Tuesday, September 20, 2011

ERP is a powerful tool, but look before you leap

ERP is a powerful tool, but look before you leap

AN ERP system is a very powerful computer tool and organizations can gain a lot of competitive advantage by implementing an ERP system. Unfortunately, it is observed that many ERP projects have not been effective and hence unable to achieve the results envisaged.

As the cost of an ERP implementation project is high, it is critical for an organization to make the project a success and start deriving benefits out of it as far as possible. But what is it that makes an ERP implementation project successful?

A well-defined project organization structure that details the project planning, execution and monitoring mechanism
An attitude that stresses on business transformation instead of process automation
An approach that brings about the proper integration of people, process and technology through effective management of change

Companies need a well thought out, comprehensive process to help plan, guide and control the entire ERP implementation effort. Before the entity-gritty of software selection begins, management should know how current strategy, process and supporting system work and if any changes should be made before the new information system is introduced. The pre-implementation stage is the time to re-consider the way you do business and to make a detailed analysis of the requirements and the expectations of the new information system.

Optimization of business process rather than technical innovation should stand in the focus of an ERP implementation project. Start defining software needs by examining current process that govern your flow of information and material throughout the order-to-delivery process and ultimately the entire supply chain. There is a common tendency to shortcut this very important activity but you will pay - sometimes dearly - in time and money for avoiding this essential step.

Take the time to evaluate your ERP plan before you commit to software acquisition and installation. Doing it right the first time is the only way to go. There are many people eout there who wish they had taken a brief pause to evaluate their direction.

1 comment:

  1. You are right that organizations can gain a lot of competitive advantage by implementing an ERP system and it mainly depends on the choice of ERP used as no ERP is suitable for all.
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