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August 25, 2016

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

Organizations that want to reduce facility and real estate management costs and simultaneously increase productivity often opt for an ERP or IWMS solution. In my previous blog, I explained 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: Compete or Complete?

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
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 effective as an IWMS solution at supporting the vast majority of daily, operational FM and RE processes. The result is that organizations—should they choose to use their ERP system to support these additional processes have to adjust their ERP configuration to be able to support these specific processes.

In practice, this is something that organizations are reluctant to do. The ERP landscape is already very complex with a large number of processes, users, dependencies, and connections to other systems. Any adjustments to the ERP configuration can potentially disrupt core business activities, and as such, every single adjustment should be carefully prepared, implemented, and tested. Organizations 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 organizations insist on consolidating technology toward 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 release policy and support. Ultimately, the software should support the business; reducing the number of installed software solutions should not be an end in itself.

Since IWMS and ERP integration is now part of almost every IWMS implementation these days, you could argue that integrating the two has become the norm. In addition, the current trend toward cloud deployment reduces the complexity and makes life easier for IT departments.

Investment perspective: Guarantee continuity of the primary process 
When an ERP is already in place in an organization, there might be a false notion that an organization already owns the software, therefore using the solution for other purposes will be “free.” However, in reality extra ERP modules need to be purchased, implemented, and maintained in order to support the secondary business processes and make the FM and RE business requirements available in the ERP solution.

When choosing an IWMS, the running ERP application will not be touched, ensuring continuity for the core business processes. Customer experiences have also indicated that implementing an IWMS is faster and more cost efficient than extending 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 customization 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 organization? Don’t hesitate to get in touch.

Jos Knops
Director Global Product Marketing

Download the white paper
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.