Benefits of ERP implementation?

The greatest benefit of an ERP implementation ought to be that it makes your company more efficient in areas that are strategically important for your company. If financials and reporting are your only current issues, you may not need a true ERP system. A system that focuses on financials or just a better reporting package may suffice.

I would suggest looking at what today keeps your company from performing as well as it should. If these obstacles can be made more efficient by an ERP system, dive into the search with those specific problem areas in mind. Automation, in and of itself, might not be enough of a payback for a long and risky ERP implementation project.

My clients typically are looking for improvements that automation can bring in terms of a faster order to cash cycle, less time spent massaging spreadsheets for financial reporting and demand planning. I would also expect that some improvements will be natural products of the implementation process itself - including data clean-up and improved segmentation of your company's products for purposes of production planning and sales analysis.

I would be happy to discuss your specific situation if you would like. You can contact me via my profile here on Focus or at my firm's website www.RJMC.net .

Most of the benefits in an ERP implementation comes from process improvement. The key to achieving these improvements is to clearly identify the potential areas of improvement, and to make sure in your selection process you are asking the potential vendors to show how they will help you achieve these goals.

When people ask me that I usually answer that they must not look at ERP implementation as a software installation, but as a full process review in their company. Companies keep on doing things the way they did in the past and forget to update the "way to do" things. ERP implementation is, aside from the benefits software usually brings to the company, an opportunity to review the "way things are being done".

When people ask me that I usually answer that they must not look at ERP implementation as a software installation, but as a full process review in their company. Companies keep on doing things the way they did in the past and forget to update the "way to do" things. ERP implementation is, aside from the benefits software usually brings to the company, an opportunity to review the "way things are being done".

Another good analogy we give people is that ERP is like exercising. There is not much short term benefit (unless you are looking to reduce your weight) - but it has great long term health benefits.

Similarly, an ERP will keep you fit and competitive over a period of time by make your processes streamlined and efficient as other replies have put it

cheers!

Rushabh

www.iwebnotes.com

Enterprise resource planning (ERP) systems are typically used to replace a disparate set of individual systems strung together in a complex and clumsy manner. ERP packages offer a solution to this while bringing specific and tangible business benefits.

• ERP systems make it much easier to integrate systems across multiple locations.
• Most ERP systems run on a single database, which means there is only one data warehouse to manage and maintain. This single database system also means there are fewer points of failure in your system as a whole.
• The processes that go into fulfilling a customer order are automated and enhanced by a successful ERP system. It creates a software flow chart for each step in the process to give direction to the whole.
• Every employee in the chain sees the bigger picture and becomes more accountable for their role in order fulfillment.
• ERP systems can speed up the manufacturing process through automation in areas such as procurement and production planning. This can help reduce the costs of carrying inventory and increase inventory turnover.
• Simplified supply chain operations mean you gain more responsiveness in terms of both quality control and timeliness.
• ERP systems enable you to remain competitive by taking advantage of the latest technologies in your market segment.

Regards,
Jeyanthi
http://www.binarch.com - provides ERP for small to medium level business.
91-44-4501-4442
info@binarch.com

John,
This is a huge commitment that needs to be fully investigated before undertaking an ERP implementation. ERP are great tools for certain types of businesses. The selection of the right ERP needs to be carefully scrutinized and a lot of time needs to be allocated to ensure that a particular ERP matches your company. I've lived through a few of these and here are some things to watch our for.

1.) Is your company prepared for this type of project? An ERP implementation is a COMPANY initiative, not an IT project. Everything your company does will need to be documented, analyzed and reviewed. This needs to be done BEFORE you begin looking at ERP packages. This will stress the entire organization and requires people from many different departments to be dedicated to this effort. It's a really big deal.

2.) Are you willing to change your processes to match the ERP system? You're toughest job will be selecting an ERP that most closely matches how you are/want to do business. The biggest sin you commit in an ERP project is to make changes to the base system. It is beyond costly and will haunt you for the remainder of the life of the ERP system. You will need to pay to retrofit your costly changes to the base system every time there is a revision to the base code.

3.) Be prepared for the total cost. The initial cost of the software is nothing compared to what you will spend in the future. You will need to take into consideration, consultant/vendor costs for implementation, lost productivity by dedicating people to this project. Software modification costs for each change to base system which will need to be repeated for every revision, yearly maintenance costs (25% of initial cost/year or close to it), Cost of new equipment,OS licenses, DB, web server licenses etc, additional power/AC costs, yearly maintenance on all of the above.

4.) As shown above, this is a big deal. If you do not have top level executive buy in, this will not end well. It will take much longer than anticipated (18 months plus or minus) and will cost a lot.

Things you can do to be successful:

1.) Set the expectation that this will be a hard thing to accomplish, but the rewards will be worth it in the end. Also get everyone on board that this is not an IT project, but a strategic initiative that will help everyone.

2.) Set realistic time lines. Don't even start the clock until all of your work processes have been documented and every department is thinking about how they will work with the new system. This is pre-work that often gets thrown in as an afterthought. Doing this will allow you to pick the right system in the first place. Once you have a system selected, listen to what you are being told. If the the vendor says 18 months, then plan on at least 18 months with milestones that will show you early in the project if you are on track.

3.) Get an executive sponsor. Preferably the owner of the company. It will get stressful, expensive and people will get frustrated. This needs to be managed. One possible strategy is deliver in phases. Financials usually are pretty standard and can be delivered in a relatively short period of time. Getting a win early will buy you some time. Make the process transparent as well. You don't want people guessing where you're at in the project cycle. This is where a strong PM can help.

4.) Pick good business partners. You will need their support, so choose wisely. You also want people that stand behind their work. That's why you don't want to modify the base system if possible. Then it's the vendors issue to make it work.

There is way more to say on this topic and I don't want to discourage you, but you need to know what you're getting into,especially since the total cost of implementation can be 2x - 4x the original price of the ERP package.

Best of luck and if you have any specific questions, I'd be glad to answer them.

Regards,

George
gruzzier@aldannetworking.com