DEFINING ERP
by Michelle Da Silva and Zenia Nothnagel

Enterprise Resource Planning Systems

ERP is a strategic tool which helps companies gain a competitive edge. By integrating all business processes and optimizing the resources available helps manage the enterprise as a whole, implementing best practices for each business process across an entire company.

In essence, ERP is the concept of taking many departments and combining their unique systems and utilising the methods used. Information collected and processed by these separate departments, combining it all into one system, enabling seamless communications between departments, suppliers, clients and management.

Where necessary ERP also provides important user friendly information to the company. When changes occur the system will update accordingly, also allowing individuals to work more effectively and decrease redundant data.

The rate of success is badly outnumbered by the rate of failure in ERP implementations mostly due to human influence and implementation strategies. This is daunting for most companies and demotivates the majority of them from attempting this.

A company should however not feel intimidated to take on ERP as a result of the numerous failures which have occured in the past to other companies. By identifying the mistakes that these prior companies have made and learning from these, your company is given the ability to prevent these similar mistakes from consequentially taking place during the implementation of your own unique ERP solution. Take this to your advantage and don't be afraid of using ERP because it offers the plentitude of benefits of which you have only dreamt.

The Core Objectives of the ERP:

The true goal of ERP can be defined as being to implement the best practices for all business processes. The main reason for this is that it allows for the streamlining of financial and administrative systems. One of the greatest benefits of incorporating ERP as a key business strategy is it's ability to fundamentally eliminate multiple systems with no more redundancy. Individual agencies can hereby share important information in a standardized way, proving for a reduction in time spent doing this and a resulting improvement in productivity. All-in-all costs are reduced by implementing ERP for discovering only the best practices for all the business processes needing to be carried out.

How to successfully approach the ERP:

The most important element of ERP is communication, which can be in effect used to decide on issues quickly and decisively, in order to set reasonable expectations. Reliable implementation costs and time required for implementation need to be forecasted at the start of a project, alongwith, ensuring that the technical infrastructure is sufficiently robust before implementation, and that a single, unified database is used to store data for the various system modules.

Companies need to actively build a base of support for their projects. This could possibly mean having a successful ERP company as a support or backup and enjoying the benefits which could result from this consequent team-effort. The most talented business manager of a company needs to be promoted as project manager as this shows a positive and professional reflection of a company and sits well with users. Users need to furthermore be trained for the reason that they will drive your system and essentially be the key to your success or failure of your ERP project. All-in-all the ERP implementation needs to be treated as a business transformation and not as an IT project.

The most common reasons for why ERP is not successfully implemented:

With reference to what has been said above, not many companies have been successful in the past with regard to the implementation of an ERP solution for their unique businesses. This is for the reason that they fail to recognise certain factors which lead to disastrous mistakes occurring. One of the most predominant reasons why these companies fail at the end of the day is as a consequence of unplanned or under planned phases of implementation. An example of improper planning can be given that a company will establish a business process, think it through, and implement it, but all before the selection, purchase, and deployment of the software solution. It is possible that by overlooking a critical stage such as this a company implementation strategy could be lead to its eventual death.

Planning is crucial for the correct implementation of any new business process into the existing strategy of a company. This is for the reason that something bought that is not a good fit for the requirements of a company may cause technical problems. Ignoring the importance of the requirements definition means that you are subtopics the capabilities in the technology in the long run, and by not using the technology as an enabler for the process, your business processes will not be streamlined.

Purely focusing on technology is another hazard for a business as this alone cannot solve a business problem. To elaborate upon this, never abdicate responsibility for the implementation by assuming that all issues have been addressed or even identified by the vendor in believing that technology alone will prevail. Poor implementation can elongate the development cycle with badly defined requirements which result in inadequately defined measures of success.

An ERP project should therefore never be rushed into. Do not jump straight from the requirements definition to the development phase by skipping necessary implementation steps. These steps such as building a solid implementation plan and a solid understanding of what it will take to develop and implement the solution before hand are in the end vital to the success or failure of your ERP project.

Companies can lastly avoid the failure of an ERP solution by training their users. As stated in the information above, users are key to determining the success or failure of an ERP solution and should therefore be delicately treated with care.

When to Consider ERP

Company growth is something towards which all serious businesses strive as this gives a direct indication of their success and productivity. A company needs to however consider implementing ERP in the emerging situation that this growth becomes fast and uncontrollable, leaving little or no ability to forecast and plan production requirements with any degree of accuracy. Being on target further displays that by having their head screwed on properly a company is hereby achieving their ultimate goals. A company needs to consider an ERP when their exact financial and operations performance is unknown, inaccurate customer expectations and job costs are predicted or even unknown, and promised delivery dates are regularly missed. An ERP needs further consideration when the inventories of a company do not meet or far exceed production requirements on a consistent basis.

With an ERP in place a company can benefit considerably from all that it offers and is able to perform. By implementing an ERP, employee efficiency is no longer affected as it now only takes one simple step to capture vital data, with no duplication of the efforts needing to make this happen. Implementing an ERP further allows a company to overcome problems and issues which are leading to their devastating failure and are as such able to replace the systems currently in place which are negatively impacting the ability of an organization to grow.

Examples of packages commonly referred to as ERP systems include:
SAP, Oracle, PeopleSoft(from Oracle), J.D. Edwards, BAAN, Dynamics/Axaota (from Microsoft), Solomon (from Microsoft), iScala, MAS, and Microsoft Dynamics GP

Conclusion

Thus to conclude, by reflecting on what has been said above with regard to an ERP and what implementing this into your business strategy can do for your business success, it is imperative that you should deeply consider an ERP solution for the benefit of your company. Identifying that your company needs aid in order to achieve its ultimate goals and dreams at the end of the day is the first step to putting your company on the right track towards total business improvement and success. ERP is a popular business solution subsequently being implemented by a number of companies who are enjoying the benefits of this solution for themselves today. Enterprise Resource Planning is a great, if not the best way, to ensure that you allow your company the opportunity to become the success of which it has the potential to ultimately attain.