Just Because Tuhund Can Do Something Does Not Mean It Should

Modern ERP systems are powerful. Tuhund is powerful.

It can automate, adjust, recompute, back-date, revalue and reclassify almost anything. But power without restraint is dangerous. The responsibility of an ERP is not to do everything it can, but to do only what is correct, defensible and sustainable for the customer.

Most traditional ERP systems reduce business reality into a web of ledgers. A person becomes a ledger, a product becomes a ledger and a customer becomes a ledger entry. These systems shape the business around accounting design instead of shaping accounting around how business actually happens.​

You buy something for 100 and sell it for 200. On paper you are delighted with a 100% profit. In reality, you may already be running into a loss, not just on this transaction but on the customer, the vendor or even the market segment as a whole.

The problem is simple. Businesses often look at selling price minus purchase price and call that profit. But in a real business environment, cost is far more complex. Let us look at where the illusion of profit disappears.

Two of the important features that make ERP successful are its ability to seamlessly automate as much work as possible and to prevent human mistakes as much as possible. In certain industries, products and services bear a relation and once product is selected, selection of related services become just a decision between yes and no. “Services with products” is the mechanism of establishing these relations in ERP. It makes adding of services a matter of two clicks, saving time as     ...more