Fear Or Freedom: IBM i ERP Upgrades

February 24, 2014 Dan Burger

Major ERP implementations are like the footsteps of a giant. With each step the ground shakes and you can see terror in the eyes of everyone who feels the tremors. What if this thing fails? The path of destruction will be massive and the cost will be obscene. The fear of failing has stopped or postponed uncounted ERP upgrades. Fear can be a good thing. It can keep you alive, for instance. But it can also build confidence and inspire action.

In the IBM midrange community, ERP software has been around for decades. Having a rock-solid software/hardware combination for business computing defined the IBM midrange. It still does. Organizations that stayed current with the hardware, operating system, and the software are generally happy with their decision. However, far more companies didn’t stay current for a variety of reasons and it has led to trouble.

Whether it is homegrown or packaged software, it is not uncommon for companies to be struggling with decisions about how to modernize existing ERP. As Forrester Research pointed out in its ERP report Global, Industry, And Technology Forces Shape The ERP Landscape, companies–regardless of platform–are frustrated with their ERP systems.

The inability to generate suitable reports is one of the most mentioned frustrations, but limited integration with additional business processes is high on the list as well. And can you imagine any discussion of computer frustrations without mentioning the user interface? I didn’t think so. The biggest frustration of them all is the painful upgrade process, which includes consolidating disparate systems and migrating from one ERP to a new one.

Most of the ERP vendors, even those with narrowly defined niches, have advanced their software in ways that reduce or eliminate most of the aggravations. Upgraded implementations have picked up, but no one is claiming they have customers lined up around the block to buy tickets.

Based on the Forrester report, the line may be getting longer. Pent up demand is about to have an effect, according to the research firm. The ERP vendors have responded to user demands and have created software that provides wider access to ERP information, quicker and more current access to information, and have narrowed the gap between business requirements and ERP capabilities.

But pent up demand still has to rub up against complexity and cost.

ERP implementations remain a fair comparison to rocket science and brain surgery. And with degree of difficulty comes risk of failure. Factor in projects that get under way with insufficient resources or a poorly chosen management and implementation team and risk increases exponentially. Getting past the upgrade complexity is still a big hurdle. Advancements are being made, but ERP upgrades that require multiple jumps to reach modern releases are no slam dunk.

For today, let’s keep the focus on software evolution and business needs, with value proposition as part of the picture and leave project management for another day.

The Forrester report makes note of ERP vendors being attentive to concerns regarding improved reporting functionality. Built-in business intelligence and analytical features are taking the place of much more rudimentary reporting tools that were not designed to decipher data in real time. Integrating ERP with departmental budgeting, planning, and forecasting has advanced considerably in the past five years, which puts systems that are 10 or more years old at a disadvantage–even if those older systems pass the “if it ain’t broke, don’t fix it” rule.

“ERP is in the early stages of major changes at all levels of the application–from the look and feel of the user interface to the database and the underlying architecture,” according to report authors China Martens and Paul Hamerman. “As these changes take effect, ERP will evolve to provide more focused core functionality supplemented by a wide range of plug-in components and cloud services. Each plug-in will deliver elements of a particular ERP business process and will originate from ERP suite vendors or best-of-breed players or application development partners.”

Ross Freeman, strategy leader for System i ERP solutions at Infor, has witnessed the increase in ERP capabilities as they have played out in four product lines that have exclusive IBM i customer bases or are predominantly IBM i. Those ERP products are XA (formerly MAPICS), LX (formerly BPCS), M3, and System21.

The goal at Infor, like all software companies, is to get all users up to current software, which is generally interpreted as either the latest release and the one release prior. Freeman says Infor is having success, but corporate policy prohibits him from being specific.

Of the four ERP lines with the greatest proportion of IBM i users, Infor put its most substantial effort into rewriting and re-architecting XA. Freeman claims the users of XA have an “extremely high release currency” compared to any ERP product on the market, which is not anything you can hang a hat on, but would seem to indicate XA users are further ahead in the upgrade game than other IBM i-focused ERP products.

LX, by way of comparison, did not receive the same amount of attention. The UI was not emphasized, Freeman said, because the user base was much happier and pleasingly productive with the old school green screens. LX product releases focused on functional enhancements, Freeman noted.

“We’ve been dealing with companies that have not been compelled to leave the green screens, particularly with LX users,” Freeman says. “We’ve been on this journey for a number of years. Users had their choice of interfaces. A large faction were used to green screens and remained on them. It has taken quite some time to build momentum around the new applications with new look and feel and capabilities.”

The green-screen interface is not universally despised, although you might guess that it is from what you see and hear from many sources.

Freeman says, “If all you have is a transaction system then green screen is not such a bad idea. It’s efficient. You can put a screen scraper on it, and fundamentally it is not a bad thing. But as we change the nature of an ERP, there are expectations of a more unified business system. As more pieces engage the business processes, it gives companies a better reason to get off the green screen. Five years ago, the adoption rate of our new technology in XA was not incredible. There were many customers who remained hard-core green-screen advocates. That has changed. Obviously there are still companies that don’t change, but companies are moving to the new technology and new user interface.”

It’s not accurate to say the graphical user interface is a game changer and responsible for companies moving to move to new software. Freeman points out the greater benefit relating to the UI that has to do with functionality–analytics and the interaction with various layers of the system–rather than simply making the screen look pretty. Companies waited to move until there was clear business benefit, he says.

Integration during the upgrade process is the biggest pain facing companies. The upgrades require more time and effort than is usually allotted because of the many integration pieces, which need to be upgraded at the same time. More time and more effort quickly translate into more expense and more frustration. Freeman says this issue has delayed or postponed many ERP upgrades. He describes the typical old ERP system–with many modifications connected to multiple add-on integration pieces that have also been customized–as bowls of spaghetti making upgrades difficult.

“When the core ERP has been highly modified with custom code that no one really understands, the fear of the unknown sets in,” Freeman says. “But when we do an analysis of the modifications, we find 60 percent to 80 percent of the modifications can be dropped immediately because they took care of problems that no longer exist because the new software is better and it makes those mods unnecessary. If the ERP is deep and well established, it probably does most of what a company wants it to do. The mods have a lot to do with the UI and moving things around on a screen and making the green screen more efficient. Those customizations are no longer needed because we now have tools that allow user personalization without coding.”

Things will be better when “release transparency” is achieved, Freeman says. At that point, the upgrade process will allow application function to be extended and modified without the complexity that is currently messing with people’s heads. There will be isolated release levels that allow best of breed assembly of apps to be upgraded individually when necessary without a major disruption. That is a huge barrier to be rid of within the core ERP.

Freeman provided examples of this type of integration. One of Infor’s customers incorporates multiple core ERP instances. It has XA in several manufacturing sites, while the corporate ERP is LN and they use Infor’s SyteLine ERP as well. All are integrated. In another case, the customer is a distributor that vertically integrated by buying several manufacturers. With an integration strategy, the customer stays on its distribution ERP and the manufacturing facilities stay on their manufacturing ERP. They work together through the integration layer. There is one reporting database, one reporting engine, and a consistent user interface across all.

Infor in the early stages of offering this type of integration on a full-scale basis. It has been developed and rolled out in some successful pilot projects, according to Freeman.

Forrester is predicting that 2014 will be the year of the ERP upgrade and demand will overcome fear. I think that is mildly, but not wildly, optimistic. There are IBM i shops that are inching closer to the end of their ropes, but even though the rewards are real, the fear is, too.