ERP Systems – The Art of the Possible
Modern integrated ERP systems are developing rapidly and include functionality that would, only a few years ago, have seemed like science fiction. Times like these, a business can flourish.
There’s a countless amount of opportunities that implementing a new ERP system would bring. In terms of creating the necessary space to challenge current processes, including ways of approaching critical aspects of a business. It reflects how functionality contained within modern ERP systems fundamentally challenges BAU. It’s not designed to be at a level of detail necessary to provide a full ROI statement, but more to indicate what might be possible in the “brave new world.”
Companies and their staff are becoming more decentralised. New ERP software provides mobile functionality so users can stay connected and well-informed on their business processes and performance at all times.
You can access ERP systems on laptops, mobile phones, tablets and even wearable devices anywhere with an internet connection. Also, alerts indicating a need for action, highlighting a new order etc. can be delivered directly as an SMS message.
The whole idea of an ERP system is to gather the entire company into a unified environment. ERP gives all departments or business units a shared vision and chance to coordinate in real-time. Nobody wants to run a siloed business with each department or business unit functioning separate from the other. Collaboration is a crucial and often necessary part of a company. Data entered into ERP systems is centralised and consistent, so there is no reason why departments cannot work together. ERP software also touches on almost every aspect of a business, thus naturally encouraging collaborative, interdepartmental efforts.
However, departments work best when they are autonomous. But autonomy can create the problem of blind spots. Without insight into other departments or business units, an organisation can waste resources duplicating efforts to solve the same problem. A central portal helps departments share information, customised data, and generate individual reports. It promotes cooperation and sharing of knowledge and resources.
With ERP enabling collaboration across the business, you can delegate decision-making. The company can operate as a whole, with standardised processes, while maintaining the uniqueness of each unit and ultimately moving to a process-centric organisation rather than a location-centric one.
As well as internal, modern ERP systems support external collaboration with customers and suppliers, opening up the data in the system to them. Data that is accurate and up-to-date, enabling both self-serve and collaborative supply chain decisions. In this way, the business can become a value-adding supplier to its customers, supporting closed-loop tracking of product, for example.
Easy access to accurate, timely and relevant information will enable the business to take quick, transparent and informed business decisions. Many surveys have revealed that ERP systems help companies plan better and be reactive to change in demands, competition and unexpected disruptions. The availability of information, as well as the user-friendliness of the system, allows businesses to be more responsive. Keep up with fast-moving markets, enabling companies to develop products based on consumer understanding.
ERP software will also give the tools needed to create more accurate forecasts – bringing S&OP into the heart of the business. Since the information within the ERP is as precise as possible, you can make realistic estimates and more effective projections. In this new world, business intelligence metrics will drive ERP changes directly, turning ERP from a “system of record” into a “system of intelligence.” The ERP system will be able to generate direct recommendations — based on real-time, accurate data — for factory floor and supply chain managers.
An ERP solution eliminates repetitive processes and dramatically reduces the need to manually enter information. The system will also streamline business processes and make it easier and more efficient for companies to collect data, no matter the department.
One of the benefits of ERP systems is that you can see how products and services are moving through the pipeline. Raw material management, order tracking, inventory tracking, and revenue tracking are made easier with the help of these efficient ERP tools.
In today’s world, it is impossible to think about how an enterprise could implement a fast delivery process without the help of an ERP solution. An ERP system improves both front-end and back-end relationships by creating an efficient shipping and delivery system. It streamlines shipping times, creating a much better experience for customers.
Imagine being able to gain valuable new insights into each step in the supply chain, production, fulfilment, installation and service processes, finding out how each contributes or detracts from total product quality and delivering excellent customer experience.
The core goal of an ERP system is to provide actionable data and information to company leaders. But collecting accurate data is an ongoing and vexing challenge. The Internet of Things (IoT) has the potential to expand data availability and improve accuracy massively. This potential has significant implications for customer service, forecasting, inventory management and business intelligence.
The business intelligence metrics that typically accompany ERP systems out of the box present data from the past, such as a summary of past transactions. With the Industrial Internet of Things, we can expect to see metrics that show the present reality and enable accurate, actionable business intelligence.
This visibility into the activities on the production line that is made available with IoT can transform areas such as quality and traceability. What is supposed to happen can get replaced with what is happening within the business, making ERP more useful? In this way, a company can monitor quality and machine availability across the entire business real-time.
Other positive impacts
While the above points have been focused more on technology-enabled benefits, ERP can deliver different positive results. Implementing a modern ERP system, where processes are defined in alignment with best practice, will provide business transformation in its own right. In this way, the business engages in the process, recognising that this is not, in any way, an IT project.
Any proposed deviations from standard functionality can be challenged, to move away from levels of complexity that add no value. Designing future state processes based on what the selected system offers, rather than enduring the lengthy debate over which site has the best procedures, should facilitate easier adoption across the entire business hierarchy. In this way, you can mitigate some of the risks of change management.
The Next Step
All of the above points will deliver significant benefit. But, this can only happen if you follow an appropriate implementation process. Every step of the implementation needs to be carefully managed to ensure the outcome aligns with the project objectives. Project activities, programme control and change management should work side by side as they link intrinsically in delivering real value. The effort cannot be understated or the benefits to achieve over-stated.
The investment in the system and technology will be a waste without comparable investment in the implementation process.
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