9 Things to Consider When Choosing an ERP Package on IBM i

Enterprise Resource Planning / Financial
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Selecting an ERP package is an event of huge significance. Considerations include functional fit, vendor capability, and implementation cost. But selecting an ERP package that runs on IBM i requires some specific considerations. We'll call this being "Viably i."


In any ERP selection, a primary concern is that your ERP vendor will be around for the long-term. The choice to buy an ERP isn't a transaction; it's a relationship. As with any relationship, you should expect it to last for a long time. You can expect your ERP partner to be enhancing and expanding the product and fully supporting you year after year. They can expect you to take full advantage of the enhancements and stay on the current release. That provides maximum value to you and keeps the relationship healthy.


So far, so obvious. But you are an IBM i shop, and you choose to stay on the platform for all the right reasonslowest possible cost of ownership, highest reliability, etc. You also know that lots of ERP vendors are fading away. Many of them have made decisions to leave IBM i as their platform of choice. Or perhaps they're just softening their commitment to support the IBM i, which may lead to a decision to leave. And why should you ever have to make that kind of move? You didn't ask to be moved.


So there's the special dilemma of selecting an ERP on IBM i. You always need to judge the long-term viability of your ERP vendor. But in our world, you also need to judge their long-term commitment to IBM i.


Unless you have a fully functional crystal ball on hand, what are the signs to look for? At this point in time, the viability of an ERP vendor is relatively easy to determine. There are signs. And many of those same signs indicate the vendor's commitment to IBM i…or not.


So let's look at the ten signs of being "Viably i."


lSMACAny viable ERP vendor must have a clear strategy around Social, Mobile, Analytics, and Cloud. If they do not have tangible deliveries in these areas, their future viability is in doubt. Even if you don't care about any of that, your vendor will not be able to compete in the market and will fade away over time. If they haven't started yet, it's already too late.


In the IBM i world, how will the vendor deliver these capabilities with IBM i at the center? SMAC is in addition to, not replacing, the core function of the ERP. Will that ERP remain on IBM i? And how much of that stack can run on IBM ior at least on Power Systems?


lNot Your Grandfather's ERPA viable IBM i vendor can deliver more than just the traditional core ERP. What additional applications can be adopted on top of the core? Maintenance management, compliance control, customer and supplier portals… The list of possibilities is long. The key is, can the vendor deliver a set of integrated extension applications appropriate to your industry?


In many cases, these extended applications will not run on IBM i. That's not a concern as such. What you're looking for is a vendor that will try to get applications on a Power Systems machine; that still provides much of the benefit of IBM i while opening up the doors to a wider world of applications. A stated Linux and open-source strategy for extending solutions is a very good sign.


lCloud DeploymentA viable IBM i vendor will have an option to deploy in the cloud. Just as IBM i is a great platform for your enterprise, it's a great platform for hosting in the cloud. But there are two key considerations:


Many cloud products do not allow modifications. Most IBM i shops have extended and modified their ERP extensively for very good reasons. While you can significantly reduce the level of modification when upgrading to later versions, going to zero modifications may not be a good business choice. A viable IBM i vendor should at least have a cloud version that allows modification.


Once a vendor moves to the cloud, there's a temptation to think that platform no longer matters to you and they can move away from IBM i. Once you're in the cloud, it really doesn't matter to the customer how the magic happens, right? Maybe…see next item.


lOn-Premise DeploymentA viable IBM i vendor will give you the option of on-premise deployment. Some ERP products are "cloud only." But you may change your mind in the future and want to come back from the cloud. Or start on-premise and go to the cloud at some future date. Or maybe cloud is never going to happen for you. In any case, moving to or from the cloud should never involve a change to your ERP. A "cloud only" solution has you locked in.


In the IBM i world, this is a key point. If a vendor shifts to 100 percent cloud, they can walk away from the platform quite easily. A committed IBM i vendor will always fully support your on-premise deployment on IBM i.


lThe SMAC StackMost likely some part of the SMAC deployment (or the extended solutions) will run on Microsoft or UNIX/Linux. This can burden you with additional personnel and skill set requirements. You're looking for a vendor that makes continual efforts to get these components to run on IBM i, or at least Power Systems.


