(Don't) keep calm and wait for your provider's web version





The promise of "we are coming out with a web version soon" is one of the most commonly heard statements from the traditional providers in the shipping ERP market. This simple statement overshadows a complex technical issue that has a lot more than a commercial or operational challenge behind it.  


It is highly likely that most of your existing software system were sold to you on the basis of an upfront license, and that the server or the program was installed in your office. That the case with more than 200 companies that our market analysts have spoken to and researched. The database is yours, and you probably paid a license for it as well and most likely built some customizations of your own for reporting or some import/export scripts at the very least. It is also highly likely that you've spend significant amounts of time and money, customizing that program and that database, either by using the vendor, or on your own, using contractors on developers on staff. It is also likely, that very little of that code that was customized is documented, much like a change in the piping in the seawater cooling lines on the bottom of the engine room, programmers worry about result and less about the ease of understanding what they did when someone else tries to change it again. If this sounds familiar, the good news is that you're in the same exact condition as 99% of shipping companies in the market. 


The bad news, however, is that your existing vendor is unable to build a web version, and never will release a real cloud based product. Web versions are a generic code that all clients run, and that exact version has to accommodate all different types of workflows by what we call 'Admin On/Off' functions. None of the changes you customized can be restoratively transferred into a web version. Technically its possible, but the cost will be in the millions and your provider will not use the funds you paid for the license some years back, to fund this cost. Further, if the provider will come and offer you to move into a new version that doesn't have all the customizations you did, you will use the opportunity to open and RFP and see if there are better products out there. Your provider understands that as good as you, if not better. The winning tactic here is "extend and pretend", keep telling you that the web version is coming soon, and just hope that you keep paying AMC while suffering quietly. There is no real ability, or intention, to deliver a web version to you. 


The sooner we accept this fact, the clearer our decision making process will become. In surveys made of over 150 ships, the annual spending on IT (licenses, servers, man hours, customizations, integrations) for a typical 20-30 ship company ranges between 100K a year for high efficient companies, and up to 3.3mm a year for the most inefficient public companies. These costs are spent in vain, for anything between 10 and up to 35 different software systems, and the majority dont share the same database or even the same data. Any dream of using Power-BI or AI/ML, will remain a dream unless you have a budget of millions. The use of a web based fully integrated ERP for the entire company, for a 20 ship company, should cost around 100K a year, with no upfront cost other than some data migration. Data migration cost depends on how your current data is set up, but in the worst case scenario that's a one time cost of about 10-50K which is not outrageous. Remember, that's what most people spend on their existing, underperforming IT system architecture.


So in essence, you have a 15 year old Skoda, with a custom build electric system and retrofitted gearbox, and you keep investing to upgrade and make it run, while for a fraction of the cost you can drive a Tesla D100. How is that a difficult decision ?


#cloudbased #erp #shipping #maritime

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