What if an organisation loses it's Enterprise Resource Planning system (ERP)?

by Alex Roan on Jul 2, 2024

This happened to Huawei in May 2019.

President Trump used an executive order to block Huawei from transacting for information or communications technology with US organisations. An obvious impact for Huawei's mobile handset business was the loss of access to Google's android platform and services. Less obvious was the loss of access to Oracle's ERP software. The impact of this may have been bigger.

A primer on ERP and why this is hard

ERP was first used in manufacturing industries. Prior to ERP different functions had different systems; marketing, sales, finance, HR etc. This created re-work.

For example when you receive materials in warehousing or issue an invoice in sales there are accounting impacts. ERP systems are integrated. With ERP when you do something in manufacturing or sales, accounting is automatically updated.

This means ERP systems are large and complex. Think many processes and many customisations.

To implement ERP think big teams, big cost, big disruption.

The Huawei case

Slightly surprising, but this block affected the delivery of ERP services from Oracle to Huawei.

Huawei decided to build it's own ERP (metaERP). Three years later a success announcement was made.

My thoughts on the Huawei case

The thought of replacing an ERP at a large multinational boggles my mind. The claim of three years to develop metaERP is very fast.

Huawei is undoubtedly a highly complex organisation.

I would estimate 3+ years just to implement an off the shelf ERP.

I wonder how much of metaERP is a template built on the design of Oracle? It would be hard to avoid this as Huawei would be familiar with Oracle process design and no doubt would have internal Oracle process and tech experts.

One article in 2023 states that metaERP has has no faults, zero delays and zero accounting adjustments.

This is likely to be false. All complex ERPs face these issues from time to time.

Is the risk of losing your ERP worth considering?

As part of business continuity planning (BCP) organisation should have plans for everything from basic downtime to natural disasters to war and terrorism.

I don't re-call seeing loss of software license due to trade blocks. I think it's a valid risk, but perhaps low likelihood for most. Id say it's worth a brief impact study, consider:

To minimise the effort if it happens: