Mhlnews 3580 Erp

3 Rules for ERP Implementation

Feb. 27, 2014
Reflect on these considerations when applying or upgrading an enterprise resource planning system.

Implementing a new Enterprise Resource Planning (ERP) system or modernizing an existing one through system integration is among the most difficult things any company can do. Getting all of a company’s various data systems to efficiently, accurately and instantly share data takes great care and planning. That said, there are three things you can do to help make your project go smoother.

  1. Look before you leap. By its very nature, an ERP system is comprehensive and complex. It touches on every department, business activity, function and transaction. That means augmenting an existing ERP system with such capabilities as inventory management or supplier integration requires an equally comprehensive approach to planning. Every possible need or risk that could be encountered must be identified and addressed in the planning process. Failure to do that leads to frustrating and expensive delays as programmers and managers stop their progress while figuring out ways to solve unforeseen problems.
  2. Build the right team. If there are too many decision-makers involved in the planning and development of a new or modernized ERP system, the end result is likely to be a system that can do several things only moderately well – and often at a much higher cost than anticipated. But if the planning and development of a new or modernized ERP system doesn’t include enough of the right executives and professionals, the result is likely to be a system with gaping holes. Select a mix of technical and frontline workers to serve as key players that can properly define the scope and budget of an implementation. That will help keep the natural temptation and pressures to expand the project’s scope and budget under control.”
  3. Be careful of Bolt-Ons. Many companies choose a vendor to design and install a system based on the promise that it is a proven, bolt-on system that can be customized to meet the company’s specific needs with the existing software. The problem is that instead of bolting on a proven system and customizing 15 to 20 percent of it, what typically happens is that 50 to 85 percent of the bolt-on ERP system ends up being customized. That dramatically inflates the cost of the project. It also creates lengthy delays and off-the-chart levels of frustration throughout the company.

The key to avoiding these negative results goes back to the planning process. Once a company determines its scope and budget for a new or upgraded ERP system, senior management should firmly commit to it. That will require making some hard decisions about what to customize and what stays generic.

Timothy D. Garcia is founder and CEO of Apptricity, provider of supply chain management software.

Latest from Technology & Automation

#177137895@Mustsansar Syed| Dreamstime
AI's Role in Developing Resilient Supply Chains
#146171327 © Kittipong Jirasukhanont| Dreamtime
Warehouse Market to Increase 24% By 2030