Monday, October 17, 2011

Using ERP Solutions to Drive Process Improvements

There has to be a fairly significant reason why a business leader would risk disrupting a working enterprise.  Even if operations are not that efficient, the potential downside of adding additional workload to an already stressed workforce and taking a leap of faith that the Return on Investment (ROI) calculations were correct, still leaves a lot on the line.  The success line here is the difference in creating a more competitive advantage over the competition, driving efficiency and cutting costs versus having to cut their workforce even further, running the risk of a takeover or worse yet bankruptcy. 

You do not need to look out the window to see the economic storm.  We all feel it, personally and professionally.  Many report that one in six families is struggling and my guess the ratio is worse for most businesses.

So out of the many choices one can make, choosing to invest in and implement a new Enterprise Resource Planning (ERP) system cannot be an easy decision.  In actuality it should be easy.  You have taken the time to sit with your trusted advisor, your finance team, your operations staff, and ojji board.  You have done your analysis, narrowed down the choices, and there you sit.  Wondering if this is the right decision at the right time.

There are many reasons not to make changes, but less and more significant ones to actually make a commitment.  Your organization may want to make changes to improve efficiency, decrease the time it takes to bring new products to market, or have more efficient communications both internally with your workforce and externally with your suppliers and customers.  These changes tend to increase the visibility and coordination between the different parts of your business.

What other goals do you have in mind and how will your ERP selection move you closer to achieving them?  What specific problems are you trying to resolve and is new software going to help you address them?  Perhaps you want to reduce your inventory levels.  Even small reductions translate into bottom line savings.  Reduce the need to expand the warehouse, reduce labor costs, and reduce the burden and tax consequences of inventory sitting on the shelves too long.  Minimizing inventory levels is paramount for those organizations that handle inventory.

In order to determine how effective a solution will be, all departments and all employees need to buy into the concept that change, however difficult, is necessary to remain competitive.  There must be a strong project leader that will encourage coordination and cooperation.  This will help to ensure that every part of the company will benefit from the new system.

When everyone “sees” the system working, confidence and productivity rise and this plays a significant role in the return on investment.  People working need and want to follow strong leadership.  The dark days of gloomy outlook have driven many to be too cautious.  Hanging on white knuckled to the life raft does not help the shop floor worker to be more productive, it only gives them incentive to show up and collect a paycheck.

There are many facets to consider when choosing a new solution.  First and foremost the software must fit your industry and company size.  In today’s market there are many ERP solutions.  The solution must fit your industry.  What works well for a hard goods parts distributor may not fit a process manufacturers needs.

Ensuring that you have the right support team made up of a trusted advisor, internal staff and a project manager from the software supplier.  Yes, you must include the ERP solutions team.  They have the in depth knowledge to know if how their solution fits and needs to be implemented.  Today’s systems are too complex to be installed without help.  ERP is not like a desktop application.  These systems need to be installed correctly on hardware or systems that have been set up and configured correctly.  There must be a plan for deployment, training and conversion.

Training is by far the largest variable and most significant portion of the investment you will make.  Do not attempt to skimp in this area.  Some companies have limited budgets and will implement over time.  Some have a pressing need to implement quickly to meet deadlines.  Either way works and budget often plays a significant role in the decision.  Regardless, everyone needs to know what to do and when to do it.  We have seen many nod their heads and testify that they are ready, only to find out no one seems to know what to do when the go-live day comes. 

It just takes one individual or department to panic and lose confidence to infect the rest of the organization with the concept that this was a bad choice that will never work.  Your organization must be united.  Effective training and rehearsing reduces the fear of change.  Shortcuts rarely work.

Buying an ERP software solution is only the first step.  Getting buy is critical for success.  You have challenges and finding the right solution match is not easy work.  Remember an ERP solution is effective when the central repository of information is used to drive efficiency across the organization.  All parts know what the other parts are doing. 

Make sure your solution addressed your challenges.  Dolvin Consulting works with your team to ensure there is a good fit between your challenges and any solution.  Understanding your real needs so that the solution delivers the process improvements needed, fits your budget, and solves the most pressing challenges is our goal.  Contact us today to see how we are different and can help you find your solution.

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