Reasonable Cost for an ERP
As you know that not all ERP system costs are the same. It is natural that the big players in the market such as SAP and Microsoft will charge you very high even if your organization falls under the small and medium sized category. But providers like eresource develop ERP system to fit the needs and budget constraints of small businesses. As everyone is aware that eresource ERP is one of the most affordable and effective ERP systems available in the market.
Another factor about the high or prohibitive ERP system is its cost estimates may be based on the option of buying and implementing a complete integrated ERP solution and then hiring an independent IT department to manage and maintain it. With web-based ERP system all the operational methods becomes an easy process and all the technical aspect of the system could be managed efficiently by the users with the proper training and timely assistance from eresource personnel.
ERP project implementation – Exposing the top management to the benefits of ERP through the real world case studies, sharing of experience by other corporations that have successfully implemented ERP and creation of awareness is the first step.
Convincing the top management to use a high risk, high reward scheme such as ERP is a major challenge. Almost all the members of the organization should get the excitement about ERP project implementation. Communicating and sharing of the ERP vision is the most important organizational preparation for a successful ERP implementation.
Preparation required before an ERP implementation : One of the biggest problems that many have had with implementing ERP is misunderstanding what ERP is all about and underestimating what it takes to effectively implement. Driving ERP preparation and implementation, senior operation management cannot relegate critical decisions to workers who may not have the background and/or the temperament for this type of decision-making.
Companies need a well thought out and comprehensive process that will help plan, guide and control the entire ERP implementation effort. Starting an implementation with an undocumented, skimpy or untailored implementation methodology is open invitation to disaster and at the very least, a long drawn up implementation.
Everyone from the board room to the stockroom needs to clearly understand their role and responsibilities for implementation and above all encourage dialogue that will get people focused on the business objectives as well as early identification and or correction of any problems. In addition, and no small matter, the question of how, when and who will be accountable for results must be an integral part of this understanding.
An implementation that is going astray becomes recognizable when repeated schedule slippage surface. As time moves on the schedules miss problems starts to compound the implementation quality, as the invariable response is too start taking short-cut; and by-passing critical business issues.
Points to remember while choosing an ERP package :
An ERP Manager must have the ability to exercise overall day-to-day control of project leaders and the resources of the program, balancing the needs for program success with the skills and capabilities of the staff. He should also be a good communicator and must interact regularly and comfortably across various departments from individual to the ERP Management Team level in order to negotiate solutions that foster strong relationships and continued success of the project.
The ERP Manager is responsible for the development of an effective planning process, for the creation of an integrated project schedule that encompasses all aspects for the ERP Program and for the actual execution in conformance to plans and the continuing update and adjustment of plans and execution to fit changing circumstances.
Implement and lead an effective project change management process that pro-actively identifies project changes and incorporates an appropriate impact analysis and approval for such changes across the ERP program team. He is responsible for creating and maintaining a monthly financial management process that incorporates actual financial performance to forecasted performance and justifies all variances; accurately forecasts expenditures in alignment with the project budget and supports the budgeting process throughout the project lifecycle. He also must follow the company’s financial processes and policies.
Actively directs the development and maintenance of plans, practices and assignments to identify, quantify and contain the occurrence and potential impact of risks and risk events on the execution of a program and its likelihood of success.
An ERP Manager is responsible for making timely, effective decision at the project level and communicating those decisions both up and down the program structure, while approaching needed decisions in a logical and thoughtful manner and weighing conflicting information.
Leadership quality including the ability to motivate, inspire, counsel and facilitate individuals and teams to take responsibility and accountability for the goals will be an added advantage.
As we have said it earlier, all ERP software implementation cannot be 100 per cent successful and the reasons for this are various. Though this may be the ground reality, the failure percentages are getting reduced to the lowest, which is surely an encouraging development.
Poor planning is the main cause of ERP implementation failure. The scope, size, complexity and change required for a successful ERP implementation requires support from all corners of an organization. Without major decision makers involved from the beginning, critical steps and activities can be easily overlooked.
Change management is the second reason for any ERP implementation failure. Changing the corporate culture, business processes and employee training can be a long-term, uphill climb. Understanding change management and training are essential components to a successful ERP implementation. Employee training should begin before implementation, educating all employees of the benefits of using this new tool; making their jobs easier and the organization more efficient as a whole.
