Better processes could be used to find and plug up market and revenue “leakage,” and add agility to enable, for instance, the building of products to order. Austvold cited as an example a car that could be built in only five days after a customer specified desired features.
Another benefit? An easier time complying with laws and regulations, such as Sarbanes-Oxley, which requires certification of processes used to report data such as revenue recognition. “If Morley Safer or someone like that from “60 Minutes” shows up at your door, you know you’re in trouble,” Austvold observed. “But if you have something that says that this rogue person in Malaysia who was doing that thing was doing it on their own and wasn’t doing it as a part of a corporate initiative, it won’t bring the whole company down. Yes, it’s a bad person, but we can get rid of that person and fix that problem.”
But perhaps the biggest benefit? “We’re seeing real savings in managing customer and supplier interaction. And it changes the business model of most of the software that we own or operate today. It pushes the actions beyond the ERP footprint and requires that you actively start thinking about infrastructure,” Austvold said.
While “ERP did a great job of improving processing behind the firewall, that is, behind the four walls of your organization, it does very little to improve processes and collaboration with key customers or trading partners,” Austvold stressed.
Companies that have spent up to $15 million dollars for ERP packages and have achieved only 60 to 80 percent success rates are prime targets for low-cost up-front integration solutions that Austvold pointed out can be done for “well-below $100,000.”
“Research of ours has shown that better than 80 percent of all kinds of integration efforts … have been done by what I call a hand-coded method, which is to write some code and extract some key data out of (for instance) SAP and transform and load it into PeopleSoft or Seibel or whatever the case might be,” he said.