Enterprise Resource Planning software should be viewed as a business ecosystem; it is the place where your data, intelligence, processes, and business realities reside. If the ecosystem is healthy and regularly tended, your harvest will be profitable. If not, your organization will likely wilt and die, choked by incorrect data, faulty intel and too little-too late response times.
"One major challenge organizations face with the enterprise systems (ERP, CRM, HRIS, Collaboration tools, etc.) is that they do not adequately plan for how they will manage the evolution of the technology after the initial go-live," says Jason Whitehead, president of Tri Tuns.
"Many times organizations focus on ensuring 'on-time & on-budget' deployments, only to suffer low user adoption, limited benefits realization, and poor return on investment (ROI)," he added.
It is vital to understand that ERP optimization is an ongoing process for which there is no end goal.
Instead, it is a collection of ongoing and successive goals that are designed to optimize business advantage by leveraging the parameters that exist in a specific time period. In other words, ERP software is fully optimized when it delivers a clear and immediate competitive advantage by leveraging opportunities and minimizing obstacles as they exist in that moment. However, moments flow one to another, change thus being constant. Therefore, optimizing ERP software is also a constant exercise in change.
Obviously, a company (of any size) that lumbers along on paper-based or manual systems and antiquated processes cannot react and respond sufficiently to compete in real-time, here in the Land of Now. This is the bottom-line reason for implementing ERP systems in the first place. It is also the bottom-line reason for continuous optimization.
Using an ERP application is essential for knowing where you stand relative to the market — and how you can act or react to market challenges and opportunities — at any given time. In fact, ERP systems are essential for business agility.
Where Problems Bloom and Reasons Stray
The most common and troublesome problems with ERP systems arise not from one area of the ecosystem, but from the intersections of multiple areas. Essentially, they appear in neglected parts of the ecosystem and as weeds in the Garden of Unintended Consequences.
Oddly, problems tend to develop near simultaneously but in vacuum pockets. Therefore, coordinating the various players involved in ERP use should be a top and continuous priority as both a preventative and restorative measure. Good communication and collaboration is also essential to carry the initiative forward in the most efficient means possible.
"Everyone involved in an ERP project, whether a system integrator, vendor or internal staff, needs to share the same clear view of the outcome so they can plan, execute and control the inevitable swings in the project," explains Alan Rudolph, managing director of ACS. He is also responsible for the company’s Applications Solutions Group. "Possessing a vision and the charter that comes from articulating this vision to management greatly reduces the likelihood of scope creep, project delays, future scalability issues, or unsatisfied end users."
Perhaps a note should be pinned to the wall of every meeting room that simply reads: "As the ERP ecosystem goes, so goeth the business. It behooves you, then, to help tend, direct and protect the project."
Such a reminder may be necessary to underscore the importance of company-wide participation since ERP optimization is not, repeat not, an IT-driven exercise.
However, the technology does require attention and it is irresponsible to pretend that technological issues do not exist. Cloud or on-premise, open-source or proprietary, ERP software is a technological platform that must integrate a tsunami of legacy systems, add-ons, data sources and software programs -- not only at implementation but continuously over the life of the system.
Unfortunately, there are precious few outer signs indicating the nature of technical challenges one might find in any given ERP product. Indeed, even vendor size and brand familiarity are no guarantee that the technology will be easier to use or optimize.
"Many ERP systems on the market today are not designed with continuous improvement at their core and are still hindered by older technology - even though they may be market leaders now," says David Mitchell, president of NovaPoint Group, an OpenERP Partner.
Many systems are not architected for incremental improvement, warns Mitchell. Without the support of flexible technology, the organization's ability to execute a continuous improvement program is limited. "If you can lower the cost to design, and deploy changes related to technology or processes, then greater organizational efficiency will result because a larger number of incremental changes become cost effective to implement," he says.
While many IT leaders and technologists are familiar with this conundrum, few are aware that a vendor can be a very advantageous and strategic partner in the optimization effort.
"Resist the habit of implementing a solution the way you have always done, or because your staff has the most experience in that process," advises Rudolph. "Look to best practice recommendations from your ERP vendor, and implement the best combination of their suggestions and your own experience to meet your targets for cost, function and support."
Also do not instantly take an optimization path for expediency’s sake. "You may be able to cobble together a business system using expertise within your staff, but you must think of the long-term," advises Rudolph.
"The last hurdle you want to encounter is a vendor delay to a service request because your configuration is not supported or that they can not duplicate the issue," says Rudolph. "Remember that for an ERP implementation to be deemed successful not only are you expected to deliver a solution that is up and running, but you will also be judged on your ability to advance that solution as the company evolves."
More ERP Software Optimization Best Practices >>