An Epicor

White Paper
9 Reasons to Retire Your
Homegrown ERP Software Solution
Before its Too Late

9 Reasons to Retire Your Homegrown ERP Software Solution Before its Too Late i
WHI TE PAPER
Table of Contents
Introduction ii
Reason 1:
Vulnerability and Isolation of Knowledge 1
Reason 2:
Immediacy and Breadth of Data 2
Reason 3:
Data Duplication and Discrepancies 3
Reason 4:
Lack of Testing 4
Reason 5:
Lack of Vision/New Advances 5
Reason 6:
Shortcomings in Systems Architecture 6
Reason 7:
Costlier Than You Think 7
Reason 8:
No Built-in Learning Management System 8
Reason 9:
Lack of Ability to Easily Integrate 9
Conclusion 9
About Epicor 10


9 Reasons to Retire Your Homegrown ERP Software Solution Before its Too Late i i
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Introduction
In todays complex business environment, it can be very challenging
for in-house IT professionals to keep up with the pace of change
necessary to sustain a competitive advantage.
Whether the homegrown IT system you have seems "fine" for now,
or your company has developed strong loyalty to a custom-built
solution, these options cannot offer you the level of protection and
security of an outside enterprise resource planning (ERP) solution.
ERP system installation is often thought of as the most risky,
expensive, and disruptive investment a distributor can make in their
business. However, you must also consider the inherent risks of a
homegrown solution. When you argue against a potential system
switch with costs, pain, and efficiency concerns, you should take a
look at them as they exist in your current system.
Compared to a robust ERP system built by a well-established
software provider, homegrown tends to be fragile and lacking in-
depth support. And while a custom-built system may seem to offer
control and flexibility, it may actually lock you into a suboptimal
solution. Some basic questions to consider include:
Is software development really your core competency?
Can you spare the programming resources?
Do you have the years and the capital to develop, test, and fine-
tune your application?
What happens if you lose the precious few resources that can
support and maintain your older technology?
What is your visibility into emerging technologies and industry
best practices that other distributors are using?
Is your system truly integrating information and processes from
all functional divisions of your organization, or do you have
disparate data sources running your business?
Cost-effective ERP solutions meet distribution organizations
demands by leveraging existing applications and technologies, while
taking the burden off your internal development resources.
For all of these reasons, it is in your best interest to partner with a
leading ERP provider, in order to advance your operations to the next
level of efficiency.
To help answer the above questions and explain the realities of an
ERP system, we have compiled the top nine reasons to weigh the
advantages of an outside ERP over your homegrown system.

9 Reasons to Retire Your Homegrown ERP Software Solution Before its Too Late 1
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Reason 1:
Vulnerability and Isolation of Knowledge
Using a homegrown solution can raise numerous challenges. For
example, what happens if your IT director is no longer with the
company? Or the programmers who developed the original application
move on to other projects, other jobs, or retirement? You may be
coding in yesterday's technology, and will find it hard to replace
resources who are familiar with and competent in those environments.
Who will take over development of the current system, and how will
they get up to speed on the application? With only a limited staff of
custom programmers, its unlikely that you are taking full advantage of
the ideas and innovations of other leading distributors or industry
consultants. You may never be able to develop capabilities at the rate of
the rest of the industry, and competitors in your market will pass you.
Items to consider
What are you planning to do about areas of the system that were coded
by people who left the company years ago? Typically, there are certain
areas that everyone is afraid to touch because they are not readily
understandable and not coded to standards. If you try to remodel those,
will they ever really work the right way?

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Reason 2:
Immediacy and Breadth of Data
Even if you were to successfully reface your homegrown system to a
modern graphical user interface and port to a relational database, you
will still be technically challenged by the core foundation of a custom
systems millions of lines of business code. Moreover, a homegrown
solution is unlikely to include some of the advanced data capabilities of
modern ERP systems:
Batch System vs. Real-Timeolder custom systems are usually
updated via batches (daily or monthly), and it is extremely difficult to
rewrite all the logic into a 100 percent real-time system. Batch
systems also typically have lengthy day-end, month-end, and year-
end processes.
Limited Historyhomegrown systems often have limited
transactional history, as the data is purged every few months. This
forces you to refer back to paper reports or information that is
stored in a separate document imaging system.
Limited or No Drill-Downsolder systems have limited drill-down
capabilities where you can view summary information including paid
A/R invoices, POs, A/P invoices, and GL entries.
User-Friendly Interfacehomegrown systems typically lack the
ability for end users to customize the interface and information to
their specific business needs, make them more efficient, and view
data that is most relevant to their job function.
Items to consider
Lack of rapid access to required information also may require extra
hands to manually track down the data, causing you to overstaff your
customer service department.

