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Surviving the ERP Journey
The other day, I was on the phone with a CIO who can name the exact date when his company's first SAP implementation launched, even though he worked elsewhere at the time. "Sept. 6, 1999, a day of infamy. Everybody's lawyers were involved. It was a mess," he recalls, able to joke about it now that the environment is stable and working well.
In fact, these days he's a reference customer for the German enterprise resource planning (ERP) software giant, the subject of our cover story this month ("SAP Comes Down to Size"). Like many midmarket customers, this CIO wishes SAP understood his business in greater depth. His best bit of SAP veteran advice is to avoid custom modifications. "Use it out of the box," he says.
That same advice echoes throughout our story. "We paid a lot of money for this software, and we now need to leverage it," says Jim Walsh, vice president of IT at Tumi Inc., a $200-million luggage company in South Plainfield, N.J., that runs mySAP. "The one way we can leverage it is to use it as recommended."
With more than two-thirds of its 34,600 global customers and 30% of new orders coming from the midmarket, SAP's 3-year-old campaign to become the dominant ERP player in this fast-growing business segment is paying off. And its hybrid sales model (relying on both direct sales and channel partners) shows a level of commitment that midmarket IT executives notice. "Buyers who are interested in SAP software want to see an SAP person in the room," says analyst Jim Shepherd of AMR Research.
But the career risks inherent in an ERP project are hardly lost on CIOs, as Thornton May's CIO Habitat research shows. "Only after two or three well-meaning CIOs leave the company in career body bags does the ERP system get deployed," he observes. Yet only 1% of 136 executives surveyed view the underlying technology as their biggest barrier to success. (You guessed it: It's the people and the difficulty of business process change that trips everybody up.)
Our case study this month also involves an ERP system -- Oracle's EnterpriseOne—and the change management hurdles one midsized company faced during its arduous transformation to a unified multinational ("Taking the Global Road"). Imagine the complexities of bringing 13 different ERP systems down to one, and maybe that single ERP system you're wrestling with won't seem so dreadful. "It takes a godawful long time, but the tough part is over," says CEO Michael Hammes of Sunrise Medical in Boulder, Colo. "The tough part is the culture." (We guessed that, didn't we?)
Beyond the world of ERP angst, we look at how CIOs who report directly to CEOs "manage up" in the relationship. As more midmarket IT execs report directly to the chief executive -- more than half of you already do, as our reader surveys indicate -- the challenge of moving at the CEO's pace is becoming a necessity ("At CEO Speed"). The secret for CIOs who thrive in the CEO zone is decisiveness backed by due diligence. As author Linda Tucci puts it, "Don't go floating an idea without a battleship of data behind it."
Finally in this issue, we welcome attorney Matt Karlyn as our newest columnist in The Essential Lawyer. Karlyn will delve into various IT legal issues that CIOs confront these days, starting this month at the intersection of disaster recovery and force majeure clauses in vendor contracts. We'd love to hear what you think about this new column or any of our stories, so drop me a line anytime.
Maryfran Johnson, is the founding editor in chief of CIO Decisions. To comment on this story, email editor@ciodecisions.com.
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