The benefits of implementing an ERP system go beyond simply automating a particular function of your company such as sales or marketing. Rather, if deployed properly, ERP technology can align a company's strategic vision with cross-functional business processes such as accounting, human capital and operations. And while the rewards can be rich, getting an ERP system running at a reasonable speed and cost is a difficult endeavor.
One way to vastly improve your odds of achieving a successful deployment is through proper planning.
Assess your business processes. Because an ERP system embodies a number of business functions, it's crucial that a company first "take inventory of the business processes that an ERP system will support," according to Forrester Research analyst Paul Hamerman. For example, a company needs to ask itself questions such as, "How do I wish to run payroll?" and "What aspects of our human capital management practices require improvement?" Answers to these questions will determine not only what ERP system is most befitting your company, but how that solution should be configured to meet your company's business requirements. Says Eric Kimberling, president of Panorama Consulting Group in Denver, "It may sound like common sense, but a lot of companies gloss over this important step or don't define their business requirements in enough detail."
Garner executive buy-in. Don't be fooled: It's simply not enough to get a CIO or IT director on board. Rather, successful ERP deployments have the backing and support of top-level management. "Such support is critical," says Hamerman. "You can't put in an ERP system without executive sponsorship, especially because a lot of these projects are very large expenditures so you need executive buy-in to commit the necessary resources and resolve some of the business policy issues that are going to come up throughout the implementation."
Customize with caution. All too often companies are tempted to tweak an ERP system with countless reconfigurations. It's true that changes to a system's code can produce a better technological match, but such tampering comes with risks. "There is often a degree of customization but it has to be done properly," says Hamerman. "You're going to have to upgrade these systems every three to five years to take advantage of the latest capabilities and compliance updates. But if you apply a lot of customization to the system, it becomes more difficult to manage and upgrade."
Keep it real. With countless ERP vendors competing for your dollars, it's not uncommon for companies to be inundated with flowery sales pitches promising fast, easy and cheap ERP success. But buyer beware. "Go into the whole vendor selection and implementation process with eyes wide open," advises Kimberling. "Have realistic expectations about what it's really going to take to implement a system effectively. A lot of companies get caught in the sales trap with software vendors."
Plan for change. Implementation is only half the battle facing companies interested in ERP. Once a solution is up and running, businesses must then contend with fickle end-users. That's because ERP can spell big changes for people — many of whom will resent having to relearn businesses processes and practices. For this reason, says Kimberling, companies should take pains to introduce "workflow-based training that's specific to your business model and your operations." Employees need to know how their job description is going to change and how they can make the most of an ERP system from the get-go.
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