Putting the Enterprise Into the Enterprise System

Davenport’s article “Putting the Enterprise into the Enterprise System” discusses the pros and cons of Enterprise Systems. These systems gather data—manufacturing, sales, logistics, financial, etc. , and then pull this data into a central warehouse that helps companies make informed business decisions. However, the Article’s main theme is, that while these can be powerful tools for an organization, the adoption of a cookie cutter solution may be counterproductive.
The part that most interested me was the Article’s discussion that very often a software system designed by the software experts may, in fact, remove the competitive edge of that company. While we tend to think of computing systems as enhancing operations and making them more efficient through faster communication, automation, removing the need for people, etc. , I had never thought of them as having the potential to remove a company’s competitive advantage.
Competitive advantage, of course, is doing something different that makes your company better than the others. The difference, as cited in the Article, is typically the service, speed of delivery, etc. , and not the product itself. If, however, you and your competitor all sign up for the same or similar systems that define your business methods, then you begin to operate the same. Now all you have to compete on is price, which is going to squeeze margins.

Of course there is a way around this, as the Article discusses, and that is to customize the system to match your existing processes and differentials so that you get the benefits of the efficiencies where you want them, but still maintain the uniqueness that makes your customers continue to come to you. This Article should be read by any company that is about to embark on the integration of an Enterprise System into their organization.
The Article gives a lot of good pointers, particularly on the last page of the items to consider and the need for people who truly understand the company’s methods of operations and DNA to ensure that these carry on even after the software is introduced. For the cost investment of such software, it is vitally important that an organization comes out with a product that makes them better and stronger and doesn’t get pulled down to be just another one of the pack.