Enterprise Resource Planning (ERP) systems are intended to provide an integrated software system as a “backbone” to support key business processes and help them perform better. They can include order-entry, accounting, inventory management, forecasting, transportation management and manufacturing-planning. For this reason ERP is often called the “operating system” of the company. Popular larger vendors include SAP and Oracle. At the next level down in size Epicor, Microsoft Great Plains and Oracle Net-Suite dominate. Finally, for smaller companies there are a large variety of vendors, usually that are designed to support very specific industries.
Important ERP selection criteria include the nature of your business. ERP systems are often designed around one of four basic businesses: Manufacturing, Distribution, Service with Inventory, or Service-Only. If your business is manufacturing and distribution, or distribution and service-with-inventory you will often have a choice of which functionality is more important for your success.
Important ERP selection criteria include the nature of your business.
Another consideration when beginning your ERP selection is the customization of the system. Many companies have custom processes that have developed over the years. However, ERP systems are not flexible and it is advisable to adjust your processes to the ERP versus customizing the ERP to your processes. If you choose to customize you will have “patches” that inhibit future upgrades.
One caution when choosing and implementing an ERP system is that they are seen as the “fix” for poor processes. However, implementing an ERP without correcting poor processes usually results in poor use of the ERP features and limited ERP implementation success. At Supply Velocity, we recommend you answer the following questions prior to ERP implementation:
- Are your processes standardized and are they documented?
- Do you have efficient and effective processes in place prior to ERP implementation?
- Do you have unnecessary process steps that should be eliminated prior to ERP implementation?
- Are you hoping a new ERP system will solve poor existing processes?
- Is it possible that the ERP implementation could make poor processes run better or worse?
Depending on how you answered these questions, you may need to think or act, before you implement. Supply Velocity can help by facilitating the identification and streamlining of key processes for ERP selection and implementation. In addition, this effort will document these key improved processes to be used for the ERP selection and implementation. Implementing an ERP system around standardized, streamlined and documented processes will help ensure a more successful implementation that supports the business’ organizational structure, roles, goals and objectives.