How To Use ERP Systems in A Company

First, an ERP system needs to provide enough flexibility to allow the business to have
options, but not so much that the implementation becomes overly complicated and
costly to complete. Utilizing industry best practices (and by definition a product with a
solid footprint in your micro vertical) is often a good starting point; process modeling
tools and techniques can then help define the high level processes, diving deep into
task level definition only in areas where processes are complex, vital to delivery and
key to either compliance or customer service.

It is also important to consider the stability and maturity of the product. While older
style products may provide solid and dependable availability and reliability, there may
be some trade off in terms of the flexibility and dynamism you often get from a more
leading-edge solution. The important thing here is to understand the balance you are
making and the impact of this on your internal capability to support and manage the
product going forward.

Any business case will have an identified set of tangible benefits and a return on
investment (ROI) defined. Any ERP implementation will also bring with it a number of
intangible benefits and it is these that will actually define the success (or otherwise) of
the project. These improvements in visibility, control, information and automation are
where the real value in any enterprise software project will reside, but traditional ROI
calculations tend to dismiss these in favor of hard measures (stock turn ratio’s,
reducing latency, etc.). A balanced business case will include both tangible and
intangible benefits and actually focus on value from your customers’ perspective – as
this is what will ultimately drive future growth.

Conventional wisdom states that an ERP implementation always goes over time and
over budget, and never delivers the value or benefits that were envisioned at the start.
This, to a greater or lesser extent, is true with almost every implementation. The key
to managing this issue is to understand the dynamics of driving this kind of change
program and to see the project as less about IT and more about business
transformation.

Big bang implementations that seek to deliver every facet of a solutions capability into
all areas of the organization are at the very highest risk of failure. As problems and
issues are encountered the natural reaction of the team is to slim down the scope and
manage expectations downward so that, in the end, you replace one IT system with
another without really deriving the benefits the new platform could have brought to the
organization.

The solution to this is to take a top down approach – starting with the higher level
management functions and letting this access to information drive the product deeper
and more broadly into the rest of the organization. Understanding the pain points and
barriers to success within a business are a great starting point to driving
understanding where the initial focus needs to be applied. Business modeling tools
can be used to effectively define in detail where process delivers you market
advantage, while still providing management with discretion in areas that are less vital
to the service you deliver to your customers.

One important aspect of any implementation is the skill level, system understanding
and market awareness of the implementation team – including both your staff and the
vendor team. Our view is that it is vital that the vendor team understand its system
completely, and the business team understands its business. The more crossover you
can achieve with the initial knowledge transfer, the better value the two teams will
deliver with the final solution. This is a great start, but a third dimension – industry
best practices – is proving equally important in quickly delivering a workable solution.
This requires subject matter experts to not only understand all aspects of the software
design and implementation approach but also to have direct and deep micro-vertical
experience in the client’s line of business.

Implementing an end-to-end ERP solution is a little like trying to change your slice of
the world. It has an impact on every person’s role in the organization – it will change
the way you do almost everything across the organization. These changes can be
disruptive and disorientating for many people and without the right buy-in at all levels,
the project will quickly flounder. You drive adoption by delivering small “wins” along
the way.
By ensuring people understand how their lives will improve, and providing a little taste
of this future state, you ensure support to the project and support for the changes.
This will not happen by itself, through some kind of osmosis or in any kind of “viral”
sense. Getting this to work is a process in itself that needs careful planning, diligent
execution and ongoing measurement.
Key to this is the belief and continued demonstration that the end solution will meet
the needs of the business. Losing track of this balance between driving the
organization forward and supporting business as usual is a death knell for any project.
Ignoring concerns and issues here will lead to people, teams and divisions calling a
halt to the project at a later stage if their needs are not adequately addressed. Every
person that touches the project needs to have a shared belief that the system will
work for the organization and that servicing your customers is not going to be
adversely affected by the introduction of new processes and technology

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