Choosing an IT philosophy that best suits an organization

12/6/2011 at 12:03 pm by The Sage ERP Team

In this day and age, many Companies are unable to go without extensive information technology operations. It is almost impossible to run an enterprise that obtains resources and produces goods without some method of tracking them, or at the very least accounting for their distribution. This means that software and hardware expenditures often make up a large portion of organizations' budgets.

Unfortunately, such services often come at a premium and must be carefully selected when they're first implemented. This is especially true for enterprise resource planning because the difference between well-run software and poorly organized applications can adversely affect a business' return on investment and lead to financial problems down the road.

Market research firm Zoomerang recently surveyed American businesses with less than 1,000 employees to find out how they obtain their information technology services. It turns out that 22 percent actually outsource such efforts to software vendors. Of the remaining organizations that kept their IT operations in-house, 30 percent saw them constantly evolve and expand over the course of their development.

This is a crucial distinction for enterprises mulling ERP implementations because it is an important choice that must be made. When ERP systems are fully managed by the software vendor that created and implemented them, there are significant advantages to allowing them to regularly service them. After all – those companies know their applications inside and out and can quickly and efficiently administer to them should the need arrive.

Unfortunately, relying on vendors means that those organizations are likely only going to be able to offer help with their own proprietary software. When additional problems arise with programs that were created by different companies, more relationships must be forged in order to keep all the parts of a suite of applications running smoothly.

However, since so many in-house IT departments tend to expand beyond their original scopes, it isn't uncommon for costs to spiral out of a control. While vendors may be specialized and expensive, they are easier to budget for at the outset of a relationship. Consider this when choosing an ERP implementation strategy.

One final interesting tidbit from the Zoomerang study shows that a full 72 percent of small and medium-sized businesses didn't know what the cloud was. Remotely hosted software may be the best way to split the difference between these two choices but many organizations are unfortunately unfamiliar with it. It is therefore important to explore this option, which makes building relationships with vendors easier and more cost-effective.