With the comprehensive organization and process efficiency that they bring, it shouldn’t be a shock to anyone that implementing an enterprise resource planning (ERP) system is a big investment. As is the case with most costly expenditures, there are both huge opportunities and risks on the table.In a recent study of 192 companies with annual revenues ranging from $25 million to just above $2 billion, 66 percent reported that they failed to realize more than half of the expected benefits of their ERP investment. Aside from squandering potential revenue, these companies are also wasting an incredible amount of money. ERP systems are designed to manage the many moving pieces that are involved in the supply chain, from top to bottom – but they can’t fix your problems if you don’t know how to maximize the software.
Here are a couple tips from big manufacturers with successful ERP systems in place:
Choose Your ERP System Carefully
“It’s essential to link business objectives to your ERP strategy to ensure value is realized…” states Carol Hardcastle, Research Vice President at Gartner in their report, “Predicts 2014: The Rise of the Postmodern ERP and Enterprise.”
All the benefits that grow from successful ERP systems began with picking the right platform. Before you can see the fruits of that effort, it’s important that you consider your business goals and objectives when researching software brands.
- Efficiency Goals: Will this software help identify and eliminate clerical errors and/or redundancies in order to speed up the pipeline?
- Growth Goals: Can this ERP help double your business with the resources you currently have?
- Market Goals: Which platform will help you bring your product to market faster?
ERP can help focus your workflow needs and other aspects of business that are unique to your company.
Customize the Platform to Fit Your Business Needs
The scope of ERP manufacturing software tends to be considered a one-size-fits-all solution, yet there are still many smaller components to help mold around your specific business model and/or supply chain. Using any ERP system strictly “out of the box” is considered a detriment to the objective of implementation, and is a signal that the organization is sacrificing user productivity and quality of data reporting. Only a reported 15 percent of companies do not customize their ERP software in any way, so don’t fall into the minority.
Assign Executive Ownership
There’s an old saying that goes, “when everyone is held accountable, no one is responsible.” Which is to say that there are about a million ways that a supply chain can be compromised or slowed down in some way. Tying an ERP’s performance to an executive’s compensation plan will go a long way in assuring that there’s proper management of the more intricate pieces of your pipeline.
Invest in Ongoing Training
Purchasing an ERP isn’t the end of the investment, and viewing it as such should be considered a huge mistake. Technology is growing at exponential rates, as evidenced by these fascinating photos highlighting the power of Moore’s Law. ERP software is just a small speck in the great scheme of technology, but a huge factor in the way business is conducted every day across globe.The investment of education in this software is immensely important and the future success of your company is reliant upon it.
The cost of implementing an ERP system is certainly not an insignificant investment, but neither are the benefits that it can bring to your organization. It’s wise to consider these points once you have implemented an ERP system in order to maximize its efficiency and output. Technology is dynamic and so are your business needs – make sure you have the edge required for success.
