Our team regularly speaks with mid-market manufacturers and distributors who are considering changing ERP systems. We enjoy the chance to offer insight as they consider their current ERP implementation, the challenges they face and their future plans related to investment in enterprise software.
As part of these conversations about changing ERP systems, we’ve been informally tracking some of the reasons why mid-market manufacturing and distribution companies begin pursuing an ERP selection project and changing ERP systems in the first place.
In many cases, we hear teams discuss compelling business reasons for changing ERP systems including improving the level of integration between their current ERP system and other mission-critical applications such as CRM, e-commerce, warehouse management systems, supply chain portals, quality, reporting and other applications.
Common Challenges When Changing ERP Systems
Here are a few snippets from recent conversations that illustrate typical challenges when changing ERP systems:
- “Our company has an over-reliance on 3rd party applications, which means we have to hassle with custom programming and manual workarounds.”
- “The biggest frustration with our current ERP system? We have too many 3rd party applications.”
- “It’s a spreadsheet nightmare – we maintain data in multiple places and in multiple formats.”
What these complaints about changing ERP systems have in common is that the companies can’t easily link between multiple modules and functional business areas. This forces them to support and maintain complex interfaces, programming and custom coding to achieve a workable level of integration. This impacts precious IT resources, creates multiple data directors, and drives inefficiencies throughout the organization.
“You Are Here”
In our experience guiding ERP selection projects, companies achieve the best business outcomes from changing ERP systems when they take a close look at their current state of business processes, and map out the bottlenecks and waste that occur from lack of data integration.
The current map gives the company an indication of “you are here.”
As an example, business process mapping might reveal a lack of quality management integration with supply chain management, compliance, manufacturing, shipping, receiving, and other key areas.
Current state maps often reveal other areas of data integration challenges include:
- Shipping, Freight
- Reporting, Business Intelligence
- CAD integration
The current state mapping effort results in an understanding of the weaknesses in the current process, and an understanding of what is possible with improved technology that integrates mission-critical data.
Final Thoughts on Changing ERP Systems
All told, an ERP project is a platform for continuous improvement. Data integration can help companies achieve key business outcomes such as improved customer service, reduced lead-time, improved quality, reduced asset turns, higher productivity and improved, timelier decision-making.
That’s why we advise our clients to start at the beginning of the ERP journey: map out the current state of processes to understand the waste and limitations.
Then, the next equally critical task is to devise the “Future” or desired state, to see how integrated enterprise technology can connect and improve business performance.
For further insight, see Ultra’s library of ERP selection white papers.