My following two blogs are based on a post by Pemeco Consulting's Vice President, Jonathan Gross. They deal with the factors that influence the success of ERP adoption initiatives in manufacturing and distribution businesses.
Recognizing ERP advancements
Companies usually get additional value from two main sources when ERP initiatives succeed: simplified process automation and the capacity to make more efficient data-driven decisions. The selection process is the first step in a successful ERP implementation.
A successful decision entails much more than merely selecting a software suite that is readily available. It necessitates a thorough examination of how to properly combine business and technology. From a technological standpoint, it involves an awareness of ERP advancements that would provide value if adopted.
It also needs a detailed examination of business processes, including problems, gaps, and major drivers, from a business standpoint. Because ERP functions at the process level, a process investigation is essential.
A look at the latest ERP advancements and technologies
ERP allows manufacturers and distributors to connect their different supply and demand activities throughout their organizations. ERP has progressed beyond materials and distribution planning (MRP and DRP, respectively) to systems that give an integrated view of supply and demand, as well as inventory optimization across the supply chain. Enterprise integration has been adopted by ERP systems, and it has been extended to all functions. Finance and accounting, customer relationship management, supply chain management, buying management, supplier relationship management, production management, human resource management, service management, and project management are all tasks that companies may today combine in one.
ERP providers continue to develop in terms of enterprise expansion and decision support capabilities. Understanding trends and developments is essential when assessing ERP solutions since they may solve existing or predicted shortages. The following are some of the current trends influencing manufacturers and distributors:
- Software-as-a-Service (SaaS). This technology refers to cloud-based software that allows many businesses to share a single instance of the program or the underlying architecture. SaaS has a number of advantages, including scalability everywhere, at any time, and a decreased need on internal IT resources. Risks generally include a loss of control over vital data and a diminished capacity to change the software configuration necessary to suit business needs.
- Mobility. Mobile access allows you to do business in places where a laptop or desktop is not available. For example, mobile portable scanning technology enables organizations to measure and control labor expenses and throughput in real time. Mobile customer service apps, for example, give on-demand inventory querying and allocation capabilities to distant field support teams. The extra perks may make travel easier for corporate leaders and salespeople.
- Business Intelligence (BI). BI gives businesses the tools they need to synthesize and analyze ever-increasing retail data. Business executives rely on business intelligence (BI) to make better, quicker choices.
- Human Capital Management (HCM). Enterprise human resource planning may be made more rigorous with the use of HCM solutions. This adds value to businesses who are dealing with high turnover, demographic difficulties, and succession planning issues.
- Social supply chain technologies. These technologies make it possible for a firm, its suppliers, and its customers to become more integrated. For corporate knowledge management and work activities, the ability to form ad hoc groups, processes, and document management provides a streamlined and organized alternative to emailing.
- Environmentally friendly technologies. Certain environmental operational expenses, such as energy and water, are better tracked and managed with these techniques.
A business case for ERP selection
Clearly, the relevance of an ERP solution or associated technology is determined by the resultant value, which includes the return on investment (ROI). It also depends on how well the proposed solution addresses and meets business requirements.
The evaluation of strategies, business models, organizational structures, business processes, and employees is typical of companies that make good ERP selection decisions. The following are the three major goals of this sort of evaluation:
- An ERP business case. A return on investment study, as well as other value-based data, not only justifies the investment, but also defines the project scope.
- A detail of the company's requirements. Business process mapping is a common way to do this. This visual explanation for the operations and data that an ERP system can handle is provided by this analysis.
- An evaluation of the adaptability of an organization. ERP initiatives can only be successful if all stakeholders agree to make the necessary adjustments. A readiness assessment identifies gaps and serves as the foundation for creating a customized change management strategy.
The three keys to ERP success
Understanding how business and ERP work together to generate value is a good place to start when choosing an ERP system. The next significant hurdle is turning that information into actionable steps. To keep your company on track, consider the following three essential success factors:
- Create a strong team. Companies should ensure that they have the necessary skills to make the best decision possible. People with experience in business analysis, ERP, and procurement technology should all be on the team.
- Avoid generic procurement practices. Finding a solution provider who can assist your company in fulfilling its specific requirements is the goal of ERP selection. Generic models aren't designed to serve your business' best interest. As a result, they are unable to deliver a well-tailored solution. Designing your selection process, RFPs, scorecards, and demo scripts on genuine business demands is a best practice guideline.
- Don't cut corners in due diligence. Just because an ERP system offers the capabilities you need, doesn't imply it'll be the best fit. It's crucial to consider the return on investment, ease of implementation, and post-installation maintenance and support before making a decision. Furthermore, because ERP is a long-term investment, it is vital to assess the proposed software's development path as well as the possibility that the vendor will be there for the long haul, providing critical development and support services.
So you can see that an ERP software for an SME is a complex tool, but essential since it allows you to evolve, to remain competitive and to do more with less. So it's not just for big players and now you can equip yourself with the best tools. You just have to remember to find an excellent reseller of ERP software for SMEs who can accompany us, enlighten us and support us throughout the implementation process. Contact us for more information !