Effective ERP Selection: The Key to a Smooth Implementation
Since ERP software impacts every aspect of a manufacturing or distribution company, selecting the best ERP software for your business will impact all departments, as well as the extended enterprise. Unfortunately, many ERP selection teams get pulled into a variety of directions, finding it difficult to apply the needed resources for effective ERP selection. This scenario occurs frequently, especially within mid-market manufacturing and distribution companies who lack a dedicated IT department.
Whether a company has outgrown its legacy system, is burdened with an unstable technical environment or is looking to better handle expansion into new markets or regions, the effectiveness of ERP selection has everything to do with the success of the eventual implementation.
Taking Inventory: The First Step Toward Effective ERP Selection
We’ve found that establishing a cross-functional selection team is important, as is gaining internal consensus and participation from all parties. Another important aspect of effective ERP selection is taking a hard look at the current state of business processes, as well as the desired future end state. This means that teams must take their time and get a full sense of how the new ERP implementation can improve the way a business operates. Before vendor demos and RFQs, organizations must focus on where they want to be, as well as develop a clear sense of where they currently are.
At Ultra Consultants, we believe that ERP selection is a great way to drive real business process improvements and develop a clearer vision of future company goals. In general, we find the following guidelines useful for ERP teams:
- Look at the entire functional organization. Will ERP cut across shop floor, shipping, accounting, the front office, inventory, quality and production? What’s the desired end state in these areas?
- How are operations running now? What’s the vision for each department in future years?
- Identify what the organization does well. How will the new ERP system impact those areas?
- Identify opportunities for improvement. How specifically will the new ERP system support this desired vision?
- Look at existing reports and metrics. How can business decisions be improved to help overall business performance?
Selecting the Right ERP Vendor
We also strongly believe that businesses should focus on ERP vendors who tailor their systems to a vertical industry. In particular, manufacturers and distributors are wise to team up with an ERP vendor that has proven success in the company’s specific industry. For example, if your company is an aerospace supplier, you should seek out ERP vendors that address that specific industry, and learn more about success stories within the aerospace supplier field. Distributors are also wise to seek out ERP systems that are tailor-made to their specific requirements. In general, companies should be sure that any potential ERP vendors address critical industry requirements including regulatory mandates, customer requirements and other key considerations.
For an effective ERP selection process, your vendor should also demonstrate a presence in the industry by providing you with recent references and a product direction statement that explains how the vendor plans to be an industry leader. There is no reason to force-fit an ERP solution into an industry for which it was not designed. Instead, take the time to assess which ERP systems have the features and functions that address your industry’s specific manufacturing challenges.
Many companies find it useful to shortlist the ERP software systems that most easily accommodate distinctive processes. Similarly, you should look for a flexible solution that fits with your existing systems. You may find it useful to talk to other suppliers, customers and ERP professionals that specialize in your specific industry. Get opinions and feedback on ERP software and how it works with businesses of similar size and requirements.
Successful ERP: A Matter of Focus
The most successful ERP evaluations and selections occur when a manufacturer or distributor is fully engaged in the process. In these effective ERP selection processes, the team puts the focus on transforming their business processes and achieving sustained business performance improvements. Effective ERP selections happen when the team takes the time at the outset to determine who within the organization will participate, locates appropriate vendor and external resources and builds a solid plan.
Yet evaluation and selection is only one part of the ERP journey. We encourage the entire ERP selection team to see their project as more than implementing an ERP system. Instead, the project becomes an opportunity to implement business process improvements.
Want more information on ERP software? Head to the ERP Research Center to find ERP software reviews, in-depth articles, information on top vendors and more!
[Image courtesy of Lauren Macdonald]