Wednesday, July 4, 2012

Making ERP Data Easier to use and More Valuable

In the end, ERP is all about measuring data and using that data to make better, faster decisions.
According to Krigsman, “You can measure anything that you can input data about.  ERP is all about how to get data in, how to calculate data, and how to get it out. All these areas will be improved.”

Inside-ERP recently published this article.  There are some timely topics inside and it is worth the quick read.  The first thing that was designed to grab your attention was the article headline

“Where will ERP be in 2 years?”  Well, that is really not a stunner of a question. 

Enterprise Resource Planning (ERP) systems are well utilized now as they will be ever increasing in use and scope.  It is how you drive efficiency in your organization.  What you are going to see are organizations further integrating more and more of their operations under a single “ERP Roof”.  That is, they will purchase and implement new modules and further learn and utilize their existing modules.  As a footnote here, most ERP solutions are arranged in modules that match either departmental or functional roles in the company.  It actually is this footnote that determines which tier of solutions are appropriate.

Many companies have systems that were purchased to address part of their needs.  It is what they needed at that point in time or what fit their budget.  They may have purchased different packages from different vendors, say Inventory and Customer service from one and Warehouse Management (WMS) from another.  They have invested lots of time, energy and money integrating the multiple systems.  This gets cumbersome and costly as you try to upgrade one system and are forced to reintegrate the separate systems or wait until updates are available for both.  The same is true when a business makes too many modifications or customizations.  The standardization is removed as well as the stability.  

There can be a real loss of competitiveness from separate systems, because the organization cannot implement new or needed technologies quickly enough.  For example, adding new trading partners in an Electronic Data Interchange (EDI) system or adding or enhancing Ecommerce solutions, or Business Intelligence Analytics, or integrated logistics.

So this is the area where companies are going to need to focus. 

It really does not matter if the solution is in-house or cloud-based.  It is the functionality and “completeness” of the solution that matters most.  There are of course many details to consider when deciding where you solution will run, but the business needs will be the driving force. 

The article talks about simplifying the installation and user interfaces.  The user interfaces can always be tweaked to make them easier to navigate.  Executive level dashboards are likely the future for many.  You can get a quick snapshot of key metrics and then drill-down for details based on what is important to you-the-individual.

Simplifying the installation is altogether a different issue.  There is always room for improvement here, but do not ignore the fact that this is not “boxed” software.  It is often complex to implement, because the business operations are complex. 

You are not trying to tie together a word processor and spread sheet. 

You are integrating multiple departments, and lots of people and functional roles.  Good software that is affordable is going to have multiple configuration steps so that it closely matches the way you operate.  When the standard tailoring questions cannot configure well enough it is either a choice of changing the way you do business to match the software, modify the software to match your operations, some sort of compromise or consider that you have not made the right ERP selection.

Simplified is a great goal, but functionality is more important.

Enterprise efficiency is driven by the functionality and fit of the solution.  The more that is integrated, the better the right hand knows what the left hand is doing and management can make more intelligent decisions more quickly.  Remember that great functionality must be balanced with company culture.  If your people are used to working with spread sheets and you throw a major ERP solution at them without training and support, you will have the makings of a failure on your hands.  In this case it does not matter how good the solution is, it just does not fit.  A majority of the work implementing a new solution is up-front including the costs, which means that after you get over the “hump” and if you have the right solution, you start benefiting from the effort and investment.

There are a lot of decisions to be made and details considered when selecting a new installation, upgrade or replacement ERP solution.  At Dolvin Consulting we believe you need a trusted advisor to help you learn about your own organization and research the appropriate solution.  This is really the first step.  Solution providers can make all the dazzling changes they want, but until you know the driving metrics in your organization you have no way of knowing if the solution will fit. 

Replacing an ERP solution is like an organ transplant.  Consider a Heart transplant.  Would you do the operation if you did not really have to?  Would it not make sense to make sure you have the same blood type, RH factors and all those other medical terms checked?  How about the surgeon and his team?  What about the hospital that is providing the support and recovery?  Is there spare blood available?

You get it now.  This is risky and worth it, but you first need to know what you do not know.  Contact us today.  We are here to help you.  We care and want to help.  We do not know who you are so it is your responsibility to reach out for help.  Perhaps even for a second opinion.

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