Wednesday, October 5, 2011

ERP is often misunderstood

The need for and principals of Enterprise Resource Planning (ERP) systems are somewhat universal.  Streamline operations, reduce costs and become more profitable through a unified repository of information.  Mange materials, labor, and equipment better to drive more efficiency in your operations.  The real challenge is differentiating the needs of the enterprise from medium and small businesses. 

Large businesses implementation of an ERP solution is different, but no less stressful than how a mid size or smaller company makes changes.  A larger company will typically be able to allocate more resources.  Making a change to core systems is never an easy undertaking.  It takes careful planning.  With employee resources already stretched from economic strain, smaller companies must take the time to make sure implementation will be manageable and afterwards there is ease of use. 

A recent conversation with a CFO related the frustration held by many.  “I get so many, perhaps dozens of calls every day about cloud-this, and efficiency-that.  I need someone to tell me in plain English how their solution addresses my challenges.  I do not care about buzzwords or statistics.  I can calculate the return (ROI), just give me the facts”.

Most ERP systems are arranged in modules that are aligned with a department or functional role in the organization.  ERP solutions are a necessity, but they must be affordable and manageable.  The key is how a particular solution leverages technology to improve a given business process.  The system must be solid and run on a reliable platform.  Businesses need to invest their time in the solution, not the hardware needed to run the solution.

There are no static solutions.  Even new systems must evolve and change with time.  When choosing a solution it is important to keep this in mind along with what you really want to accomplish and which modules of the ERP system will be necessary.  Who will complete your team?  A dedicated project manager, system integrator, consultant, internal liaisons to the software and hardware vendors.

So why is why is ERP misunderstood?  It has in itself become a buzzword that is supposed to make people excited that this is the magic pill that will fix all the problems that have piled up over so many years.  No such solution exists.  What exists are a number of systems designed to address a specific set of challenges.  How well your challenges match with a given solution will, depending on budget, determine the success of any given ERP system.  

ERP is misunderstood, because too many make the implication that if you have “one” your problems will go away.  People operate their businesses, not machines or software.  People do business with people they know and trust.  And above all, people do business with people they like and are like themselves.

I have an associate who runs an Ecommerce business.  I asked him one day why his business card does not list a website, just his name, a phone number and email address.  He said “Because people do business with people.  The website is just a vehicle to get you where you want to go.  Everything is based on the relationship we build together”.

Dolvin Consulting does not have all the answers, but we are connected with very knowledgeable people who do have the answers.  What we have is your best interest at heart.  Contact us today to see how we are different.  We are here to help and only consider ourselves successful after we help you achieve your goals.

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