Tag Archive: ERP planning

Why Executives Should Care About ERP Strategy

September 6th, 2017

Lately, we’ve been called in by several clients with ERP challenges that directly impact business growth and success. Do you desire profitable growth? If so, add ERP into your strategic discussions. Would you delegate a decision that could literally make or break your customer service, profit margins (or lack thereof) and ability to grow? I think not!

ERP Strategy Meeting

Incorporate ERP strategy discussions into executive meetings. It matters.

ERP Strategy Matters

There has been a widespread need to consider ERP as a strategic topic. For example, these scenarios have arisen in just the last month:

  1. In one manufacturing company, the ERP system was holding them back from growing. For a family-owned business, that is the equivalent of a noose around the neck.
  2. In another manufacturing and distribution business, they couldn’t figure out their costs – this issue certainly provides challenges for profitable growth.
  3. And in yet another situation, the ERP system wouldn’t support the business processes adequately and therefore would hold the owners back from getting away from the business (even for an extended vacation), let alone increasing the value of the business.
  4. A complex enterprise also struggled to further utilize their system for management decision-making due to data integrity obstacles and the lack of flexible reporting.

As I enjoy stating the obvious (one of my favorite clients used to say about me), none of these situations are desirable! Instead of ending up butting your head against the wall, start thinking about ERP as a strategic topic and include it in your executive meetings.

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The System Design Will Make or Break ERP

November 17th, 2015
ERP Design

Take extra care to design your ERP system to make certain it works with every functional area of your business and to involve key people in the developmental decisions to ensure success.

As several of my clients are building their systems infrastructure to better support their aggressive growth, it just so happens I’ve spent quite a bit of time thinking about design lately. Design will make or break your ERP success. Today’s systems have come a long way — they have a more simplified “front” with extreme complexity and flexibility built in behind the scenes. Thus, it is important to start with the optimal design in order to avoid serious complications down-the-line.

System design is similar in concept to the foundation of the house. If it isn’t solid, no matter how pretty the accessories, you’ll still have an issue. Worse yet, it is much more expensive to fix the foundation later. For example, one of my clients didn’t put enough thought into the system design upfront, and so they called me to see how they could best move forward. Once they figured out that there were changes they’d like to make, the problem was that it was going to be quite costly to make the changes — double the price. And, it was a challenge to figure out how to make the changes without negatively impacting other areas of the operation. Of course we determine a plan forward; however, it would have been much better if they were able to design these in upfront. It isn’t that anyone sets out to skimp on design; however, it requires thinking several steps ahead, knowing what you might need several years down-the-line, having a cross-functional team involved and spending some money upfront to ensure complete information and review of options — each of these elements at a minimum should be incorporated. It is also the best time to design in best practice processes.

A current best practice that achieves results while keeping speed and flexibility in mind is to review how the ERP system works for each functional area while discussing requirements. That way, it is a hands-on view to options and possibilities and stirs thoughts. It is also good to involve a cross-functional team as you’ll want to consider needs and impacts across the organization. I cannot think of a system transaction that affects only one department or functional area. Make sure to involve all key people in design decisions and supplement your process expertise if possible to ensure success.

Did you like this article? Continue reading on how to become a Systems Pragmatist:

The Critical Importance of Design

Watching Metrics Trends

 



ERP Implementation: Keys to Success

October 17th, 2013
 ERP implementation

Achieve expected returns from your ERP implementation by following three keys to success.

I’ve found that noticing and acting on trends can be a key to success from both a professional and personal perspective.

Lately there have been plenty of trends to notice; however, a noteworthy one is that I’ve received several requests and/or inquiries about ERP implementation, post go-live support, and how to leverage ERP systems to drive business results. One of my recent speeches, “Leveraging ERP for Bottom Line Results” has become a popular topic, and as companies are beginning to think about investing in ERP again, it is all the more important to ensure success with your ERP projects in order to achieve the expected returns.

In my experience in working with multiple companies in a variety of industries and globally on implementing and leveraging the use of ERP systems to drive business results, I’ve seen the good, bad and ugly and have derived a set of best practices for achieving success.

A few of the keys to success include the following: 1) Build core metrics into the process upfront. 2) Focus on exception processes. 3) Look for ways to simplify

1.   Build Core Metrics into the Process Upfront – Building core metrics into the process upfront is undoubtedly the #1 key to success. For example, in one Oracle implementation, the company went over and beyond to ensure success by hiring not only Oracle consulting experts but also process experts to ensure a seamless transition; however, there was a significant gap with the day-to-day business. As is typical in implementations, often your best internal experts become involved with the implementation (and not focused on prior responsibilities), transition to new functions in the business or are dealing with entirely new business processes tied to the new system; thus no one is minding the store.

In my example, although there were people tasked with metrics and it appeared that the teams were well-organized, no one realized they were shipping significantly less immediately following the go-live. Soon, it built on itself, and they were suddenly behind and scrambling in shipping, production, planning and purchasing as well. Customers suffered! And costs increased. Instead, I’ve found that if you determine your core metrics upfront (or as soon as you realize your gap) and develop a simple tracking process; you’ll avoid unnecessary chaos and upheaval to your business.

 2.  Focus on Exception Processes – I’ve found that although there is typically a concentrated focus on testing all of the core areas of the business, implementations fall short with exception processes. I’ve yet to see an implementation that wasn’t struggling to maintain deadlines; thus, you are often fortunate to get through the testing and pilot process with your main functions let alone exceptions. Unfortunately, how many typical days are without exceptions (no mistakes, no entry errors, no changes in customer orders, and no delays in purchase orders)? Not many!

As exceptions begin to occur, the processes fall apart. It builds upon itself as well-intentioned employees find workarounds to resolve the exception which creates down-the-line issues. Instead, it is vital to ensure exceptions are incorporated into the training process. If that ship has already sailed, make sure to focus a team of people on bringing the organization up-to-speed on how to handle exceptions.

 3.  Look for Ways to Simplify – Last but not least, look for ways to simplify – your processes, systems and implementation. It is easy to get side-tracked in complexity when implementing a new system, as you want the system to do everything you previously couldn’t do as well as you wanted in order to achieve your business goals.

However, I’ve found it is at least 10 times better to simplify:

1) Boil down your desires to your core business drivers – what are your profit drivers? What aligns with your strategy?

2) Align your systems with your core business drivers through your critical success factors – typically, there are a handful of functionality areas to focus on in order to ensure the system will support your business and guarantee a smooth transition with key customers.

3) Ensure that the team focuses on these areas, even if it’s at the detriment to the rest of the areas. I’ve found this is easier said than done; however, the rewards are substantial. Implementing and leveraging systems can help drive business results; however, they often cost FAR more than intended with poor results due to implementation chaos.

Take a look at implementing a few best practices and turn a potential mess into results!

Why not start on the right foot by syncing lean with the business strategy, integrating it into the culture and putting in the effort to implement solid operating principles? Not only will you deliver bottom line results but you’ll also develop a culture of continuous improvement?