ERP software is not a magic wand

The purpose of ERP technology is to support the business processes that support the company's strategic opportunities. There are some basic tenets of ERP that should guide management's actions and decisions.

There is no magic in ERP software. ERP's benefits are a direct result of effective preparation and implementation, and appropriate use. This seems obvious, but most of the organizations don't get it right the first time around. Expecting a quick fix, silver-bullet solution is a dangerous mindset.

Another matter is no amount of advanced information technology can offset the problem of a flawed business strategy and poorly performing business processes. This area, in particular, is something that ERP software implementers may not fully address because it can slow system deployment.

The companies must define a business strategy that will give them a competitive advantage or, at the very least, make them competitively equal. Then, analyze your current business processes and develop objectives. Once this step is done, the following steps for preparation, ERP software selection and implementation can support the strategic and process objectives better.

Acquire flexible ERP information technology that can accommodate rapidly changing business conditions. The high-velocity flow of information needed to support action up and down the supply chain is a major step forward for most manufacturers. It will be mandatory in the future just to compete, much less stay ahead of, the competition.

You must have the implementation led by a senior executive who has the authority to make changes happen and happen quickly. Make sure there is a sense of urgency and true accountability for completing preparation and implementation activities on time. Moving away from functional silos and creating effective cross-functional processes that are truly integrated via an ERP system is not an easy task. When ERP is not fully integrated into day-to-day business operations, however, it is not likely to be very beneficial.

If enterprise integration or more advanced supply chain management strategies are to have any chance of complete success it will be due, to a large extent, to the removal of traditional cross-functional barriers. These silos comprise the organizational boundaries where information flow and often cooperation, stop. You must ask, "How will we use the ERP system?" Some not-so-obvious issues will surface as you try to answer that question.

For example, will you combine demand-based flow and lean manufacturing techniques, which will negate the need for some traditional ERP functionality? Focus on your business strategy and not just software selection and implementation. Many problems are reinforced by contradictory objectives and performance measures that actually create inconsistent value and belief systems, to the company's detriment. No amount of information technology will correct these problems. Management must aggressively remove them once and for all through business process redesign.