The Future of ERP: An Enterprise First Approach

Posted by Gerry Poe


enterprise systems expertERP is embracing a new world of consumerized technology focused on the employees as enterprise' resource experts. Explore how an enterprise-first ERP can make use of social, mobile and cloud technologies to give workers the freedom and flexibility they desire to drive company productivity.

In a smaller view, what does Enterprise Software Systems, ERP, offer your department or you and your job? ERP, designed and implemented properly, is defined as simplifying productivity by integrating tasks which otherwise are disparate business events. ERP’s mission is to deliver the best decision support, in a timely manner, with meaningful and relevant content in the most usable form possible.

A case in point is a local business growing 20% year over year. Yet profits are waning to pre-growth levels; volume is up, profits are down. Enterprise information (big data) and decision support do not necessarily go hand in hand. Most of what an ERP system can do for a company requires extensive knowledge, open mindedness and new competencies for sustained success. Looking at successful ERP implementations over the past decade, in a variety of industries, findings are clearly indicating three key factors enabled their success.

  1. Readiness: Implementation and team leadership
  2. Knowledge: Training in your ERP and corporate disciplines
  3. Reliability: Current technologies integration

According to Aberdeen, top enterprises showed improvement in the following four key performance indicators (KPIs) over the past year with current results averaging:

  • 97% complete and on-time shipments.
  • 98% inventory accuracy.
  • 51% have a days sales outstanding (DSO) rate of fewer than 30 days, and 80% have a DSO rate of fewer than 40 days.
  • 37% are able to invoice within one day of completed work, and 80% are able to invoice within three days.

To achieve such performance, enterprises must:

  • Take an integrated approach to ERP implementation.
  • Standardize enterprise-wide procedures for order and credit management, planning and production (or fulfillment) and cash management.
  • Replace manual hand-offs between individuals and departments with automated workflows.

Some reasons for enterprise ERP lag

  • 80% of manufacturers have some form of enterprise software like ERP,
  • Core ERP systems consisting of 10 or more modules, only 45% are used by most organizations, leaving almost 60% unused.
  • Manufacturers have 1.9 separate and distinct ERP systems.

Getting things in order is your pre-ERP workup for the enterprise.

  • What do we have?
  • What do we need?
  • How can we build or buy it?
  • Why do these things matter?
  • What do they costs in time, money and people?
  • What will ERP mean to the organization’s future?

First things first

Bringing your opinions clearly to the discussion table in an open frank forum of cost versus business value. When an engineer at Litton, I was tasked with developing my department “wish list” budget for new equipment required on upcoming projects. On this list was an oscilloscope costing nearly $20,000. I felt like I was stealing the company’s money by requesting such an expensive piece of equipment be purchased. My manager said; “I don’t want you thinking this is your personal budget, this is a business and we must have what it will take to be successful.” That day, I learned to separate my personal beliefs about spending versus the company needs. But above all getting to the destination goal effectively and reliably was of utmost importance.

ERP software, like a business-muscle, requires exercising to be strong and add value to the organization. Like a body of processes and functions, these business-muscles are keys to enterprise core strengths, extended capabilities and endurance. If we only exercise the arms and not the legs, we will be lopsided in our knowledge leaving core competencies weakened. Thinking of ERP as a range-of-motion (ROM) machine, we can only get what the weakest muscle is capable of delivering or risk breakdowns. Strength is relative and knowledge becomes subjective across an enterprise where training is reduced to save money in the hope that learning as we go will suffice. Sometimes a business coach or trainer will help focus the enterprise on building their strengths ensuring lasting success.

SYSPRO is an example of ERP software designed to deliver the best enterprise results. A tailorable and configurable system like ERP is at its best when combined with learned, well trained staff with deep training to support the company’s long term objectives embedded into the business plan. ERP potential capabilities may lie dormant and inadequately resourced if underutilized and under-trained.

For example:

Enterprise problem solving utilizing ERP re-discovery can help understand how business needs and process issues can be better managed by bringing your team’s focus on their business challenges. utilizing ERP capabilities; unused capacity: Let’s take a quick look at engineering change control as a case study.

Your company has a CAD design software system and all product changes are updated in the CAD system. The CAD system is an independent platform and currently does not integrate with your ERP software. Your ERP software has add-on systems you can add at two levels.

  1. First the engineering change control (ECC) built into your ERP software as a module.
  2. Next there is an available live-link from third-party software integrating your version of CAD directly into your ERP bill of materials (BOM) and inventory control connecting your CAD, ERP ECC and manufacturing requirements into a single layer system.

Integrated systems enable your company to be current for material, work in process, operations, customer requirements and consistent with all phases of product lifecycle management (PLM) without the costly risks of disparate data, systems and processes.

Summary:

Simplifying your enterprise is part art and science. Going to the end game, if your systems are not interoperable, there are risks with missing links or components, operations or mismatched customer orders. If the components in the Bill of Material do not match the engineering version ordered, your buyers are making purchasing errors and inventory cannot be used. If your enterprise systems are out of sync, your results are unpredictable as are company profits.

If you would like to schedule a business consultation with an enterprise systems expert, click below:

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Tags: ERP Assessment, Enterprise Software, Enterprise Systems, Enterprise Sustainability

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