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Developing a Strong ERP Strategy
When companies decide that they need to introduce enterprise resource planning (ERP) software into their operations, this isn’t a decision that is made lightly. Many organizations that have achieved success in the marketplace have become accustomed to doing things a certain way to generate positive results.
However, decision-makers understand that even when things are going well, they can always be better. ERP technology is designed to take a deeper look into a company’s business processes to identify areas where potential improvements can be made. This is the overarching value of an ERP solution.
One of the most important steps involved in implementing an ERP system developing a strategy. Trexin wrote that this plan of action serves as a map that will essentially guide the ways in which the system will be put in place and outline its use on a daily basis. In addition, this strategy must also closely align with the information technology infrastructure already in place and how the system will be integrated into it.
All of this groundwork must be laid prior to vendor selection and of course, the initial stages of implementation. Here are some helpful best practices on how to create an ERP strategy that will make the installation process a smooth one:
- Identify and address IT issues first: The delivery of data that can be used to guide a company through the changes that need to be made to improve productivity, efficiency and revenue generation is the foundation of a good ERP system. However, the IT systems currently in place must be able to support the installation of a platform that will help deliver these outcomes. According to Trexin, many organizations may need to build custom interfaces to ensure that the system can access certain information and deliver relevant data to decision-makers. The IT professionals working inside of a company will be a key part of this process.
- Set budgetary guidelines: An ERP implementation will often require a lot of upfront costs to deliver positive backend results. However, Essential Software Solutions wrote that it is not uncommon for the installation of an ERP system to exceed initial financial projections. Therefore, it may be wise for companies to allocate a certain amount of funds to support an implementation, as well as contingency dollars in the event the project does experience any cost overruns.
- Plan for integration challenges: There will be times when a new ERP platform won’t be able to communicate with a legacy system effectively. This can result in the delivery of inaccurate or incomplete information to decision-makers. Trexin suggested the best way to mitigate these instances is for an organization to rearrange certain business processes that will allow the two systems to communicate with one another.
- Create a change management plan: An ERP system will only be was effective as the people who know how to engage with it on a day-to-day basis. Training is an important part of the ERP implementation process and getting staff members to understand how to use and embrace the new platform can be a challenge. For this reason, a change management protocol that continually reinforces the need to get staff members to understand the importance of the system and the need to use it correctly will be an ongoing process. This is one step that should never be ignored.
- Conduct a risk assessment: Despite the value of an ERP system, during implementation, there are things that can go wrong. The system that is being used currently may not support an additional platform or the IT department may not have the adequate tools to successfully install the software. Decision-makers should identify the areas where snags can occur and work to address them before the actual installation begins. It is much better to be proactive as opposed to reactive in this situation.