[bluedino]

>> On the other hand, I have to question the necessity of a custom ERP and the cost and effort put into it.

I can't imagine why anyone would, either. I've seen companies spend 2X the cost of a new ERP system that would solve all of their problems on customizations and additions to an existing, outdated ERP system.

What do they end up with? Solutions that are incomplete, unreliable, and late to the game.

[moron4hire]

Speaking from experience in having built a custom ERP system:

It's often easier to convince people to change software to suit existing business operations than to change business operations to suit existing software. Usually, the person in need of convincing to change the software is an employee who will get fired if they don't. On the other hand, it's often the president of the company you have to convince to change business practices. And he might not even be entirely on-board for "that software shit" anyway. Also, programmers make a living out of learning new things, so it comes naturally to us and we don't think twice about it. Everyone else in the company is set in their ways and had hoped "all that learnin'" ended in high school.

[im_down_w_otp]

It's because almost every business believes it's a special snowflake, and thus by extension so are its technology & process problems. Given that there's almost always somebody willing to sell them a custom solution who wants to make money reinforcing that delusion. It's not all that surprising that many, many non-tech or tangentially-tech markets end up saddled with a pile of proprietary hacked together garbage software and systems.

It's shockingly rare to encounter a Principal, CEO, or COO who goes into every business problem they have with a perspective like, "I know we're not an R&D company, so almost certainly our problems aren't pioneering efforts into the unknown frontier. Somebody must have encountered these issues before, so how can I capitalize on the fact that they must have already spent the money to resolve them?"

[osullivj]

Historically, this has been especially true in investment banking, where every department, desk even, believes it's a special snowflake, and commissions their own solutions. High profitability exacerbated this. Increased regulation means lower margins, and proprietary solutions are declining.

[aryehof]

Every business is unique, and a custom solution can support that uniqueness, rather than the compromises that can need to be made with a (customizable) packaged solution.

I've seen one company write off a 100 million dollar investment in a Peoplesoft based replacement for a custom system, because it was realized that the compromises that solution required were becoming too great. Sure it was fabulous for 80% of requirements, but the other 20% became a giant sinkhole of money and pain.

[David]

Absolutely, if you have the budget to build, maintain, and support a custom ERP, it may be the way to go. But I think it's a tiny fraction of businesses where the benefits of that outweigh the extra costs involved. You have to be very large, and your issues with existing systems have to be pretty expensive, before that's the case.

Out of curiosity, do you know / can you share what kinds of problems caused the Peoplesoft investment to fall apart? What issues did they run into?

[cafard]

The District of Columbia Public Schools burned what must have been tens of millions on a Peoplesoft implementation some years ago. I guess they eventually got it running, but there was a lot of pain.

[Edit: I'm not sure DCPS was the part of the district government that felt the most pain.]

[SixSigma]

ERP is a tricky business.

10 Famous ERP Disasters, Dustups and Disappointments

http://www.cio.com/article/2429865/enterprise-resource-plann...

ERP Nightmare: Implementations Gone Awry

http://www.business-software.com/blog/erp-nightmare-implemen...

CIOs' next nightmare: legacy ERP

http://www.zdnet.com/article/cios-next-nightmare-legacy-erp/

10 ways to avoid an enterprise resource planning nightmare

http://www.bizjournals.com/bizjournals/how-to/technology/201...

[cageface]

From what I've seen some clients like the control that building everything gives them. In practice this control might be illusory because of course they don't have the budgets to replicate everything they'd get from a big ERP package but NIH syndrome is certainly not exclusive to tech people.

[David]

Excellent point. A fear we see a lot in clients is that if the system's not built from scratch with them in mind, it can't do what they need. But the TCO of a system you build yourself is usually way higher than anticipated, due to project overruns and maintenance costs. It turns out software development isn't trivial, which is why we have companies that just build software.

[cafard]

Would the new ERP system solve all their problems without customizations and additions?

[systems]

fear of radical change people are more accepting of incremental changes rather than massive radical changes

rooted in fear of the unknown, i guess!!!