Monday, October 10, 2011

How well will your ERP solution fit your business needs?

There are a few things you should consider before investing in an Enterprise Resource Planning (ERP) solution.  Actually there are many things to consider, but there are a few fist steps to consider.

Why?  Why would you consider disrupting your business operations to install something new that may not address your real business challenges?  There are often many nice features of any new software.  Solution providers can often address their existing and potential new client challenges with additional features that save time and effort.  But, are these features really going to make your staff more productive?  Nice to have, but necessary?  Do they address your need for efficiency?

For example, when looking at a new car, the manufacturer may have added a blue-tooth connection for your cell phone.  A nice feature designed with safety and convenience in mind.  A nice feature if everything else on the auto fits your needs.  But, what if fuel economy is the driving need?  The most fuel efficient car may not have this nice new feature.  How long will you use the auto, what are the long term trends of fuel economy?  Similarly, a nice feature in an ERP solution may benefit one person, but this is “Enterprise” software.  A solution designed to integrate an entire organization.  What are the long term fuel economy or productivity benefits?  In the industry we often refer to this as the Total Cost of Ownership (TCO).

Is your organization trying to consolidate a hodge-podge collection of solutions that were added-on over the years?  Are there redundancies in your current infrastructure?  Is the current solution technically obsolete?  Perhaps you need to add an Electronic Data Interchange (EDI) partner and your existing solution does not have that capability.  Perhaps you need to add and integrate credit card processing or an Ecommerce solution.  There may be more benefit to selecting a solution that has all these features fully integrated.  No matter how careful you are, every time you manually handle data it will get corrupted.  It is just a matter of time. 

An ERP solution integrates the organization by sharing a central repository of information which helps to drive efficiencies.  When modifications to the ERP solution to address needs not natively addressed often creates very common issues that will doom a new solution to failure.  Some modifications are a necessity and as long as they do not change the core functionality they are generally okay.  But, if you need to make changes that affect the basic flow of information, you are in for a lot of headaches.

 Are there industry specific solutions that are more suited to your needs?  What is your competition using?  Are they following you or are you following them?  Do you want to differentiate your service capabilities?  Most consumers will choose to do business with those that they like and are like themselves.  Customer service makes the difference.  Will your solution enable and empower customer service personnel to service your customers?

It is also important to consider any technical environment changes needed to support a new solution.  Will you need to retrain or hire new people with new skill sets?  Will you be able to cut overhead by eliminating extra positions that have been automated by a new solution?  What are the energy requirements of a consolidated solution versus the mix in use now?  Will a hosted solution make more sense?  There are pros and cons of any solution.  You should take the time to explore if now is the time to make the transition to a hosted (cloud) solution. 

At some point in the future economies of scale will make hosted solutions a better choice for most small businesses with mid size companies following.  Only large companies will have the resources to house their own solution.  The need to compete globally drives the need for more functionality and hosted solutions are an economical way to deliver this functionality.

So where do you begin?  Start by documenting your business processes.  For example, how do you interact with and pay your suppliers?  Do you exchange information electronically with suppliers and/or customers?  What printing requirements do you need?  What paper drives your operations?  For many a pick ticket is the piece of paper that ties the various departments together.

With Dolvin Consulting as a trusted advisor we hope to help you define your primary pains.  We talk about your budget to address those challenges.  Finally, we discuss who is affected by and makes the decision to implement changes.  Every company we talk to has some level of pain.  Not many have the budget to address those challenges.  Even less are willing to make the hard decisions necessary to help them get to the next level.

Because of its transparency, most do not see the glass ceiling they are pressed against.  Let us help you see a new future where you have the integration and tools necessary to compete.  Contact us today to see how we can help you achieve your goals.

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