Enterprise Resource Planning is a business process management software that businesses adopt which allows businesses to integrate various functions into one system to integrate processes and information across the whole business.
All the processes that are crucial to running a business can be managed through ERP: technology, services, and human resources.
But according to The 2017 ERP Report 37% of businesses realised less than half of the benefits they expected from ERP deployment.
Many businesses make the mistake of rushing into an ERP system that isn’t right for their needs.
Vendors can be eager to make sales, therefore skimping on understanding what the business wants and needs from an ERP system. This often leads to businesses buying unsuitable ERP systems.
How to avoid: Focus on your business’s desired outcome, preferably with tangible measures (e.g. reduced order fulfilment time, reduced inventory costs, ability to sell to customers online) and work backwards from there to find the most suitable solution.
We have seen businesses insist on customising a new system as a way of avoiding the hard decisions on changing poorly performing processes.
It’s important that you’re not just using an ERP as a crutch for inadequate processes. Don’t strive for a perfect system, be aware that you may need to take a process in a new system that is 80-90% right for your business.
How to avoid: Have the courage to change a high-value process to do the right thing, not just the wrong thing faster.
Leaving your operational staff out of the loop often leads to passive (or even aggressive!) resistance to a new way of doing things.
Make sure you educate and incorporate your team members in the ERP selection process; they’re the ones who will use these systems on a daily basis, so it’s important that they are involved in the process.
How to avoid: Involve the people doing the “real work” in the decision-making process around the evaluation of process and system selection. Their opinions are important because they are the ones who will be dealing with the consequences of any new system. They may also be able to give feedback and ideas from a different perspective.
Not enough training, testing and run-throughs of scenarios can be problematic when searching for an Enterprise Resource Planning solution. We cannot emphasise this enough.
One of the most common reasons that ERP implementation fails is that people lack adequate information about a process or technology to adequately test it.
This can lead to delays, and loss of productivity.
How to avoid: Ensure that the operations staff involved in testing have enough opportunity to test systems properly, even if means taking them away from their day-to-day work for a period. It is costlier up front but is cheaper in the long run.
From our experience, it’s often with field staff who have been told to use a new technology without being shown how it’s going to make their job easier. It’s no good handing someone a tablet or a smartphone with complicated technology on it without running them through the how and why first.
The key is to step into the shoes of the person doing this task, be it a driller on a rig, someone fulfilling an order in a warehouse or delivering a shipment; try to understand how they do things, then make it easier for them.
We recommend spending most of the time in the process analysis and testing/training phases.
This makes the process longer but the time devoted to improving processes and training people on delivery has a multiplier effect on the efficiency of the business.
This hasn’t changed too much over the years, and we recommend the following major phases for an ERP project.
When employees collaborate, and planning and implementation are well structured, ERP will bring nothing but benefit to your business.
Have you got questions about ERP Consulting? Contact Leap Consulting today!