Is a Tech Foundation the Same as ERP? A: No!

In the last post, I mentioned the concept of a tech foundation. Some might be confused, particularly since DGG focuses on ERP and business software. Since I didn’t fill in the specifics, I think it might need a bit more fleshing out.

Let’s start with an org chart. The titles and who reports to who (in this case) aren’t important. The functions are important.

The CFO, for example, has two basic functions reporting to her. The accounting and financial reporting department handles financial statements and recording transactions. The Internal Audit department assures accuracy and prevents fraud. Likewise, the CMO has sales and advertising reporting to him.

Suppose we matched up each of these functions with software that assists the function. We might come up with something like this:

  • Controller –> Accounting Software (General Ledger, Accounts Payable, Accounts Receivable, etc.) and perhaps ERP
  • Internal Audit –> CAAS (Computer Assisted Audit Software)
  • Sales –> CRM
  • Marketing –> CRM, email marketing, web metrics
  • Manufacturing –> MRP (Materials Requirement Planning)

This isn’t complete, but you get the idea.

Each of these areas has software (or tools) that supports its function. A good foundation contains tools in all the appropriate areas of the organization chart. A foundation that has more tools piled on one side of the org chart makes the organization lop sided. A good technology foundation provides all the needed tools.

The issue with this is simple: few single individuals–and few single companies for that matter–do all of this well. When you include things like CIM (Computer Integrated Manufacturing), there are probably fewer than a half-dozen companies in the world that could or would handle all of this foundation. There might very well be none.

So how do you use this foundation concept? I use it as a balancing tool. If I see a client heavily weighted (for example) on the accounting and MRP side, I try to get them to consider the marketing (web site or eCommerce) side of the chart. The best answer is a comprehensive plan, with appropriate priorities. Fix the most pressing problems. first.

I could (and may) write a book about this, but this post is too long already. Tell me what you think. Any questions?