Poor selection of wrong ERP tool is another reason. Some of the biggest ERP software implementation failures occur due a mismatch between the needs, processes and structure of your organization with the implemented software. This can create significant problems such as loss of productivity and time along with many of the new system’s benefits. Therefore it is very important to select the right ERP for business to avoid any failure from that quarter.
Thoroughly understanding the complexity of an ERP implement would contribute to the success of its implementation. Some companies, on the process of cost-saving exercises, will run over budget on their ERP project by requiring their IT department to work overtime to complete the implementation. However, with inadequate skills and directives from the contracted software provider this exercise of the IT department will turn out to be disaster which would create only more knots in your ERP software implementation than make any progress.
It is important consider your ERP system as a complex project. Considering the ERP system as a simple IT project can be the most costly mistake one can make. Without proper input company-wide, your ERP system will not be engineered and aligned to work with the business processes and needs of your employees.
There are many reasons to get ERP system for a successful organization. Here are some of them.
ERP systems automate business processes by putting them into a useful format that is standardized and common for the whole organization, and it could even be used between their suppliers and customers. It captures data about historical activity, current operations and future plans and organizes it into information that every staff member can use to help develop business strategies.
ERP integrates financial data. Managers try to understand the companies’ performance, and they may find many different versions of the truth. Financial department have their own set of revenue numbers, and the sales department has its own as well.
The different business units may have their own versions of how much they contributed to revenues. ERP creates a single version of the truth that cannot be questioned because everyone is using the same system, giving managers correct and complete information.
A special case is found in manufacturing enterprises. These companies – especially those with an appetite for mergers and acquisitions – often find that multiple business units across the company make the same kind of work using different computer systems. Standardizing those processes and using a single, integrated computer system can save time, increase productivity and reduce head count besides improving the quality of information.
Selection of ERP Solution
On the priority basis the first choice should be that the ERP you are selecting must be Product Fit. As you know there are many ERP products on the market and each designed for a particular segment. Therefore, you must ensure the product is aimed at your type of organization. If you are a small, regional discrete manufacturer, then don’t buy a product intended for very big organizations such as oil refineries etc.
Second point is the ERP software must be Process Fit. After doing a rough cut analysis for product fit, it is necessary to look thoroughly at your own needs and match them against the ERP solution you have opted for. Make sure that the software is integrated with all the modules you are looking for and it is well designed to suit your requirement.
You must also check the reliability of the solution providers. Since ERP is a long-term commitment, ongoing support / maintenance are essential. The software firm that you are dealing with must have the resources and technician to carry out the whole operation and further maintenance and training successfully. You must also check that their implementation methodology is efficient and reasonable.
Lastly before you have decided with one of them consider whether the pricing is reasonable and the terms are acceptable. Don’t forget to include ongoing support and maintenance in the price discussion.
ERP Implementation – The members of the implementing team that are going to be dedicated for your company during the implementation are a key success factor to consider. Rather than concentrating on having a big name behind your implementation, we would suggest you get more details of this less well known company.
If this small company has good capabilities among them and seem to be up to their promises in the contract, then this would be satisfying.
Sometimes big named companies would issue a sub contract to smaller implementing companies, but usually and for some reasons such implementations fail.
Again, you might get excited during the discussions held, but nothing is going to be guaranteed if not documented in the contract.
Flexible Reporting and Analysis? – Operational reports from the ERP system show recent events, but they do not satisfy managers’ requirements for planned versus actual monitoring, forecasting and exception analysis. Without business intelligence, managers must compile these reports manually from standard reports.
By allowing flexible reporting and analysis, a business intelligence system can unlock the value of the data in ERP reports. The information in the ERP daily orders report, for example, can provide information that will help in better decision-making and can be of use to the decision-makers in more than one department. For example,
Business intelligence system provide on-line analytical processing (OLAP) and data mining tools that managers can use from the desktops to answer the types of questions above and to discover significant trends and patterns.
For example, analysts can drill-down to obtain progressively more detailed information about retain sales, change metrics, view graphs and charts, re-use reports, create ‘what if’ analysis and generate best-case and worst-case scenarios. Valuable in its own right, ERP information becomes even more valuable when it is combined with information from other sources.
