Studies are revealing that the majority of ERP implementations are failing to achieve the anticipated return on investment. According to Carol Ptak, past President of APICS, approximately 60 to 90 percent of companies implementing ERP systems fail to meet their ROI objectives.
The implementation of an Enterprise Resource Planning system is a major corporate project that must have clearly defined objectives and must have a predetermined reasonable rate of return on the investment. One way the rate of return can be measured is by improvement in net income.
One primary reason for such a high failure rate is not due to a lack of good ERP software, but rather to a lack of education regarding this rapidly evolving technology. Most companies still do not fully appreciate the potential or the complexity of ERP systems.
Prior to computerized resource planning tools, manufacturing companies grew and prospered without the help of this technology. However, the competitive advantage offered by a properly implemented ERP system is so significant that companies who do not take advantage of this technology may have difficulty competing in the future.
Companies that are just getting started with ERP tend to believe that ERP software will automatically provide an ERP system. But the reality is that ERP software is just the toolset used to automate the processes that are part of a company’s ERP system.
An ERP system can best be defined as ‘the chain of integrated processes that form the business operations of a company, and when properly planned and executed, will maximize the company’s productivity and profitability.’
Managers within companies need to understand supply chain principles well enough to define which ERP processes are useful relative to their specific marketing and operational environments. Only then can an effective ERP Blueprint be developed.
It is extremely important to remember your ERP software is not the ERP solution. It is only an important set of tools used to automate some of the ERP processes defined in an ERP Blueprint.
ERP software is based on the APICS guidelines for defining and operating enterprise systems, and is not specific to any specific ERP software package.
Most ERP software packages adhere to these APICS Guidelines, although some may have a stronger orientation to a specific industry.
To provide senior management with a basic understanding of ERP so they can define realistic ERP objectives, accurately estimate the resources required for their ERP project, and determine how the return on investment will be measured.
To educate middle management in the fundamentals of ERP so they can participate in developing a detailed ERP Blueprint.
To provide operators with training on specific ERP work processes so they can properly perform their functions within the system.
APICS provides workshops and can be used as the launching pad for a new ERP project, or they can be used to provide supplemental education to companies that are currently in the process of implementing an ERP system.
Business mission is to help companies increase productivity and profitability through ERP education and implementation.
The methodology used to achieve successful ERP results is built on our direct experience planning, installing, implementing and supporting enterprise systems since 1987.
If your company is interested in improving profitability by implementing a fully integrated ERP system, and you want to avoid the costly pitfalls, then we can probably help. Simply contact us for an introductory meeting.
ERP Implementation Mission Statement
- Committed to providing excellent ERP education and implementation services.
- Place the client’s interests above our own
- Only perform the work that is necessary
- Only provide services where we are knowledgeable
ERP Related Terminology
- ERP Enterprise Resource Planning
- MRP Material Requirements Planning
- MRPII Manufacturing Resource Planning (Closed Loop MRP: MRPII with Financials)
- APICS Operations Management Education
- ERP System is a set of processes which defines optimum methods for operating a specific business to achieve maximum productivity and profitability.
- ERP Blueprint is the written outline for your ERP system detailing the integrated flow of processes, and assigns the individual ownership for each process.
- ERP Software package is the tool-set needed to automate some of the ERP processes. Computer automation is the technology which provides the automation allowing execution of ERP processes to be cost efficient and speedy enough to be useful.
- ERP Advisor is the person with the experience and expertise needed to guide the efficient implementation of an ERP system.
The secret to outstanding ERP implementation is understanding why and how APICS is the foundation of ERP.