Truth About ERP Bolt-Ons

The truth about ERP bolt-ons reveals mixed results depending on the path you choose. In this post, we’ll discuss the good, the bad and the ugly risk associated with ERP bolt-on extensions, so you can make the right decision for your business.

Why Choose ERP Bolt-Ons?

Sometimes there are key benefits a company wants from an ERP that are not part of their purchased ERP package. A business can get missing capabilities and extend the value of their ERP with an additional application or module, fondly referred to as a “bolt-on.”

ERP bolt-ons are modules that provide very specific functionality or technology to complement ERP systems. CRM, advanced supply chain management, vendor relationship management and HR modules are typical examples of bolt-ons.

Tips for Understanding ERP Bolt-Ons

There are a few basic concepts to understand about ERP bolt-on extensions:

• Not all ERP bolt-ons are equal. Like so many things about ERP, simplicity is elusive and things can get complicated fast if you’re not prepared.

• Interfaces may be needed since the systems may not have been designed to work together in the first place. These programs physically extract, transfer, and load data between separate databases, on a less than real-time basis.

• Integration implies that application programs utilize a common database, with minimal file duplication, and data updating across the system in real time. Understand what your provider means when they say their bolt-on application is “fully integrated” with the ERP system.

• Know the degree of real-time information your business requires in the application area in question. For some functions, lack of real-time integration is a hindrance to usability.

4 Methods of Adding ERP Bolt-ons

Each technique for adding functionality with an ERP bolt-on comes with its own risks and benefits. Read below to understand the pros and cons for each different ERP bolt-on source.

1. From Your ERP provider. Risk Rating: Low. A bolt-on application developed by your ERP provider is a good choice.

   Benefits:
   – Adds value to the core product
   – High chance of being fully integrated
   – Same platform
   – Good customer support

   Risks:
   – ERP consultants prefer you become competent with the core ERP package first
   – Best to implement the bolt-on at the original creation
   – Easier to find a new ERP package that meets the desired capabilities

2. From a Third Party Company: Risk Rating: High. As an alternative to developing additional functionality, many vendors use third-party applications as bolt-on modules.

   Risks:
   – Clumsy and inefficient
   – Tend to have data redundancies and integration issues

3. From Your ERP Vendor’s Partner: Risk Rating: Medium. Reliable ERP providers and implementation consultants offer their customers bolt-ons developed by partners to help their customers get more out of their own ERP systems.

   Benefits:
   – Potentially successful for all parties when there is a harmonic convergence of platform, interface, and integration

   Risks:
   – Interfaces are difficult to design, develop, test, and support
   – Significant impact if failure occurs

4. From a Non-Partner: Risk Rating: Very High. Think twice, and then one more time before implementing or integrating any unsupported solution!

ERP Bolt-ons can be life-saving, efficiency-boosting technologies—if implemented correctly. Ample due diligence during your evaluation period can help you avoid encountering ugly headaches later.