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13 December 2018

ERP software vs. IWMS: best of friends or worst enemies?

Organisations that want to reduce Facility and Real Estate Management costs and increase productivity at the same time often opt for an ERP or IWMS solution. In my previous blog, you will have already read a little on what these systems can do for you and what their strengths and weaknesses are. To help you make an informed choice, in this blog I will outline a couple of things you should take into consideration when comparing these two systems. These considerations reflect three different perspectives: operational management, IT and investment.

White Paper - ERP versus IWMS

This white paper explores the benefits and risks of ERP and IWMS software from three different perspectives: business, IT, and investment.

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Company perspective: Reluctant to make large adjustments

The core business activities and supporting departments - such as FM and RE - each have their own challenges. Modern ERP solutions are primarily financial systems and are not as good as an IWMS solution when it comes to support for the vast majority of daily, operational FM and RE processes. The result is that organisations - should they choose to use their ERP system to support secondary business processes as well - have to adjust their ERP configuration to be able to support these specific processes.

In practice, this is something that organisations are reluctant to do. The ERP landscape is very complex due to the large number of processes, users, dependencies and connections to other systems. Any adjustments to the ERP configuration can potentially disrupt the core business activities. As such, every single adjustment needs to be carefully prepared, implemented and tested. Organisations that have tried to use their ERP system to support FM and RE processes often come to the conclusion that employees ultimately create a ‘shadow system’ (in Excel, for example) to circumvent the lack of ERP functionality and to keep the daily operations running.

IT perspective: Integration between ERP and IWMS is the new norm

Many organisations insist on consolidating technology towards integrated software solutions since it results in a single point of contact. Moreover, this reduces the number of installed software solutions, all of which have their own specific requirements, for example, the release policy and support. Ultimately, software should support the business; reducing the number of installed software solutions shouldn’t be an end in itself.

Since IWMS and ERP integration is now part and parcel of almost every IWMS implementation these days, you could argue that integrating the two has become the norm. In addition, the current trend towards cloud deployment reduces the complexity and makes life easier for IT departments. IWMS suppliers now implement their software solutions via the cloud, allowing IT departments to focus on supporting the core business activities.

Investment perspective: Guarantee continuity of the primary process

If an organisation already has an ERP system, they may see themselves as the 'owner' of the software, so they can use it for other purposes at no extra cost. However, the reality is that additional ERP modules need to be purchased, implemented and maintained. If the organisation opts for an IWMS, the existing ERP application doesn’t need to be modified. This ensures that the continuity of the primary processes is not compromised. User experience has also shown that, in almost all cases, it’s quicker and more cost-effective to implement an IWMS than to expand an existing ERP solution.

If an IWMS is implemented to supplement an existing ERP system, data exchange and cross-functional reporting between the two solutions may require further customisation to be able to achieve the objectives. Building and maintaining these types of interfaces and reports involves certain costs and risks, but still results in a lower Total Cost of Ownership (TCO) than expanding an existing ERP solution.

Compete or complete?

IWMS is not necessarily a better solution than ERP software; it all comes down to the scope that you have in mind for supporting secondary business processes. When you’re making this decision, it is important to find the right balance between financial, business and IT objectives. Want to brainstorm about the possibility of implementing an IWMS solution at your organisation? Don’t hesitate to get in touch.

Jos Knops
Director Global Product Marketing

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Want to learn more about the differences between ERP and IWMS, their strengths and weaknesses, and the key things you need to consider to make an informed decision between the two?

Download the full “ERP VERSUS IWMS, compete or complete?” white paper.