It can be tempting to go with that big enterprise system that you’ve been reading about or, perhaps, one of the sales people has been calling on you about. However, this is a case to look very, very carefully before you leap and know what you’re really getting into.

I had a past client that went from QuickBooks right to a midrange enterprise system that was a rather expensive jump for them. With all the programming cost for conversion, the price tag was much near a million dollars than it was a hundred thousand dollars.

The key to a system is finding one that not only fits your particular industry, but also fits your particular size of company. Here’s some reasons why bigger may not be better for your system:

1. The expense can be very large moving to the big enterprise system. You might be able to get much more bang for your buck with a smaller system that could still meet the vast majority of your particular needs.

2. Very often, there can be inflexibility in the bigger system in terms of how it operates. I’ve seen time and time again where companies have had to change how they operate in order to fit the enterprise system, when it should be the other way around.

3. There can be a bigger time delay in getting an enterprise system up to speed. You could easily be talking over a year, if not a couple year, proposition depending upon the size and expensiveness of the installation. There can be a big opportunity cost associated with it.

4. There’s no assurance that the enterprise system is going to effectively work. There have been some horror stories of large companies that have spent multiple millions of dollars on an enterprise system only to find it only covers a fraction of the particular need. It’s not use your black and white thing, usually some parts of the system may work well, but other parts may be rather dysfunctional.

5. There is a tradeoff between the strength of the enterprise system and flexibility. One area that could really suffer is being able to get information out of your computer system. There could’ve been reports that you would be able to generate on the fly in your previous system. It could be a very simple process to make adjustments to the report, such as changing the time period on the report or filtering which particular accounts might be included in the report. That  could go out the window with an enterprise system.

6. You may need to go upscale with your staff. The enterprise system might be over the head of the current IT head or other people in the IT department. For example, I had one client that had an SAP installation and they had a specialist who did nothing but handle requests for developing reports in SAP. Information in the company could’ve gotten out on a much easier basis prior to the change to the larger system. No longer can the average user be able to manipulate reports and customize it to their liking. They have to feed in requests into the IT department. Suddenly, that becomes quite a bottleneck right there.

So, when thinking about that new computer system, make sure that you’re not falling in love with technology for technology’s sake or technology for size sake and ending up with a white elephant that just isn’t going to meet your needs at all.


Jon Paul, MBA, CPA, CMC, CM&AA

President, Value Added Finance Resources
Bringing new insights on results and maximizing company value