How To Select The Best ERP Strategy For Your Business

How to select the best ERP strategy for your business
ERP systems offer much needed help when it comes

Contents
Step-by-step guide for finding an ERP vendor Assessing the need for an enterprise resource planning system
to managing the internal and external resources that keep your business running smoothly. Unfortunately, ERP platforms can also be a complex addition, leaving CIOs to decide whether they are ready to put forth the necessary funding and effort. Inside this e-guide, learn how to overcome ERP implementation hurdles in order to leverage benefits such as increased visibility and efficiency. Gain valuable insight through implementation tips around vendor selection, budgeting and more. Step-by-step guide for finding an ERP vendor
Any solution implementation is challenging, and one that affects the entire enterprise is especially daunting -- particularly when large parts of existing systems and methodologies are replaced. In the midmarket -- where budgets are tight -- deliveries must be on target and begin producing meaningful results as soon as possible. Your window of education to enterprise resource planning products is going to be through various vendors, and it's important to choose both your ERP vendor and the product wisely. Let's examine ways to leverage relationships and properly select the appropriate vendor and related ERP system. The ERP vendor: You are at a distinct advantage here. Vendors want and need your business. Work vendors against one another: Don't be shy about letting them know that you're exploring other options -- and be frank about who the other players are. You can do a cursory online examination of a dozen (or more) vendors and allied products, but eventually you'll want to arrive at three or so for in-house product demonstrations. It's also important to keep in mind that an ERP system can mean something different for each organization -- and will be used differently in each. For your own benefit, help the ERP vendor "scale the sale" -- size it appropriately to fit your organization. In doing so, you get a robust, free education on what an
Page 2 of 11
Sponsored by
ERP system can offer. Be as shameless about self-education as time permits, letting vendors teach you not just about their specific solution, but also about ERP in general. This will be especially valuable when it comes to getting buy-in from business stakeholders who may balk at ERP. Budget: Midsized businesses and their allied operations vary greatly, but it's safe to say that meaningful ERP is going to start in the low six-figure range, minimally -- and that investment will likely get you ROI in a few specific areas. Keep in mind that implementation costs, any associated customizations and any real-world setbacks, will cause this figure to go up to the mid-six-figure range and possibly beyond. Assess the payout vs. the ROI. A word of caution: A medium-sized business is often defined as having from 100 to 999 employees, which is quite broad. Therefore, there is no onesize-fits-all discussion for a budget. Remember that it's OK to look: Vendors will engage in good faith (and, therefore, you should have legitimate interest, too). The process will help expose upper and lower ranges of investments and returns for your specific enterprise, budget, business-functional areas, stepped rollouts, etc. Evaluating the ERP vendor and setting expectations Force a competition by which ERP vendors compete for your business: 1. Forward them your formal business needs and expectations. 2. Be explicit about your expectations. You intend to deliver to business a system that embodies and promotes: o o o o Efficiency. Flexibility. Cost savings. Scalability and adaption so that the solution easily: Incorporates a progressive inclusion of departments and processes on an easily managed basis -particularly during initial implementation.
Contents
Page 3 of 11
Sponsored by
o o
Accommodates future expansion of present lines of business. Accounts for new lines of business. Allows for new resource setups. Adapts to evolving business loads, such as new regulation and oversight.
Contents
Ease of maintenance. Measurements, analysis and reports.
