Why Flash Business Suite?
Tier 1 to Mid-Market
A growing number of manufacturers are abandoning failed
ERP implementations in lieu of mid-market solutions
A growing number of manufacturers are abandoning failed
ERP implementations in favour of mid-market solutions. It used to
be that larger manufacturers would purchase multi-million dollar
ERP software to manager their businesses. This trend is changing
as companies realize the colossal undertaking of implementing these
complex systems, the increased risk of failure, and the long road
to return on investment. Fortunately, mid-market products are now
a viable option for these companies. These solutions have undergone
significant advancements in the last few years, including streamlined
data migration technologies and easy integration of specialized
applications such as supply chain management, logistics, web portals
and services, and other business-critical applications.
Implementing a tier one ERP system is not an easy project. In fact,
a recent report indicates that the average ERP implementation takes
23 months. According to some published reports, 33% of ERP implementations
were “somewhat longer” than expected and 26% were “significantly
longer.” The same survey showed that 35% of implementation
budgets were “somewhat higher” than expected while 20%
where “significantly higher.” There are many ERP disaster
stories, which reveal that even some of the largest and most successful
companies are not immune to ERP failure.
Costs associated with ERP implementation are extensive and often
unanticipated. Most companies fail to identify the true cost of
ownership because they do not include many of the associated costs
from hardware and software upgrades, inefficiencies moving to the
new application, and other hidden costs. The total cost of implementing
a new ERP system most often includes a sizable bill from each of
the categories below:
> Evaluation / Consulting
Companies invest considerable money and resources researching
ERP systems. These costs include downtime to review demonstrations,
costs for consultants, paid evaluations, and more.
The move to a new ERP system typically requires upgrades to servers
and personal computers. Project managers often miss these costs.
Most implementations require new software or upgrades to existing
software such as databases, operating systems, terminal services,
The cost for the ERP software is only part of the total cost.
Companies should be aware of the annual maintenance costs associated
with their ERP system as well as the cost for future modules and
The training budget can consume a large chunk of the project budget
– especially in large ERP implementations. Training is usually
available only from teams of expert consultants who charge a premium
for their services. Companies are rarely able to train their own
employees due to the complexity of the software.
Many companies fail to identify data migration costs as well.
These costs may include development of migration scripts to move
data from the old system to the new system, reformatting and validation
of the old data, and the cost of maintaining the old system when
transaction history cannot be moved into the new ERP system.
Most ERP systems require a team of consultants for implementation.
The costs for implementing the system can run 4 to 6 times the
cost of the software itself.
ERP systems provide a wealth of functionality but they usually
require some level of customization and integration of third party
products, such as supply chain management, web catalogs, CRM,
Evolution of Mid-Market Products
Mid-market products have improved tremendously over the past few
years. Once providing only basic financial applications, mid-market
ERP system now rival some of their tier one competitors with such
features as supply chain management, inventory replenishment, web-based
catalogs, B2B ecommerce, and advanced manufacturing applications.
Technology is another advantage of mid-market solutions. Most tier
one applications are developed in proprietary or legacy programming
languages and support mainframe servers and expensive databases.
Mid-market products, on the other hand, typically run on PC-compatible
servers and workstations and natively support current Windows operating
systems, as well as the powerful SQL Server database.
Technology for the PC platform has improved dramatically over the
last decade providing scalability, easy upgrades to new technologies
and performance on par with industry demands.
Why Mid-Market Products Work?
Mid-Market products offer a cost-effective alternative to expensive
and complex tier one applications because companies can implement
the software in a shorter period, achieve a faster return on investment,
and significantly reduce their overall cost of ownership.
One reason for the improved ROI and lower TCO is that mid-market
products are less complex and require less training. Further, smaller
IT staffs can manage mid-market products saving the company thousands
of dollars in annual IT expenses.
In addition, many mid-market products offer customization tools,
which allow the company’s IT, staff to do most of the customization
and application integration themselves. This further reduces IT
costs and the need for expensive third party consultants and developers.
Most mid-market products take advantage of industry-standard technologies
such as Windows and SQL Server. These are the same technologies
that today’s college students are learning. Consequently,
companies with these solutions will have a wealth of potential employees
who already understand the fundamental architecture supporting their
critical business applications.
Unlike tier one applications, mid-market products are typically
developed in one development language and support one or two database
platforms. This means that internal staff can more easily keep up
with technology advances because they don’t have to manage
knowledge in multiple environments or application platforms.
Finally, many mid-market products offer import utilities and even
sophisticated data migration tools to import data from legacy applications
and external systems such as electronic data interchange applications.
Mid-Market Applications For Larger Companies
Many larger companies are abandoning lengthy ERP implementations
and legacy mainframe applications for mid-market ERP systems. The
cost savings from IT administration and annual maintenance contracts
alone often validate the decision.
Further, many spin-off companies and start-up companies with aggressive
growth plans choose mid-market products because they can evolve
with their business.
Tier One ERP applications are complex and expensive solutions designed
for very large organizations. Many companies currently using or
evaluating these systems select mid-market products to run their
businesses due to lower cost of ownership, improved return on investment,
and the ability flexibility to customize the software to meet their
unique business objectives.
Mid-market implementations are more successful, the products are
easier to learn and to use, and they now offer many of the advanced
features previously found only in more expensive products.