One thing to watch out for: Some vendors will use a "surround" strategy. By putting lots of non-IBM i applications in the extended suite, the core IBM i ERP becomes "surrounded," and eventually it seems like a good idea to finish the move to whatever the vendor thinks is a better platform. Testing whether the vendor is really making efforts to support Power Systems in the surround applications will separate the IBM i people from the rest.


lHybrid DeploymentThis is a general requirement that complements the previous point. An all-or-nothing cloud is somewhat doable if you're only talking about a core ERP. But when you have a large, integrated suite of various products, all or nothing in the cloud becomes problematic. The ability to put part of your suite in the cloud and keep the rest on-premise can make your life much easier.


Here's where the IBM i angle comes in. As these SMAC and extended applications appear in your shop, perhaps you would prefer not to develop skills for them. You can have your vendor handle that for you, while you keep your IBM i applications on-premise. You have the skills to run IBM i; there's no rush to the cloud for that platform.


lSize MattersIs the vendor big enough to make the required investments? Twenty-five years ago, people could develop a basic ERP in their garage with three people and a dog. These days ERP products contain millions of lines of code. The extended ERP suite and SMAC stack adds greatly to that scale. Only large-scale vendors can really deliver all of the above. All others fade away.

That applies very much to IBM i. Is the vendor big enough on the IBM i? Is there enough revenue associated with specific IBM i products to ensure the vendor has the necessary resources?


lGot SkillsHaving resources isn't quite enough. They have to be the right resources, with IBM i skills that can be difficult to find in the market today. Does the vendor have a plan for sourcing, developing, and maintaining those skills? Most viable ERP vendors have some amount of offshoring going on. What's the plan around those offshore resources?


Here's where having a cloud strategy comes in very handy. When a vendor offers a cloud version, that vendor becomes their own biggest customer. That vendor not only has a much greater incentive to maintain the needed skills, that vendor also has a much larger revenue base to justify keeping those skills. So a healthy IBM i cloud equals a healthy IBM i vendor.


lTotal CommitmentEven though there's enough size and skill, the difficult question is always the future. Things change, and decisions get made. What can you determine about the vendor's actions that give a glimpse into the future?


Let's look at the incentives. It may surprise you to learn that ERP vendors are not charitable organizations. They exist to make money. They make money by delivering value to their customers. But where the money comes from is the key.


Years ago, ERP companies were driven by new sales. The received wisdom was that you needed to swap your ERP every few years. Relationships didn't last much longer than the purchase transaction. License sales were the foundation of company revenue, and sales were driven by keeping up with the competition functionally. The viability of an ERP company could be judged by license sales growth.


License sales still matter, but they now take a back seat. ERP companies must live primarily on maintenance revenue. So the viability of an ERP company can be judged by customer retention. ERP companies now must focus on long-term customer relationships based on ongoing investment in their products and consistent upgrades by their customers. The relationship has to be deeper and more consistent, and product innovation is designed to encourage upgrades and footprint expansion, not as much new sales.


The ERP market has matured. Weaker players are shaking out, stronger players are doubling down on innovation. Company strategies focus more on continuity and smooth upgrade paths, not disruption. Cloud and other strategies are designed to bring customers ever closer by having almost daily contact.


That shift to long-term relationships has forced ERP vendors to show their hand over the last few years. If they lack the resources to compete, you can see the lack of investment. If they lack the will to focus on IBM i, they have already taken visible action to convert customers to their preferred platform.


But if the vendor has shown the commitment to invest in an IBM i product, that commitment is unlikely to change. The laser focus on customer retention means that investments made over the last few years are very likely to continue. Radical changes in direction are no longer likely.


In It for the Long Haul

Selecting an ERP today is a long-term relationship choice. You want a vendor partner that is always innovating and supports you over the long term. They want a customer partner that stays upgraded and adopts new and enhanced functionality as it is delivered. Together, there's value on both sides for a long period of time. Which is all you can ask of a business relationship.


So too for IBM i. The signs of a positive future for an IBM i vendor are all about ongoing relationship:

  • Ongoing product innovation driven by customer needs and industry expectations, delivered as much as possible on IBM i or Power System
  • A strong focus on customer upgrades and staying current with releases
  • Upgrades on IBM i, not on some other "platform of the future"
  • Increasing application options outside the traditional ERP core
  • Flexible choices on deployment models, not a rigid go-forward plan forced upon you


Using these nine signs, you should be able to tell who is "Viably i." At which point, you can proceed to select the best choice for your enterprise based on functional fit and your other selection criteria. And you can be confident of your future on IBM i.