Seeking Smart Use of ERP? It’s All in the Planning
The smart use of ERP is based on a philosophy of integration, continuous improvement, the simplification and standardization of business processes, and the elimination of waste throughout the organization.
Implementing ERP techniques can help companies to improve their operational performance and customer responsiveness and drive positive results to the bottom line.
The most important thing to remember is that smart use of ERP should not be about implementing software but should be about the transformation of the business.
Smart Use of ERP Puts the Focus on Business Process Improvement
With smart use of ERP, the key is leveraging proven methodologies that are based an understanding of the enterprise processes and business requirements to identify areas of improvement and the reduction of waste.
In a business process improvement project, smart use of ERP puts the focus on five areas:
- Project Organization – an ERP project begins with a thorough organization of the project – including organization of business process owners to design the project scope, objectives, and measurements for the engagement.
- Current State Analysis – To fully understand what’s needed, the approach then turns to an analysis of the current processes by gathering key performance metrics and analyzing their value, such as productivity, quality, overtime, and inventory. The team develops business process mapping at a functional level for such operations as Quote to Order, Order to Cash, and Procure to Pay.
- Visioning and Education – To arrive at the definition of the desired future state, the next step is to look at what is possible with a new or upgraded technology solution. Business process education brings industry best practices to construct the future state.
- Future State Development – Transformation follows with a laser focus on designing a future state that takes advantage of the new processes and opportunities afforded by new technology. This type of business process reengineering is specific to each business process flow and identifies gaps between the current state and industry best practices.
- A Business Case for Change – As the future state vision is honed and perfected, the team then takes this vision and translates it into a credible business case for change.
Smart Use of ERP Needs Buy In
Finally, it’s key to consider that engaging top management is vitally important to facilitate the adoption of smart use of ERP.
In fact, in our role as ERP consultants, a common risk in failed implementations is the lack of top management commitment and support.
In order to get and sustain buy in from top management, it is important to make them realize that adopting ERP tools and concepts will help assure the long-term viability of the company.
Benefits of a well-planned ERP implementation effort are:
- Alignment of operations and corporate strategy
- Clear enterprise-wide communication
- Increased throughput on the shop floor and front office
- Reduced costs by the elimination of wastes
- Increased flexibility in satisfying changing customer demands
Smart Use of ERP – Final Thoughts
As the famous adage goes “it is easier said than done.” Companies face challenges in implementing ERP concepts.
In all, when it comes to smart use of ERP, having a systemic approach to the implementation, incorporating education at all levels along the way and focusing on change management will help assure success in the adoption of ERP concepts and the changes required be successful.
Contact the Ultra team to learn more.
6 Software Selection & Implementation Pain Points + Solutions
Software selection and implementation processes often present challenges of their own. To steer you around trouble and help you drive success, Ultra’s experts compiled a list of pain points and solutions to be aware of as you embark on this journey.
Jeff is the founder of Ultra Consultants, a well-known voice in the ERP consulting industry and an expert on ERP solutions for discrete and process manufacturers. Over the last 40-plus years, his companies have helped more than 2,000 organizations improve their business processes, select ERP software and implement advanced solutions.