Do innovative companies manage their ERP implementations differently than more average organizations?
In many cases the answer is yes. Three ways in which innovative ERP implementations differ from the norm:
1. They aren’t overly concerned with hard and fast budgets and timeframes. This may sound surprising to CFOs, but this is an important differentiator for innovative versus average implementations. While the average company is constrained budget and project plan , more innovative companies recognize that there’s a lot that they don’t know when they first establish their project plans and budgets- budgets area guideline not a set of handcuffs that stop management making good decisions. In addition, innovative companies realise that innovation means change of needs and that flexibility is important to achieving significant improvements to their business models.
Advanced ERP software functionality such as advanced mobility and analytics typically does not get implemented until later in the implementation cycle and then conveniently gets forgotten. Innovative organizations realise that once they have incurred the cost of server, installs training etc, they can leverage the system to maximum advantage and ensure that they find the resources to implement these important business processes.
2. They are more likely to explore creative and alternative implementation strategies perhaps with most a phased strategy rather than a big-bang approach. Some will deploy an iterative, implementation approach perhaps retyping different scenarios and configurations rather than more typical waterfall methodologies. These agile approaches can enable quicker realized functionality, or a more appropriate configuration when compared to more standardized approaches.
3. Innovative companies focus on post-implementation benefits realization. Some companies implement ERP systems for compliance, or technology sake, or are forced to because their legacy systems have become outdated. Innovative organizations have more business-focused justifications that drive their overall ERP implementations. This philosophy helps focus the project team throughout the implementation, such as how they handle business process management and organizational change management.
This business focus shows how their ERP systems are managed after implementation. Forward-thinking organizations define specific performance measures and target levels of performance that they expect to see from their ERP implementations. This disciplined approach is more likely to translate to tangible and measurable business benefits in the long-term.
Innovative companies may not find their ERP implementations to be easy wins, but they are often more effective and successful in their initiatives.
ERP solutions can revolutionize the way companies produce goods and services. They can integrate and automate process across d different parts of a company and thereby ensure smooth flow of information across the enterprise quickly. Innovative companies realise this and are less likely to build functional silos – driven by segementation of duties and security concerns outweighing the need for efficiency and effectiveness base don informed in context decision making.
ERP solutions have been popular in Europe for a long, North American companies for only the last decade and other regions perhaps for the last 5 years.
Some of the factors that contributed to ERP growth are the trend towards globalization, perceived Year 2000 problems, mergers and acquisitions, more stringent regulations, new technologies and better offerings to increase performance and drive down the cost of ownership and familiar user interfaces encouraging user adoption.
ERP systems i.e enterprise systems – are by their nature often very large and complex and warrant a careful planning and execution of their implementation. They are not mere software systems; they affect how a business conducts itself.
How a company implements an ERP system determines whether it creates a competitive advantage or becomes a corporate headache. The top contributor for a successful ERP implementation is strong commitment from upper management, becuse an implementation involves significant alterations to existing business practices as well as an outlay of huge capital investments.
other important factors are the issues related to reengineering the business processes and integrating the other business applications to the ERP backbone. Upper management plays a key role in managing the change an ERP brings into an organization.
Organizational commitment is paramount due to possible lengthy implementation and THEcosts involved.
Once implemented, an ERP system is difficult and expensive to undo.
Since no single ERP solution can satisfy all the business needs, organizations may have to implement custom applications in addition to the ERP software. Integrating different software packages poses a challenge, and the integration patchwork adds risk and expensive and may be difficult to maintain.
Selecting and managing consultants pose a continuous challenge. There is a shortage of skilled consultants in the market. ERP vendors bring out industry-specific solutions and newer methodologies to cut the length and costs of implementation. Organizations try to reduce the total cost of implementation and to reduce customization by adapting to the ERP’s built in best practices as much as possible. Innovative companies are more worried about the cost savings after implementation and whether value is added. They will customise where it gives a competitive edge e.g. vertical solutions and use standard industry processes e.g. matching an invoice where those are proven.
Selecting the right employees to participate in the implementation process and motivating them is critical for the implementation’s success in innovative companies they are already used to embracing new ideas and change, and improving processes. Such companies also understand how important it to train the employees to use the system to best effect.
The people at the keyboard make important decisions about buying and selling — important commitments of the company. They need to understand how their data affects the rest of company. Some of the decisions front-line people now make with an ERP system were formerly the responsibility of a manager.
Managers in Innovative companies understand and welcome this change in their job and encourage the front-line people to be able to make those decisions themselves so they can manage upwards and outwards rather than downwards and inwards. ERP systems demand rigorous training, and intensive practise. It is difficult for trainers or consultants to pass on the knowledge to the employees in a short period of time. This “knowledge transfer” gets hard if the employees lack computer literacy or have computer phobia. In addition to being taught ERP technology, the employees also have to be taught their new responsibilities. In an innovative company users of the ERP systems are continuously trained to leverage new technology and features to meet the changing needs both of the business and employees.