Just wondering
Since ERP vendors have been in the press so much recently, I've been thinking about the real value of ERP systems. I guess I would define real value for a corporation as something that sustainably improves profitability. In most cases, such a competitive advantage would have to come from some kind of unique position in the marketplace. For example, it is easy to imagine an ERP system can further reduce the unit costs of a cost-leader in a particular environment (say, manufacturing). Whether a unit cost reduction is worth the initial expediture is one that you'd have to work out, but it is pretty clear that such savings could manifest themselves. Is that sustainable? Since your competitor can go out and buy a similar system (possibly even learning from your mistakes) and reproduce your cost environment, it just doesn't seem like a long-term winning solution.
Now, what do ERP systems offer companies that do not compete purely on cost? I suppose all companies have some kind of accounting requirements that can be met with ERP packages. You could see that installing an ERP might reduce costs (read: headcount) in the back-office operations of a company. But, is that really a sustainable competitive advantage? Such cost savings are easily reproducible and might have little to do with competitiveness in a environment that isn't very sensitive to costs (say, fashion).
I don't think that companies make hugely irrational investments in these systems and, overall, I'm bullish on the ability of IT to help competitiveness, but I'm not sure what the rational is for off-the-shelf systems sometimes. Is it herd mentality? Can the systems be customized enough to provide a unique advantage? Is just using the system well a unique advantage? Just wondering.