Resource Planning or simply ERP is the business management software to manage
all the core business processes. ERP covers almost all the common functional
areas like finance, HR, Sales, Manufacturing, Supply chain, Project Management
etc. This helps to perform each business processes in the most effective way.
According to the nature of business the type
of ERP varies from company to company. Some may be having very complex business
operation and managing those processes should be done with utmost care. And so
choosing the right ERP which fits your business model is very crucial.
There are many benefits of using an ERP like
- · Improved
efficiency and quality of business processes and thus better output/result.
management with correct reports which helps them in decision making
- Any member
of the team can access the data if needed
- One central
database with no duplication of data that means integrated information
security of data etc.
As there are many benefits, ERP has become an
integral part of all the major organizations. As the business grow, the
complexity of the processes also increases. If a new business operation comes
up, you need to look for many things. Doing everything efficiently at that
point of time is a hectic work. A comprehensive business model is required to
accommodate all these changes and complexities.
Most of the companies go for customized ERPs
which suite their business model. After analyzing the requirement of the
company the engineers customize the ERP according to their need. It may include
restructure of the queries, report data, input output etc. while customizing
the most important thing which has to be taken care of is it should match and
work according to the organization’s desire.
Customizing ERP has got both advantages and
disadvantages. So before going for customization one should thoroughly
understand what their pros and cons are. Customized ERP is more user-friendly
and it gives a competitive advantage for the business.
Some important points which can be noted in
order to choose the right ERP are:
- Analyze the current process and your “to-be”
state: That means you should
first define and document your current business processes, weakness and
strengths. This analysis should also include what you think your processes
should look like in the future (your "to-be" state) and the
corresponding business requirements. You should find software vendors. These processes and requirements should
eventually be used for potential software vendors to demonstrate their
product's capabilities within the context of your business needs.
- Technical fit of the particular ERP : It's also important to understand how a
potential software solution will align with your current infrastructure
- Understand the total cost of ERP: Be sure to uncover "hidden costs"
associated with ERP, including implementation costs, hardware upgrades,
backfilling your project team resources, software maintenance, etc.
- A realistic implementation plan should be developed: It's important to develop a comprehensive
project plan that includes not just the activities required to install the
software, but the ones that are required to ensure that the solution is fully
functional, tested, and accepted by end-users. This plan should be developed
prior to your final software decision so you fully understand the cost and
resource commitments required to make the project a success. Your
implementation project plan should include everything from business process and
workflow design to data migration, conference room pilot, multiple test
iterations, and key organizational change management activities.
- Track the real benefits of the new system to
the business: We are
using an ERP with expectation of reducing costs, increased revenue or scale of
growth etc and you should actually estimate and measure benefits against these metrics
if you are going to realize the full potential of ERP.
- Choose from various options available: You may be knowing only two or three ERP
venders in the market who constitute majority of market share. But there are so
many other ERP software solutions in the market with varying functionality and
strength. You need to consider the
options that are going to best meet their unique business requirements and sources
of competitive advantage instead of choosing a solution based on brand name.
- Always do a research before purchasing an ERP: Do consult with your friends, colleagues,
employees or other contacts what they recommend for a company like yours. Also,
use internet to know more about the ERP other than what you are hearing from
software sales rep.
Making the right choice
for your ERP system will improve your business’s operations, automate most
data-driven processes, and integrate your entire infrastructure. While a failed
ERP implementation can be very damaging to your business.