Advantages of Implementing IT Financial Management (ITFM) Software over Customizing Your ERP

Enterprise Resource Planning (ERP) systems, such as SAP and Oracle, have long been the backbone of many organizations, helping them manage their business processes in a unified system. 

When it comes to managing IT Financial Management (ITFM) and Technology Business Management (TBM), many organizations fall into the trap of customizing their existing Enterprise Resource Planning (ERP) systems. While this might seem like a logical step, it's a dangerous path that leads to unprecedented complexities, unnecessary overheads, and, in many cases, outright failure.

The Customization Conundrum

ERP systems are comprehensive, intricate, and designed to manage a broad range of business processes. Customizing these systems for specific tasks like ITFM and TBM is akin to forcing a square peg into a round hole – it's not a natural fit and the results are predictably disastrous.

The first casualty is simplicity. Customizing SAP structures like Work Breakdown Structure (WBS) elements, internal orders, and cost centers, among others, leads to convoluted systems that are hard to navigate and manage. This complexity increases exponentially, especially during system migration, like moving from SAP R3 to S4Hana.

Scenario Management: A Nightmare in Customized ERPs

In the dynamic world of business, the ability to compare Plan, Actual, and Forecast data is crucial. Customized ERPs, however, fall short in this regard, lacking the agility to support extensive simulations or changes in master data. They also struggle with different modulations per scenario, leaving businesses with a rigid, inflexible system that can't keep up with changing needs.

Calculation Engine: Where ERPs Fail and ITFM Software Shines

Understanding the Total Cost of Ownership (TCO) for each service and calculating unit costs are vital for strategic decision-making. However, ERPs are not built to handle these calculations efficiently, leading to inaccurate data and flawed decision-making. Furthermore, customized ERP systems struggle with introducing multi-price and tariff models, a critical requirement for modern pricing strategies.

Transparency and Process Integration: The Achilles' Heel of Customized ERPs

Customized ERPs often lack integrated transparency along the entire value chain, leaving stakeholders in the dark. Furthermore, these systems fail to offer tailored views, analysis, and dashboards for different stakeholders and personas, resulting in a one-size-fits-all approach that serves no one well.

The Solution: Embrace ITFM Software

Instead of going down the treacherous path of ERP customization, organizations should consider adopting a dedicated ITFM/TBM solution like Serviceware Financial. This software is designed specifically for ITFM and TBM, offering simplicity, powerful scenario management, an efficient calculation engine, and integrated transparency along the entire value chain.

In summary, customizing ERP systems for ITFM and TBM is a dangerous gamble that can lead to disastrous consequences. By choosing a dedicated ITFM/TBM solution like Serviceware Financial, organizations can avoid these pitfalls and set themselves up for success. It's time to step out of the customization conundrum and embrace the power and efficiency of dedicated ITFM software.

Fabian Mieloch

Written by Fabian Mieloch

Fabian Mieloch, Head of Global Presales with Serviceware, enables IT professionals to harness efficiency and strategic development by shedding light on the complexities of IT and shared service financial management. Customers profit from Fabian’s experience as an Enterprise Solution Engineer with a track record in the computer software industry as well as his skills in IT Financial Management. He graduated from German Leibniz Universität Hanover with a Bachelor of Science (B.Sc.), majoring in economics and has been supporting Serviceware prospects and customers for more than eight years.

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