According to the Forrester, implementing an ERP at large companies range from $50 million to more than $500 million. Proffessor Thomas H. Davenport arguess that competitive advantage might just come from implementing SAP for less than we make.
An ERP imposes generic procedures, new organization, and modifies the culture. The company must have a clear understanding of the business implications of implementing an ERP, because the huge investment in the project could be jeopardized, and the very business model. An ERP comes with “best practices.”“SAP isn’t a software package; it’s a way of doing business.” The question is, is it the best way of doing business for your company? Make a serious consideration that making a major modification on the ERP is most times not feasible.
Companies with high differentiation strategy could dissolve their sources of advantage in the moment they take standard procedures. Fast-growing high-tech companies , on the other side, have ERPs as a way to ease the growing pains. But some companies want to use their ERP to free their people to be more innovative and more flexible.
For example most international companies the differences in local practices remain so high that to allow to tailor their operations to local customer requirements and regulatory structures could be a real advantage.
There exist a federalist model, though, that establishes a core of common modules that all units share, but they allow other modules to be tailored locally. This method is far more complex, but, when well implemented, gives the best of both worlds In this model we have to take a time for a profound study to determine what should be common throughout the organization and what should be allowed to vary. 