IT strategy - It's all or nothing with ERP.

(From Financial Director)

Byline: Tom Berry, deputy editor of Financial Director.

Accurate, timely data is critical for finance directors to make forward-thinking, strategic business decisions. Information is the oil in the finance engine and financial software provides the tools to get at it. But for some FDs who invested in large financial systems in the 1990s, when large hairy beasts such as enterprise resource planning were fashionable, the huge costs of integrating and implementing systems and the constant problem of project creep cost their companies dearly.

Chris Woodhouse, former FD of Homebase, told us that when he joined the company 2001 it was already in the midst of implementing a giant ERP system from SAP. The company was employing a large number of expensive consultants to implement the system, it was planning a very high-risk Big Bang implementation across all of its stores and total expenditure on the system was on its way up to GBP30m. But Woodhouse couldn't pull the plug. "When I came on board, the consultants were roughly half-way through. Too much money had already been spent to say, 'Stop the project'," Woodhouse said.

Dennis Keeling, CEO of the Business Application Software Developers' Association, has recently published a white paper on corporate enterprise systems strategy, Does one system fit all? The paper points an accusing finger at large Tier-1 ERP systems such as SAP, Oracle, PeopleSoft, Baan and JD Edwards. "Many corporates start to implement ERP systems only to find they don't meet their expectations," the paper states. "Grand aims were rarely met ... the computer press, over the last two years, has been full of stories of failed projects, cost over-runs and customer dissatisfaction with their ERP systems."

Keeling says corporates shouldn't abandon ERP completely, but only implement Tier-1 systems in central headquarters and use smaller systems at a local level. This will reduce cost and speed up implementation, he argues.

Alastair McGill, marketing director at PeopleSoft, was less than impressed by Keeling's findings. "Most of the examples in the paper are based on one business model ... Keeling doesn't understand how the typical corporate works," McGill says. "Keeling talks about the importance of real-time ...