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Reason 3:
Data Duplication and Discrepancies
It can be quite challenging for company employees to get the data they
need directly from a homegrown solution. If you plan to port data on a
nightly basis to a data warehouse on an open database like Microsoft

SQL Server

for reporting, there may be data discrepancies between

your legacy system and the data warehouse.
You should ask yourself, if your reporting is going to be done off a SQL
database, why not have a core business system that runs off SQL, so
there doesnt have to be a translation layer between two separate
data structures?
Refaced custom systems usually have areas of the system that dont fully
integrate with other areas, creating inefficiencies by doing duplicate
work and creating disparate (and possibly conflicting) data sources.
These areas can include such important functions as direct billing and
A/R cash receipts.
Items to consider
Where will the data reside after a remodel? If not in a SQL-based
database, you may always have compatibility problems with off-the-
shelf packages such as Office

, MapPoint

, BI, CRM, etc. If you have to

struggle to pull data ad hoc, your decision-making may be hampered by
a lack of information.

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Reason 4:
Lack of Testing
Homegrown systems clearly are not receiving the benefits of other
leading distributors knowledge and experiences. On the other hand, an
ERP software company has to sell its solution to thousands of customers
and end users. This means there are many more end users involved in
the beta testing and ensuring the software does what it needs to do
before it is released.
What better way to instill confidence in your system than to have a
dedicated QA team and hundreds of other users testing it to make sure
its rock solid? How many people test your internally developed
applications, how much industry experience do they have, and how
many meaningful scenarios can they come up with?
Items to consider
The wide-ranging testing in real-life scenarios by leading ERP companies
helps bring best practices to bear. You may have coded a process into
your system because that was the way it had always been done at your
business, but there may be a better process that you are missing (and
others are using, giving them an advantage). Considering the
interdependencies of an ERP solution and the global nature of many
businesses today, who is best prepared to ensure that the forecasting
logic is correct, for example, or that European accounting rules
are followed?

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Reason 5:
Lack of Vision/New Advances
Up until the year 2000, it was fairly common for distributors to write
their own business systems, as it was believed this provided a
competitive edge. Now, however, technology is evolving at an
exponential pace, making it nearly impossible for small IT shops to keep
up with the changes in solutions that a business needs to remain
competitive. A distributor with an in-house IT staff for its custom system
is actually at a competitive disadvantage today.
Best-selling author Geoffrey Moores book, Dealing with Darwin,
outlines a blueprint for sustaining a competitive advantage. The key
principle is to focus on what is core to your business and provides
differentiation, and outsource context to someone who is better at that
than you.
The key question is, Should we be in the software development
business when our core competency is as a wholesale distributor?
Items to consider
The critical problem is vision. Effective systems development requires
a single vision translated into architecture. But instead of beginning
with a vision, custom IT shops often begin with bullet points or a list
of different goals and expectations.
No matter what your IT department tells you, they are not a software
company and cannot possibly operate like a best-in-class one. There
just aren't enough great programmers to meet the demands within
the distribution industry.
Software companies are in the business of not only developing their
software, but also making sure their customers are happy, and
staying on top of new trends and advances that can benefit them.


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Reason 6:
Shortcomings in Systems Architecture that Lead to Workarounds and Patches Based
on Tribal Knowledge
In most cases, distribution employees want systems to meet their
immediate needs, and they want delivery yesterday, at the latest.
When IT doesn't deliver, employees are apt to create various
workarounds, causing the company to lose the economies of scale that
can be achieved by having everyone adopt standard
operating procedures.
A major concern with a homegrown solution is that custom IT shops
don't understand systems architecturethe ideas that front, middle,
and back offices have different functions and different requirements. A
custom IT system, for example, might have good front-office analytics
running in real time, but may not be able to perform credit risk
management because the middle and back offices use batch processing.
After all, risk management requires linking current order entry inputs
with data from legacy back-office systems to provide up-to-date
exposure information. Fixing these shortcomings inevitably leads to
patches, add-ons, and workarounds.
Equally disastrous is asking each employee what they want from a
system without having a method to cut the project down to the
essentials. "Companies fall into the toy store syndrome," explains a
consultant. "Everyone wants something, so they decide to write specs."
TD Bank Group reportedly spent $4-5 million by first asking everyone
for a wish list. It quickly had a massive list, and three years later,
there was still no software to show for its ambitious plans.