3. Solicit initial vendor input. This is not yet a formal "fit to requirements" document. Initially, get some high-level overviews from representatives via email and see who has a handle on your organization's interests. This is an initial quick pass -- that will eliminate unsuitable vendors and products. 4. Narrow your selection: o Ask whether the vendors have delivered ERP for organizations similar to yours: Study integration considerations against your present suite of products, databases, general content, business methods, etc. Examine timeline expectations and potential burdens and interruptions to business. Factor this into vendor selection based on assessed ease, or difficulty of installation and adjustments. Look for a confident statement of steady, prudent, progress of installation and production deliveries vis-vis other vendors. 5. Get references. For each vendor, talk to organizations that have gone through similar implementations: o o o Assess their satisfaction with the ERP vendor. Were deliveries made on time? Was the system delivered on budget?
Page 4 of 11
Sponsored by
o o o
Are there measurable, empirical benefits -- and has ERP, in effect, paid for itself and beyond? (It should.) Solicit challenges, both those that were known going in and, just as importantly, those that were not anticipated. Do they have any regrets?
Contents
6. Choose three or four strong players and invite them in-house for product demonstrations: o o o Understand that IT may wish to prequalify the vendors by examining product demos before inviting the business in. Have selected vendors demonstrate their products to key business department leaders and staff. Be certain that current IT staff members have the capacity to maintain specific ERP systems, or the ability to learn how to do so. o Upon ultimate selection, be absolutely sure to have full agreement on the vendor and allied product by IT governance leaders and other business players. o Solicit a formal business proposal.
Implementation timeline: In concert with key business stakeholders, the organization must develop a meaningful ERP implementation plan. There are a number of templates on the Web that will help you with key considerations. Your enterprise will have unique considerations as well. Remember that an ERP system can cause massive disruption if not managed properly. Jobs will change, consolidate and even be eliminated. As the IT leader, you will need to determine if an ERP system can be implemented incrementally -- perhaps across two allied departments with mutually reinforcing content, process and service -- with a plan for full rollout to the whole enterprise. This might seem counterintuitive: Isn't ERP meant to address the whole of the organization and its operations, bringing centralized management and
Page 5 of 11
Sponsored by
consolidation of data and process? In its truest sense, yes, but ERP will likely be staggered in its ultimate delivery across the enterprise.
Contents
ERP as SaaS: Sunny future in the cloud? Just to keep life interesting, and as if a major implementation weren't challenging enough, let's take a quick look at cloud computing's impact on ERP considerations: If you're already largely in the cloud, with key critical business components being delivered as Software as a Service (SaaS), cloud ERP is pretty much moot, as you would be centralizing and consolidating discrete systems and data already residing in the cloud. Hashing out vendor relationships and access may be an issue that will drive those with whom you do business, and, ultimately, where your critical business content and processes reside. If you are not presently in the cloud but are interested, it's a logical step to do in-house ERP, where process and data already reside. Once your organization is swinging with a centralized ERP system (and has that implementation/use challenge under its belt), then migrating ERP to the cloud becomes just another (comparatively) routine migration. A third distinction exists: A midsized business may not have in-house expertise for ERP system management, although that's a bit hard to imagine -- most general IT departments will have ready potential. However, you may engage in what some would consider a rather risky change: consolidation of process and centralization of data to a common system (ERP), and simultaneous (or even near-term subsequent) migration of process and content to the cloud. While this is not recommended, with talent and care it can be accomplished when demanded. Bottom line: Set realistic timelines, budgets and expectations, and be up front with potential vendors. Working together closely can establish a strong relationship that will ultimately benefit both parties.
Page 6 of 11
Sponsored by
Assessing the need for an enterprise resource planning system Contents

