Enterprise resource planning (ERP) systems automates the business processes across all departments in a company. Using this definition, even a system like Tally and QuickBooks can be considered an ERP system for a small company or an organizations . But while some ERP systems have been designed for multiple industrial department, others are meant for specific industries/verticals. Some of these vertical solutions are developed by one company — for example, SAP which is best solution for ERP.
Some ERP systems are installed on site or can be said as installed at a local server and others are in public or private clouds. Public clouds allow multiple organizations to share the same instance of the software with one integrated server. Public clouds require multi-level architecture and are often referred to as SaaS (Software as a Service). Private clouds provide one instance of the software and a single server to be used for the exclusive use of one organization. There are several advantages and disadvantages to each type of cloud. For example, the public cloud will be less expensive and the private cloud will allow more customization and hence can be more expensive.
LESSONS LEARNED from last survey :-
In previous years, we have mostly discussed ERP trends. This year, we are taking another tack — sharing what we have learned in the trenches about selecting and implementing ERP systems.
1. Critical requirements need to be precise. Critical requirements refer to unique/strategic needs that are not standard out-of-the-box features that would you find in many solutions. Even the smallest omission in defining these requirements can lead to huge costs once the implementation has begun and the vendor finally understands the requirement.
2. Scope must be well defined in the contract. We recommend that the requirements in the RFP (Request For Proposal) be referenced as part of scope in the contract.
3. Use your A team on the implementation. You will need to find ways to unload some of their day-to-day responsibilities.
4. Having the right implementer is just as important as finding the right software. It’s not enough for the implementation team members to know the system. They must also be experts in your industry and strong in project management.
5. Implementing a new system is by far the best way to improve business processes. Every problem should be considered an opportunity.
6. Project management is key. You can’t rely on the vendor to manage your internal team. You also need to ensure the vendor lives up to its obligations in term of cost, timing and scope.
7. Measurements of success should not be forgotten. When you start any project, you should know how to evaluate its success. While it’s important to stay on time and on budget, success has more to do with achieving strategic goal metrics (key performance indicators, or KPI) such as improving the time it takes to ship an order.
8. Avoid customizations if possible. These can lead to significant costs during the implementation and when the system is upgraded in future years.
9. Testing is key. Even though the system might be used by thousands of other companies, there are so many ways to set up a system that you might not get the expected/required results.
10. Don’t overlook change management. You would think employees would be onside for changes that will improve their skills and make them more marketable. But there might also be some resistance. Employees might be worried about losing their jobs after all the inefficiencies have been eliminated. They might be worried about the amount of work required to do the implementation when they are already maxed out. And, finally, some employees might fear losing power once processes are automated or important information is stored in the system.
Bottom line: be rigorous in selecting a new system. There are no shortcuts — even if the vendor claims it can provide "best practices" based on its extensive experience in your industry. Best practice can be great for standard procedures but can lead to disaster for unique or strategic requirements.
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