ERP OPTIMIZATION CHECK-UPS
According to many studies, most companies use only a small percentage of the functionality available in their ERP systems. Why? Because they plan to implement additional features but the initial implementation drags on and is always more complicated than expected. At some point you simply have to cut over and go live on the new application and plan to go back and implement additional features in the future. But that rarely happens. There are also many companies that prefer a phased implementation where certain features are setup for the initial go-live and other features are intentionally left for future phases. But again, more often than not the future phases are never completed.
There are other reasons why companies use so little within their ERP systems. They may not know what features they own or how to use them. You are going to make a considerable investment in your ERP system – both in terms of time and money. Or perhaps they only implemented particular features for part of the business. For example, an ERP system often has built-in alerts that can notify users when things occur in the database. It’s not uncommon for companies to implement alerts for high priority items such as large invoices that are late or late shipments but most companies never go back and setup additional alerts for lower priority items that could be just as valuable.
You made a huge investment in your ERP system – both in terms of money and time. And you should get the most out of your investment. Here are some tips to help you optimize your investment and truly get the most out of your ERP system:
- Upgrade: Most ERP products provide new versions annually (or more frequently). Stay current with the latest releases and understand what new features are available. Assign authority for upgrade analysis to someone in your organization so that someone is looking at new features and determining how they can benefit your company.
- Training: Invest in continuing training for employees. Often times we implement ERP and then stop training. Over time the original employees forget what they were trained on or they leave and we never invest in training for new employees. Further, our business processes change over time and we must be willing to change our processes as well.
- Assessments: Pay for an annual assessment with your consulting partner. This should occur at least on an annual basis. Have them come in and spend a day (or two) with each department in your organization to discover what they struggle with and how to resolve those issues with training or potentially through customization, integration, additional modules, or third party products.
- User Conference: Most ERP vendors have user conferences with educational sessions and a trade show where you can discover complimentary add-on products to go with your ERP system. Attend annually and have a plan when you go so you optimize your time in sessions, connect with other users, and see all of the exhibitors.
- User Communities: Different than user groups, user communities exist online in various platforms including independent groups on LinkedIn and other forums. Join and participate in as many as you can.
- Internal RFP: Conduct periodic business requirement review with departments just like you did when you selected your ERP system to ensure that your software is still meeting your needs (more information available in Software Comparison).
- Read The Manual: Well, most ERP companies no longer provide printed manuals but they should have electronic documentation available. Read it. You may be surprised at what you can find out about your system.
- Share Best Practices: Have you ever sat and watched someone using Excel or using Word and saw a shortcut to do something that you never knew existed? The same is true with your ERP system. Every single user in the software will undoubtedly discover new and better ways to utilize the system. Meet frequently and encourage users to share best practices and tips with others.
Managing your ERP software isn’t that much different than managing manufacturing operations – it’s all about continuous improvement. Create teams to identify broken or cumbersome business processes and work with your technology partners to identify solutions. When you knock out one solution, move on to the next one on the list.
We recommend using our ERP RFP requirements template as a tool to evaluate your existing ERP system. The RFP template has a built-in grader to score each area of your existing software so you have a clear understanding of what’s working well and where you may have functional gaps that need to be addressed.
Selecting the right ERP vendor, product, and consulting organization is not easy. You have a lot to consider. It’s fairly easy to document requirements and check-off whether the product supports your high priority business requirements but as they say, the devil’s in the details. Most ERP systems do about the same thing. In fact, we estimate that most ERP systems offer about 80% similar functionality. But the difference is how they do it and how you will address the other 20% of the functionality you need. For example, you’re going to need access to reports. Every ERP system on the planet can give you reports but lower-end systems probably have fewer reports with less data while a more expensive ERP application probably has more reports with more data and tools to quickly create new reports with options to automate report creation and delivery. And this is just one example of thousands that you need to consider. You also need to consider the underlying technology platform – is it stable, is it easy to find people who can work in the toolset, and is it easy to integrate to other systems.
Pick the best overall solution. We’ve seen it time and time again where a company selects a product because it has very strong accounting features but they implement it and quickly realize the manufacturing system is absolute crap or vice-versa. Make sure that you’re selecting the best overall product for your business keeping in mind the requirements of every part of your business.
Consider the availability of third party products. Smaller niche or industry-specific ERP products typically have very limited third party options meaning that your choices will be very limited for products to extend your core ERP system. In fact, you may be completely dependent on the publisher to extend your system through costly customizations or integration projects. Conversely, most popular (and more general) ERP systems have large developer communities with hundreds of integrated applications. These systems may be a better fit given the variety of options available to you even if they don’t have all the bells and whistles you think you need that only the industry specific applications provide.
Our ERP Software Matrix may help identify potential products to evaluate based on the number of users you think you’ll need or the approximate total budget you anticipate for the ERP project. You may also find other useful resources for comparing ERP vendors and systems in the ERP Tools section of our website.
You may consider developing a scorecard from the RFP results to help your team to evaluate each potential vendor and product using a standard system rather than relying on personal preference. For example, a scorecard will help identify which products meet the majority of your required features. You can then reference this scorecard prior to the ERP software demonstrations and have each vendor show how they resolve the high priority business requirements.
We can help you with all aspects of your ERP evaluation and selection process even if we aren’t the partner you choose and you’re considering ERP products we don’t represent. Let us help you narrow down the list of potential ERP products for you. We can also help you prepare the request for information (RFI) and request for proposal (RFP) documents to ensure that your business requirements are clearly documented for potential vendors you choose to engage in the process.