Enterprise resource planning (ERP) integrates internal and external management information across an entire organisation, embracing finance/accounting, manufacturing, sales and service, etc. ERP systems automate this activity with an integrated computer-based application. Its purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders.
ERP systems can run on a variety of hardware and network configurations, typically employing a database to store its data. Here are my 5 top tips for successful ERP strategy planning:
1. Too often, a company will not know exactly what it wants from its ERP from the outset. Without proper clarification of the implementation plan, it can be flawed from the start, leading to complications further down the line. All firms should draw up a detailed business requirement document to establish a clear vision of their goals, including measurement tools to gauge success. There is a great deal to take into account, with any number of processes to consider – from manufacturing, logistics, inventory, shipping and invoicing, to sales, marketing delivery, billing and human resources – so it pays to get it right from day one.
2. Having formulated the plan, the next ‘must’ is to ensure the appropriate resources are available to guarantee the strategy is implemented to its full potential. Companies that spread their staff too thinly, without giving them sufficient time to learn the ropes, will suffer in the longterm. A steering group to manage the project team’s resources can be very useful to this end. Bringing in external resources to cover the time of permanent staff can help free them up to be completely immersed in the ERP prior to the handover. Underestimating the amount of time and money needed to implement a lasting ERP can lead to a missed opportunity, if the system is not taken to its full potential. The costs of support, as well as disruption to staff, make any perceived upfront savings a false economy.
3. A new ERP system will benefit the whole company, so it is invaluable to have everyone involved from the beginning, so that all of the staff buy into the project. It helps to run an inclusive implementation strategy that ensures the whole project team is heavily involved with setting up the system, so they are fully versed in its procedures when the time comes to go live. Everybody learns together and it is a good idea to run workshops to train those who will teach the rest of the company. It is vital to draw up a blueprint of the training system, so the whole company can learn the fundamentals of the ERP system.
4. It is worth entering the process with an open mind and a blank sheet of paper. If you go in with a narrow vision of what needs to be done, you could miss other opportunities. It is easy to look internally and pinpoint what needs changing, but the foresighted company will look outside the box and identify other methods of improving its systems. Bringing in an external consultant to give a fresh perspective can also pay dividends.
5. Any implementation strategy organised on an ad hoc basis, whereby extra requirements are tacked on as needed, will more often than not end up in trouble. Moreover, it is human nature for employees to try adapt the system to meet their own needs, so the product can drag on and become unwieldy, as individuals fail to look at the bigger picture. The project team need to keep a handle on scope and insist that the end product is delivered strictly to the original specifications. “Scope creep” can easily force the project over budget and render it no longer fit for purpose. It is vital to focus on the deliverables and then add any necessary supplements flagged up in the implementation.