9 Reasons to Retire Your Homegrown ERP Software Solution Before its Too Late 7
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Reason 7:
Maintaining Your Homegrown Solution May be Costlier Than You Think
While on the surface, remaining on a homegrown system may appear to
be the least risky choice, there are many underlying challenges and
trade-offs associated with your current custom system environment
and there is often a price tag attached.
In-house development can be much more costly than it appearsfar
more so than partnering with a leading distribution management
system. Add up the salaries of your development team, the downtime in
user departments during all phases of development, and the
opportunity cost of not putting developers on other worthy projects that
would propel your business forward. The time it requires to extract
meaningful data for executive analysis out of your database must also
be included as a cost consideration.
The maintenance of custom applications is time-intensive, slow, and
fraught with undocumented functionsand thats just for normal
operations. Dont forget the cost of downtime when outages occur. The
complexity of todays computing environments only magnifies the
difficulties and expense of implementing and maintaining these
custom systems.


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Reason 8:
No Built-in Learning Management System to Maximize Employee Adoption and
Utilization
The average end users utilization of an in-house system is typically
lower than on a standardized ERP, due to most of the inner workings of
the system being tribal knowledge, as noted above. Distributors
typically dont hire professional documentarians, so they have limited
online help screens. They also rarely have comprehensive user manuals
or documentation for end users to easily understand how the programs
and forecasting logic work. When people don't understand the system,
they don't use it as frequently or efficiently.
Items to consider
The focus of homegrown solutions is often on the features and not on
best business process flows, so they usually dont have standard
operating procedures. Your old system may be familiar to your long-
term employees, but it is likely to be quite foreign to new hires raised on
Microsoft Windows

and the Internet. How will you be able to recruit

good talent if potential employees don't want to work in a customer-
built environment, but would rather access industry-leading tools and
technology that will enable them to perform their jobs better?
Homegrown systems typically dont have robust learning management
systems to coordinate employees learning; e.g., by setting up training
agendas with due dates, recording Web-based training classes to be
taken on demand, or setting up tests to certify employees
understanding of various areas of the system. All of these can maximize
employee adoption and utilization of the IT system.

9 Reasons to Retire Your Homegrown ERP Software Solution Before its Too Late 9
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Reason 9:
Lack of Ability to Easily Integrate with Other Leading Technology Solutions
Your homegrown solution may not play well with others. In
particular, if it cannot integrate with an eCommerce storefront, you may
be unable to offer customer-specific pricing and pull other ERP data into
your online store without a lot of duplicate data entry or custom
development work. Web storefront adoption is projected to explode in
distribution, as 98 percent of retailers have a strong eCommerce
presence, versus just 18 percent of distributors. Leading distributors are
investing heavily in eCommerce, as the younger generation expects to
be able to conduct all business in the same way they do Internet
banking and shopping online.
Conclusion
While your homegrown system may seem comfortable and familiar,
chances are you are missing out on advanced functionality that could
greatly improve your business operations, employee productivity, and
bottom-line profitability. A leading ERP solution that is focused on
distribution will provide a modern technology environment now, while
also offering forward-looking business applications such as integrated
eCommerce, business intelligence, and a comprehensive inventory
forecasting module. You owe it to your business to investigate options
beyond the status quo.

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About Epicor
Epicor Software Corporation is a global leader delivering business
software solutions to the manufacturing, distribution, retail, and services
industries. With nearly 40 years of experience, Epicor has more than
20,000 customers in over 150 countries. Epicor solutions enable
companies to drive increased efficiency and improve profitability. With a
history of innovation, industry expertise, and passion for excellence,
Epicor inspires customers to build lasting competitive advantage. Epicor
provides the single point of accountability that local, regional and global
businesses demand. For more information, visit www.epicor.com.
Disclaimer
This document is for informational purposes only and is subject to
change without notice. This document and its contents, including the
viewpoints and content expressed herein are believed to be accurate as
of its date of publication, March 2012, but Epicor Software Corporation
makes no guarantee, representations or warranties with regard to the
enclosed information and specifically disclaims any applicable implied
warranties, such as fitness for a particular purpose, merchantability,
satisfactory quality or reasonable skill and care. We welcome user
comments and reserve the right to revise this publication and/or make
improvements or changes to the products or programs described in this
publication at any time, without notice. Epicor

is a registered
trademark and/or trademark of Epicor Software Corporation in the
United States, certain other countries and/or the EU. All other
trademarks mentioned are the property of their respective owners.
Copyright Epicor Software Corporation 2012. All rights reserved. No
part of this publication may be reproduced in any form without the prior
written consent of Epicor Software Corporation.



For more information, contact Epicor Software Corporation: info@epicor.com or www.epicor.com.





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