprise-wide" solution so you can relate this to your particular enterprise.   Then decide for yourself if what you're being offered is really an ERP contender or just a pretender.