Aligning an Enterprise Resource Planning (ERP) implementation with a company’s overall business strategy is a challenging and often overlooked component of a successful project. The main thing needed is to take a top-down approach to define business processes and ultimately arrive at an ERP solution that fits the overall business.
One reason is the lack of resources needed to effectively map out existing business processes and optimize them to work in a new ERP environment. On the other hand, implementing a new ERP is an opportunity to relook at old processes and update them, installing modern concepts.
Secondly, It is unlikely that one single system will address all of your business needs, so your software selection team needs to look for a new ERP system that best improves your technology stack. Finally, while ERP software is a critical back-office function, plenty of systems enable better use of back-office systems.
How can you “see around corners” and prepare your existing ERP system to support future business processes and overall digital strategy?
Here are some things to consider:
Think Beyond Technology: Focus on Business Requirements
Focus on your business requirements rather than the “tech side” of things. Then, consider how they could evolve in the future. Most companies already have a window into their general strategies for the next five or maybe ten years, so you should list them out, prioritize them and map them back to the underlying systems.
In theory, this process is simple. However, it is the most critical step in the entire project. The bottom line is that if your existing systems don’t support your current and projected business requirements, things will fail.
Below are a few things to ask during your business requirements assessment:
- Are your current business requirements sufficiently supported?
- Can your existing expertise support future technology?
- Do you anticipate any issues concerning future support?
- Do you know if there are gaps between your business processes and software systems and if a “best-of-breed” hybrid ERP solution will resolve them?
The answers to these questions will help you with your first critical decision: can you keep your current ERP software at the heart of what you do and apply a hybrid ERP approach to build additional functionality in the cloud on top of the legacy system?
Then, establish the performance measures at the corporate, operational, and business process levels. These measures should help you identify how successful you have been in executing your defined strategy.
Below are a few things to ask when deciding on a new ERP system:
- Increase On-Time Delivery
- Improve Overall Equipment Effectiveness
- Realize Improved Raw Material Yield.
- Standardize Exception Handling Processes Across Manufacturing Operations.
- Enable Continuous Improvement Teams with Analytics and Real-Time Visibility.
This process involved much more than asking users what they wanted from a new system. Instead, this process links the enterprise selection project to the overall business strategy. By connecting business strategy and ERP, the team has a better chance of selecting the right system that supports the company’s overall priorities.
Processes can change before your ERP system
Before you start implementing your new ERP System, performing the business process maps and truly understanding what is happening today is very important. As discussed in our other blogs, the timing of implementing a new ERP system can vary and take months, even years. Once you have identified your current processes and issues, now is the time to look at enhancing them in “real-life”. For example, if a warehouse clerk takes an item from the shelf and doesn’t record the transaction, implementing a new ERP system will not resolve this (unless you implement a full warehouse management solution with RFID) and now you’ve spent a lot of time and money for nothing.
Understanding your processes and key pain points is key and address those first before or while you start implementing your new ERP system.
To summarize, you must consider your entire operational and technological landscape before moving forward with an evaluation and selection of software. Start by evaluating your current processes and systems, identifying potential cost benefits and phasing your various selection and implementation initiatives within that overarching, longer-term plan.