Call it the bane or boon of an ERP system, companies do not have a choice but to upgrade to a higher version. There are various factors which drive the decision to upgrade namely de-support of the current system by the ERP vendor, availability of new features in higher version which have the potential to give a strategic edge. Typically companies choose the upgrade path to avoid the de-support problem and hence what it finally does is a pure as-is technical upgrade. This has multiple benefits in the sense that it is least risky and also can be done in a shorter timeframe. But once in a while it makes sense to have a look at the new features which can bring efficiencies in the process.
R12, the current ERP version from the Oracle basket, has come out with some new features which can result in high efficiencies at a holistic level. Typically companies struggle in quantifying the business benefits in terms of ROI to make a business case for the upgrade. One way of looking at it is in terms of savings in user time which may be utilized in other areas and/or the savings involved in changing a business process to suit the ERP vanilla process. Another way is to eliminate the current customizations which potentially become a high overhead on the system. But it does not make business sense to change a business process which has a strategic intent to fit it into the ERP process. It is a matter of a cost-benefit analysis which will give the future direction. Talking about upgrade, there are typically two approaches. One is upgrade from the current system and the other is a complete reimplementation. Companies typically avoid the second approach because it proves to be quite expensive. This option works well if a company has built too many customizations and struggling to maintain it and hence is ready to start with a blank sheet of paper.
So what does R12 offer? Well, it has quite an appealing look and feel though people may differ on this view. The major change has been an architectural change which is close to Fusion. So if Fusion is the future roadmap of your enterprise, moving to R12 is the logical step. As far as functionalities are concerned, there has been a major revamp in the Finance functionalities. Oracle now allows Sub-Ledger Accounting though companies can choose to stick to the original Set of Books organizational structure. Some other features like Multi-Org Access Controls allows data control across Operating Units and hence will help in minimizing the number of responsibilities which need to be created. Sourcing Optimization, Externalization and Reverse Auction (these are available in 11.5.10 as Mini-Pack) have the potential to bring in high efficiencies to an organization’s Sourcing needs. A much improved XML Publisher can replace some of the custom solutions built around the label printing process. And the list goes on ….
So what drives these features? Well, study of the best practices across various businesses drive the decision on what features to include in future versions. And a lot of effort goes in doing this research and understanding the benefits out of it. And in numerous cases it has happened that a particular business process in a particular company has been incorporated as a module and offered in future versions.
Please post your comments and I will be more than happy to discuss.