An enterprise resource planning (ERP) system can be a good way to organize and manage the internal and external resources that keep your business humming. An ERP system can also be a complex addition to your organization, and midmarket businesses in particular must decide whether they are ready to capture and leverage efficiencies enabled by an ERP implementation vis--vis the expenditure of capital and effort. ERP's ultimate goal -- its delivery -- is to unify the enterprise's common purpose, assets and information. It provides an overarching system of control and facilitates sharing to eliminate redundancies. A common example is a customer service center that contains a record showing one version of a customer's status (orders, billing, payments, etc.), and a finance department in the same enterprise with different status information. This discrepancy may reflect a recent change made by the finance department, and the true status may not yet be available to other departments. As a result, customer service cannot serve accurate information. ERP can eliminate these silos and reduce waste, allowing the organization to save time and repurpose information across the enterprise for greater efficiency. With these goals in mind, here are two areas to consider when evaluating your midmarket organization's need -- and readiness -- for an enterprise resource planning system. Survey your organization's ERP needs In determining your enterprise's potential degree of improvement with an enterprise resource planning system, the IT leader must survey the business, all processes and any allied resources in concert with capable business partners. Sanctioning, supporting and ensuring companywide participation in the survey is absolutely necessary to secure strong buy-in with IT
Page 7 of 11
Sponsored by
governance. By working together, the business and IT can better understand the needs and expectations of the users and, as appropriate, present this information to senior executive management. Start by asking the following questions: Does your organization struggle with competing (erroneous) data among departments for common entities, such as customers, budgets, statuses and priorities? Do various departments in your organization appear to be siloed, with resulting limits of coordination and share? Do you sense an inhibition to collaboration, both in terms of ability and culture? Do you have redundancies of effort, such as employees entering the same data in more than one system? Do users sometimes work at cross-purposes, requiring time-consuming redos? Do you seem to have an overabundance of manual tasks that can be automated -- for example, batch routines that await manual input from another discrete system? Is workflow in your organization murky and badly documented? Are some assets underutilized? For instance, you may find that a new server was procured for an emerging requirement, only to discover that space, processing and bandwidth already exist on present, even idle, resources. Chances are your enterprise struggles with some redundancies, silos and a ceiling on efficiency, so you should consider the variety of departments that must track resources, workload and performance: Marketing and sales. Cash receipts, cash disbursements and purchasing. Business reporting/financial statements. Production and logistics.
Contents
Page 8 of 11
Sponsored by
Systems and allied structures, management and processing. Human resources.
Contents
Look for areas of redundancy, wasted effort and duplicated resources across these areas. If you sense that there is enough weight for some measure of improvement, then compare that potential with impacts and changes that the ERP system presents to the business. How an ERP system affects the business As the IT leader, it's up to you (in conjunction with your business counterparts) to weigh the potential for improvement against a number of changes, because an enterprise resource planning system transforms the way business is done. Departments and individuals may no longer have sole discretion over data, processes or even formerly discrete resources. Certain authorities may retain securities and power over process, but a wider audience will be able to view the data, and processes may be splayed open for all to see. This transparency allows strategic planning and assessment to be more accurate and readily available for senior executives. Understand that as potentials for efficiency are exposed, and as onceindependent departments are now measured against a standard, companywide system, many individuals and departments will also feel exposed. With ERP, whatever measure of independence some departments had, they can expect to lose some, and you may experience some pushback from users. Also, consider the following: The ERP system will need to be administered and managed by both the business and IT. Depending on the size of the organization, IT may require a full-time administrator, as well as a bolstered help desk presence to support the business' use of ERP. A qualified IT person will also have to manage the vendor (including a post-implementation evaluation). Functional areas may be broken apart and rebuilt. Jobs might be eliminated, and other jobs might reform or consolidate.
Page 9 of 11
Sponsored by
Business elements will have to understand new interfaces, new workflows and new collaboration methods. The business will have new integrated reports, metrics and judgments of performance. The enterprise must budget time and money for training and an adjustment period. Perhaps the greatest challenge: The business culture will change. The IT leader must have strong business allies, with consensus and willingness throughout the enterprise to support the major business change. When assessing an enterprise resource planning system, keep in mind the ultimate payoff: Processes become more efficient. ERP consolidates data into a central repository, enabling access to real-time, accurate information. Resources such as physical assets, time and staff are maintained by a single system of control, enablement and leverage. With proper enterprise resource planning, waste and inefficiency are driven down, while productivity and returns are driven up. Take the time to determine your needs and expectations for the best fit.
Contents
Page 10 of 11
Sponsored by
Contents
Free resources for technology professionals

TechTarget publishes targeted technology media that address your need for information and resources for researching products, developing strategy and making cost-effective purchase decisions. Our network of technology-specific Web sites gives you access to industry experts, independent content and analysis and the Webs largest library of vendor-provided white papers, webcasts, podcasts, videos, virtual trade shows, research reports and more drawing on the rich R&D resources of technology providers to address market trends, challenges and solutions. Our live events and virtual seminars give you access to vendor neutral, expert commentary and advice on the issues and challenges you face daily. Our social community IT Knowledge Exchange allows you to share real world information in real time with peers and experts.
What makes TechTarget unique?

TechTarget is squarely focused on the enterprise IT space. Our team of editors and network of industry experts provide the richest, most relevant content to IT professionals and management. We leverage the immediacy of the Web, the networking and face-to-face opportunities of events and virtual events, and the ability to interact with peersall to create compelling and actionable information for enterprise IT professionals across all industries and markets.
Related TechTarget Websites
Page 11 of 11
Sponsored by

How To Select The Best ERP Strategy For Your Business

Hochgeladen von

Dokumentinformationen

Originalbeschreibung:

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

How To Select The Best ERP Strategy For Your Business

Hochgeladen von

Copyright:

Verfügbare Formate

How to select the best ERP strategy for your business