The first of 5 parts
You have decided that an ERP system is what you need to transform your business into the vibrant successful organization we all dream about, now what? Erp systems are a robust complicated beasts and buying one without a plan would be like giving your 16 year old the keys to a Porsche without teaching him to drive or at the very least teaching him to drive something else first. He is headed for a deadly accident and if you purchase an ERP system without first doing the basics you are too!
You need to prepare yourself for the task and plan for the results you seek; in short you need a plan. First, know what ERP systems are and how the benefit you. Second, know what you want, know what you need and know the difference between the two. Third, know the vendor and their capabilities but also know yourself and your people and be honest about their capabilities. Finally know the cost, the true cost and set a budget accordingly.
What are ERP Systems
Enterprise Resource Planning (ERP) software is a series of modular software applications where each application represents a particular business process within your organization. These applications communicate with each other and pass information between them. They share a common database where information is stored so it can be retrieved as needed. For example, in a typical manufacturing company an ERP system would contain modules where you can:
– Store basic information such as product structures, drawings, manufacturing instructions, and quality requirements
– Quote, price, and enter customer orders
– Plan and forecast customer demand and schedule product availability
– Manage your supply chain
– Cost products, break it down forensically, and measure performance
– Manage receivables and supplier payments
– Manage inventory locations and turns
– View and print a variety of reports that improve your decision making capabilities
– Quality analysis
If your company is distribution or service based then your needs will vary somewhat from this list. A good ERP system can adapt to most core business types. Special needs from particular business types have resulted in “industry-specific” modules that assist with special processes. But make no mistake, what you really need to invest in should be determined by where your problems lie.
The Real Benefits of ERP
The true benefits you will reap from investing in ERP lie in the ability of the software to provide business intelligence data that will improve process efficiency and reduce the overall cost of doing business.
– Automation of manual or clerical business process
– Improved product or service quality
– Improved customer relationships
– Forensic cost analysis capability
– Direct business to business communication
– Improved communication across all functional departments
Next: week what you need vs what you want.