Business managed to continue to be successful since the advent of E0.1 systems. New technology existed that migrated mainframe technology to midranges and clients. Some of the first Enterprise 1.0 (E1.0) systems were in fact E0.1 in sheep’s clothing. True E1.0 systems sprung up to take greater standard process control over business. Some of these systems migrated from Financial backgrounds, others from HR backgrounds as well as Manufacturing (MRP/MES) backgrounds. The primary architecture of this generation, E1.0 systems, was Client/Server.

Below is a list of facts collected from various studies regarding ERP systems and implementations, the poster children for E1.0.

Avg. Cost to Implement and Time*

• Tier 2: $3.46M, 17.8 months
• SAP: $16.8M, 20 months
• Oracle: $12.6M, 18.6 months
• Microsoft: $2.6M, 18 months

Project Performance

• ERP projects that take longer than expected: 93 percent***
• ERP projects that exceed original budget expectations: 59 percent***
• Tier 2: Percentage of expected value achieved 68.6% *
• ERP project delays caused by lack of business-to-business planning and integration could cost manufacturers more than $1M/month**
• 85 per cent of companies surveyed had experienced delays in roll-outs as a result of B2B integration issues (which can cost over $45,000/day)**

*In ERP software comparison, SAP scores highest, but Tier 2 competitive
Courtney Bjorlin, News Editor at SearchSAP.com March 3rd, 2009

**ERP project delays cost manufacturers $1M a month
Published by GXS September 28th, 2009

***2008 ERP Report
Panorama Consulting Group: Eric Kimberling January 7th, 2009

E1.0 implicitly required greater control of processes that may already be controlled by E0.1. They also offered control of previously uncontrolled elements of business. As a result, E1.0 required the replacement of E0.1. The migration from E0.1 to E1.0 systems required abandoning the “company” way and adopting the “E1.0 Vendors” way. Many companies fought this requirement and their projects scope increased; leading to some of the cost and duration issues detailed above. But regardless of the degree of adoption of the new way a company implementing E1.0 moved away from their unique operation and toward a standard operation that doesn’t fit the business as well as a glove. Expense and risk became managing characteristics of the implementation of these systems and further dilution of a company’s “secret sauce” occurred. The competitive nature of a company is now put at risk because the system has such tight constraints that any changes in regulations, compliance or competition are effectively unreachable..

The strength of these systems, when finally deployed, included much greater visibility across the operation; especially from a financial perspective. The data rigidity required by E1.0 systems is now stronger and its impact more adverse. The scope of these systems is so comprehensive that business disruption is guaranteed. Multiyear implementations that cost millions are the norm. Opportunity costs increase dramatically as the defined process, technology and data of the existing system fall short of the market requirements and opportunity.

The alternative available at the time for business was to keep running their E0.1 systems (now derisively called Homegrown). In hind sight, those that chose this strategy may not be as destitute as you’d think. By remaining flexible and “custom”, these customers have retained a greater alignment with their core value to their customer. For those businesses that skipped E0.1, E1.0 seems to be the only solution.

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