Before talking with vendors, before even starting the research on cutting-edge technology solutions, the first step must be about setting ERP requirements.
And these requirements should reflect not only today’s needs but the needs for tomorrow as your company grows and evolves.
Why Set ERP Requirements?
Many of the project teams that partner with Ultra have identified the limitations of their current enterprise systems.
Whether it is data redundancy, siloed or standalone systems, an abundance of manual workarounds or other challenges, it is clear to the entire organization that a new integrated ERP system is required to better link together the business processes of the organization so it can operate more efficiently.
Wise enterprises look to engage with expert independent consultants.
After identifying these limitations and deciding to embark on a new technology project, we find that ERP teams are often tempted to jump right into reviewing demos from vendors; however, taking the time to carefully look at setting ERP requirements is critical to identify solutions that are focused on not only immediate needs, but that have the ability to scale to meet future processes.
The need for new technology and the list of ERP requirements take many forms. In some cases, companies seek improved shipping and receiving functionality.
Distributors have their own unique needs when it comes to streamlining operations via ERP. Enterprises will have different ERP requirements with a different solution tailored to the industry and its specific requirements, and importantly, the enterprise’s future state.
Regardless of which scenario you find yourself in, though, it is important to find an ERP system that is able to meet the performance expectations that you and your internal stakeholders have identified.
5 Tips to Setting ERP Requirements
Ultra recommends taking a strategic approach to setting ERP requirements, which includes linking them to ROI, and envisioning the future state, also known as business process re-engineering.
Looking at each functional area, the project team reviews the problems in the current state and identifies best practices and ERP requirements for improved business processes in the future state that eliminate waste and improve productivity. The team thus develops a business case for change.
In such a business process improvement project looking at ERP requirements, we see five areas of focus:
1. Project Organization
With a team of business process owners, the first step is to determine the project scope, ERP requirements, objectives, and measurements for the engagement.
This leads to a business process review to define strategy, determine the maturity of your sales and operations planning, and complete management scorecards, which identify current key business metrics and determine future requirements.
2. Current State Analysis
Analyzing your current state requires gathering key performance metrics and determining their value. Examples include productivity, quality, overtime, inventory, and others.
As the team reviews the current state, business process maps are created, for example, for Quote to Order, Order to Cash, and Procure to Pay processes.
3. Visioning and Education
Before we can begin to define the future state, we need the process owners to understand “what is possible” with a new enterprise software solution and which ERP requirements are associated with each process.
4. Developing the Future State
Looking at each business process flow, we help identify gaps between the current state and industry best practices to effectively design your future state business processes.
The goal is to eliminate waste and improve productivity.
5. Business Case for Change
Each of these steps leads to the development of the business case for change, which is your main project driver and the foundational justification for your project.
Thinking ERP Requirements?
Download our “Best Practices for an Effective ERP Implementation” White Paper.
Learn More about Setting ERP Requirements
It’s key for manufacturing and distribution enterprises to avoid expensive and time-consuming pitfalls when implementing new or upgrading a current ERP solution.
Proper education and preparation, focusing on ERP requirements, will lead to a successful implementation.
A recent blog post, along with many others, describes in greater detail the means of identifying the future state during a business process improvement project.
Learn more about best practices for setting ERP requirements by attending Ultra’s webinar Setting ERP Requirements for Today & Tomorrow on Thursday, February 15, 2018.