Today, many companies use ERP (enterprise resource planning) to track important data, gain operational visibility, review financial performance and communicate across geographic boundaries. For example, a manufacturing company uses the system in almost every aspect of their planning, from budgets and reporting, to detailed inventory and production scheduling. ERP allows companies to streamline processes, improve efficiencies, manage demand, enhance customer service level, make better and faster business decisions, reduce costs and ultimately increase return on investment (ROI).
Here are some key guidelines to drive ERP success in your business:
1. Goals and Project Plan - Setting goals and having a project plan is important for decision makers to react to new information and fine-tune the project to fit their business needs. A dynamic project plan helps to eliminate scope creep and keep costs low. Usually, a phased approach is used, particularly for growing organisations to focus on the functionality that is most important to meet their business needs, to learn as the implementation process goes on and to adjust their project plan as needed. Companies may consider incorporating employee feedback from training and daily operations into project planning, as these employees will best understand how ERP will impact their daily jobs.
2. The Right Team - A team with the right expertise is required to assess business areas that need to be improved prior to implementation, as well as monitor and evaluate the project plan to ensure that the ERP implementation is aligned with corporate objectives and runs as smoothly as possible. They should be able to identify the most important criteria, build in contingency plans and consider the results of actions and appropriate reporting for right decision making. Generally, the team should consist of people with business analysis, ERP, and technology procurement expertise.
3. Procurement Best Practices - A procurement best practice should be in place to design your selection process, request for proposal, evaluations scorecard, and demonstration scripts around actual business requirements. These requirements include functionality, cost of ownership, ease of use, integration technologies and capabilities etc. As ERP is a long term investment, the business also needs to evaluate ROI, implementation capabilities, the proposed software's development path and reliability of the vendor to provide critical development and post-implementation support activities in the long run.
4. Organisational Change - No ERP system fits any business perfectly. The company either adapts to the ERP (huge change management) or modifies the ERP to fit the business (technical change management). However, ERP initiatives can only succeed if all stakeholders adopt the required changes. To address the ongoing change brought on by ERP implementation, the company needs to foster engagement, understanding, and cooperation of those impacted by ERP-driven changes, including users' adoption of new business processes, changing of working methods, communication channels, and software tools. While this is just the tip of the iceberg, the take-away should be that organisational change management must be addressed as a discipline within the project, much like project management itself.
Sign up for CIO Asia eNewsletters.