We haven’t covered ERP solutions outside of a direct supply chain context very much at Supply Chain Digest, but we had some opportunity to do this very well this week with our Videocast on Selecting ERP Systems for Mid-Market Companies.

That broadcast, now available On Demand (see ERP for Mid-Market Companies), was simply excellent. It was structured in an interview format between me and David Dobrin, president and founder of B2B Analysts LLC, a small research and consulting firm focused on ERP solutions.

I have known of David for some time, primarily when he was a well-recognized analyst at Benchmarking Partners. I didn’t know until this week he also had been a product manager at QAD, an ERP software company - that kind of experience gives you great insight, as I can attest from my own software industry experience.

David said a lot of things during the broadcast worth considering. One really stuck with me: “There are a lot of good reasons for implementing an ERP system. Just make sure you have one of them.”

The point goes beyond ERP to any supply chain software application. It means simply that in ERP or any area of technology, you have to make sure you are not reaching for a software solution as the answer to problems that are really more about process and people, or issues that simply aren’t worth the cost and pain of a technology implementation.

To take the extreme example, for awhile it was not uncommon to hear companies (or rather, usually CFOs) talk about one of the big benefits of an ERP implementation being the ability to close the company’s books a lot faster each month/quarter. Nice to do, I suppose, but how much does that really add to shareholder value?

Separately, commenting on another SCDigest article, reader Scott Roy of Blue Bunny wrote: “There are many opinions why ERP implements have failed. I think all that ended up happening was the automating of poor practices. Senior management writes a check and has tactical managers try to drive change and improvement. The tactical managers were in no position to do it. When third party mercenaries are brought in, they implemented solutions that worked somewhere else.

He added: “In parallel to ERP, 20 years after S&OP (Sales and Operations Planning) was conceptualiziing, people are finally getting it right. What seems to be happening is those tactical managers that were tasked to put in S&OP over the years (managers who drove tactical improvements) have moved up the corporate ladder and are in a real position of power to giving leadership and take ownership.”

Finally, “I draw the correlation from personal experience where management was sold a bill of goods and did not have a clue of what they were buying into. They then delegated the project to tactical mangers and said change the world (business)! The only ways these things work is when Senior management is driving the change and taking real ownership in.”

The takeaway from all this: whatever the category of software, fight like heck to avoid going down a technology adoption path that is almost sure to lead to pain and problems. My experience is that in most companies that have a challenged software implementation, many people in the company could see the problems coming well in advance, maybe even from the very outset in terms of the project having the wrong mission, but still the project moves forward towards the train wreck around the corner.

It takes guts to call out the elephant in the room, but sometimes it has to be done.

I’d love your thoughts on this.