I’ve always focused part of my business on ERP selection projects as these leverage the unique combination of my strengths — understanding the cross-functional and cross-organizational view in combination with the strategic priorities to identify the critical success factors. We then align these factors with the optimal business process design and system functionality to ensure success.
I’m in the final stages of developing a new proprietary process for ERP selection, called ACE (assess and align critical success factors to achieve your desired endgame). The key to success lies with critical success factors. Think about the following when thinking about critical success factors:
- Profit drivers – What drives the company’s profit? What is key to success? For example, when I was VP of Operations, I was responsible for cost. Although labor cost was utmost on the Board of Directors’ minds, it wasn’t the most important cost driver. Raw material costs were a much more significant percentage of product cost. Thus, focusing resources on material cost was the smartest way to drive profit.
- Alignment with strategy – Strategy can dictate a critical success factor. For example, if customers are core to success, making sure the system can easily address core customer requirements is cornerstone. How flexible is the system to meet those needs in alignment with your strategy?
- Differentiators – What does your business do differently from the competition? What are your unique differentiators? Make sure your system supports these.
- Unique system functionality – Often-times, there is functionality which is unique to your industry or way of doing business. For example, in metal processing, there can be attributes of metal which have to be considered in understanding items and inventory. Does your system support this without having a separate item for every possible combination of attributes?
Start by identifying your critical success factors. You wouldn’t want to start building a house by picking out curtains when you didn’t have the proper foundations in place. Consider your ERP system in a similar light. Stay tuned for the introduction of my new proprietary ACE process in next month’s newsletter…