If you are a CIO or head of IT for a small or mid-sized life sciences startup that is preparing to go to market, you have a lot of things that would keep you awake at night. Whether your nightmares are about clinical data management, or regulatory compliance, or social media, there is one persistent and recurring challenge that always disturbs your slumber: “What do I do for our ERP solution?”
"If you’re faced with the ERP challenge, my recommendation is to choose the Enterprise Approach. Take the risk, provide the leadership and reap the return"
Starting down the ERP selection and implementation path is not for the faint of heart. In small companies it can become a major business disrupter and stress small IT and financial organizations to the extreme. The good news, and bad news, is that there are a lot of options. This article will use two case studies to recommend and demonstrate the best business approach to use in selecting your ERP. Warning - the approach is daring. How daring depends on the culture of your organization and your willingness and ability as a CIO to get in front of your management team.
Let’s review the top-level challenges you will have to face to get your ERP in place in Figure 1. Development
funding and expense management is your company’s life blood at this point. How do you convince your CEO and CFO to make this an important enough business priority for a major investment? How do you convince your other C-level officers to give some of their precious funding to you?
Every part of your company is evolving, and moving at ludicrous speed. How to you successfully bring everyone aboard this new train? Worse, how do get them to accept the process and control that will accompany the new ERP?
Your IT organization is evolving as well. You are trying to implement major systems with minimal resources and budget. Will a project of this scale push your team over the edge? Do you have the skills within your team to take on this giant?
The business environment you envision for your ERP has to be the one your company will evolve to in the next few years, not the one you have today. While others are thinking “now”, you have to not only think “now”, but a year from now; two years from now; five years from now, etc.
This is tough mind frame to get your senior management into. Your CMO is knee deep in clinical data and submission prep; your CFO is worried about expense control and future funding. Your CCO wants to know how you’re going to support his commercial analytics and his mobile sales force. You must show the leadership and motivate the business leadership needed for a successful project.
So how do you approach your ERP solution selection? At a high-level, there are really only three approaches you can take:
Status quo: Continue using your current financial platform; implement small point systems as needed for inventory, purchasing, etc. Plan on replacing the system within a year or less, with a more difficult implementation; plan on validation challenges; plan on limited functionality and expensive integration development.
Short-term: Choose and implement a set of lower-cost applications, either in the cloud, or on-premise. Plan on replacing the applications in two or three years; plan on repeated impacts on the company’s operations; plan on not having the features for business expansion and growth.
Long-term: Choose and implement an enterprise suite of applications that will work for your company today and tomorrow. Plan on a bigger disruption now, but only once; plan on having the features you need to expand your markets, and grow your product line.
How each approach measures against the challenges discussed earlier is shown in
Every company and every CIO will have to evaluate the risks and the fit of each approach. In today’s IT world, however, there are solution paths and options that can allow you to combine elements of each approach to get the maximum return.
Let’s examine two case studies, one from several years ago, and one from just yesterday, and how they met this challenge. For the sake of brevity, the case studies are shown as a series of bullet points.
In case number one, Sepracor opted to take on the risk of the long-term solution, and they achieved huge business value while being able to expand in volume and in market with minimal impact on their key processes. Their success was assured by the strong leadership of their CFO, and a “we can do it” culture.
In case number two, FORUM Pharmaceuticals also opted for the long-term solution, with the same goals, and similar leadership and culture. The difference is that the Cloud, and the new Applications-as-a-Service architecture, significantly reduced the cost and the risk, to make the potential return even greater.
Both companies chose the long-term approach. Yesterday, that was both huge operational risk and investment on that path. Today, the risk and expense are significantly reduced, allowing you to bring in the capabilities and functionality of an Enterprise system on day one. If you’re faced with the ERP challenge, my recommendation is to choose the Enterprise Approach. Take the risk, provide the leadership and reap the return.