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.

ERP - A business intelligence application

ERP (Enterprise Resource Planning) is a way to integrate the data and processes of an organization into one single system, using sub-systems that include hardware, software and a unified database in order to achieve integration, to store the data for various functions found throughout the organization.

The term ERP used to refer about how large organizations of the industrial type planned to use organizational wide resources. Today ERP is used in almost any type of organization it doesn't matter whether its large, small or what industry it falls in. How do we know what software system can be considered ERP? First, it must provide an organization with functionality for at least two systems or more.

However, many of today's ERP systems can cover more than just two functions and integrate them into one unified Data Base. Human Resources, Supply Chain Management, Customer Relations Management, Financial, Manufacturing functions and Warehouse Management functions can be found on modern companies under one umbrella - the ERP system.

The Key to ERP is integration. Its main goal is to integrate data and processes from all areas of the organization and unify it, to provide ease of access and an efficient work flow. ERP Systems usually accomplish this through one single database that employs multiple software modules.

The ideal configuration is then to have one ERP system for an entire organization, but organizations that are very large have been known to create an ERP system and then add external interfaces for other stand alone systems considered more powerful or able to fulfill the organization's needs in a better way.

The Ideal ERP System
The ideal ERP system would have a single database for all areas of the company and contain all of the data for various software modules, such as:

Workflow management, quality control, bills of material, manufacturing process, engineering, etc.
Accounts (payable & receivable), general ledger and cash management, fixed assets.
Training, payroll, time and attendance, benefits.
Purchasing, Inventory, supplier scheduling, claim processing, order entry, supply chain planning.
Activity management, time and expense, billing, costing.
Call Center Support, service, commissions, customer contact, sales & marketing.

ERP and Productivity
Before ERP systems appeared, in most organizations each department had their own operating system, data and database. The problem was that many of those systems would not be able to communicate with each other, so for example the financial of a company would have been on a separate computer system than the Human Resources information, thus complicating the processing of certain functions.

When a company sets up an ERP system, all aspects of the organization can work in harmony. As a result the organization enjoys increased productivity and may use less types of software.

Implementation of an ERP System
Implementing an ERP system is not an easy task. It takes considerable planning and consulting. The timeline for an ERP implementation may range between 3 months and more than 1 year.

ERP systems are extraordinarily wide in scope and can be extremely complex for many organizations. For instance, Changes on staff and work practices might be required. It is advisable (and more cost effective) to use specially trained ERP implementation consultants and not only the "in-house" IT staff.

Ownership of the project of the most important traits that an organization should have when implementing an ERP system. So many changes take place and it has such an effect on almost every individual in the organization, that it is important to make sure everyone is on board and will help make the new ERP system a success.

Organizations may implement their customized ERP system using ERP vendors or consulting companies. 3 types of professional services are needed when implementing an ERP system: Consulting, Customization and Support.

Consulting: responsible for the initial stages of ERP implementation, training, workflow, etc.

Customization: extend the use of the new ERP system or change its use creating customized interfaces and/or underlying application code. Some things may still need to be built or customized for an organization's specific needs. Support: Technical support and maintenance of ERP systems.

Advantages of ERP Systems
There are many advantages of implementing an EPR system:

It's totally integrated.
It has the ability to streamline different processes and workflows.
It is easy to share data across various departments in an organization.
It improves efficiency and productivity levels.
It provides better tracking and forecasting.
Its costs are lower.
It provides improved customer service.

Disadvantages of ERP Systems
ERP's advantages outweigh disadvantages but here are some of the most common obstacles experienced by organizations:

Lack of skills and the inexperience of the workforce may delay its adaptation to the new system.
Customization can be limited.
The organization might need to reengineer some business processes.

For more information kindly visit: http://www.eresourceerp.com

Please Contact us at:
TMA House, 1st Floor,Road No 16, Plot No. 6,Wagle Industrial Estate,Thane (West) 400 604, Maharashtra, Tel: +91 22 25827692/+91 22 25828775/+91 22 65130234

Dealing with employee resistance

CHANGE is happening faster that most people care to think about. What is more important, change is happening faster that most people care to accept. In fact, most people do not want change! The premise is that change is not always good - that somehow it will have a negative impact.

Today, technology is exponentially advancing. It is very difficult to keep pace and stay abreast with these technological developments. We are in a constant state of change and continuous change and continuous improvements in the abilities of companies to do things better, faster and cheaper is an absolute must for survival in this brutally competitive world.

The main reason for the resistance towards change are fear of failure, fear of being redundant and fear about the uncertain future.

Fear of being Redundant

The biggest fear shared by people in companies going in for ERP implementation is the loss of their jobs. As soon as the decision about the ERP implementation is announced rumours about the new system automating all the tasks and making people redundant will start floating around. When a company talks about ERP and automation, the immediate reaction is that computers will replace people.

There is some truth in this fear. There are many instances where computers have made people redundant. But what most people fail to hear is that the people who are doing manual jobs before computerization were able to get better jobs with higher salaries once they learned the new system and how to use the computers. So if a person is willing to adapt to the changes and is willing to learn the new system and new way of doing business, then he or she does not have anything to fear. There is a very good chance of getting better jobs with higher salaries.

Fear of failure

Another fear that must be addressed is people's fear of failure - the fear of not understanding or being able to work within an automated environment. Many companies make the serious mistake of not insisting on a very thorough training program that will insure the employees have the knowledge and a confidence level of adapting and using the new system to the maximum benefit of the company.

Many view training as an expense to be cut. Beware of those that claim they can reduce this expensive as the results have proven increases the hidden costs to the firm that often exceeds the perceived savings. Training is an item that should receive the most serious attention by professional implementers.

Fear of future

Openly discussing and announcing the purpose of implementation and what it means to the employees of the firm can help to address the fear of the future. Normally ERP implementation investment is made so the firm can compete and grow the business. It may be implemented to survive, thrive and become competitive.

Whatever, the future expected from the implementation, it must be made openly clear to all who are expected to participate in making it successful. A feeling of excitement must be built from the ground up, in order for people to enthusiastically embrace the ERP system as the key to their futures. Without a feeling of confidence that things are going to be good, they may never try it at all. If they decide not to give the system their full support, you will not be successful in your implementation.

For more information kindly visit: http://www.eresourceerp.com

Please Contact us at:
TMA House, 1st Floor,Road No 16, Plot No. 6,Wagle Industrial Estate,Thane (West) 400 604, Maharashtra, Tel: +91 22 25827692/+91 22 25828775/+91 22 65130234

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