Implementing an Effective ERP Strategy

Enterprise Resource Planning (ERP) can be an extraordinarily valuable tool in the quest to streamline operations and improve competitiveness, but make no mistake about it: This is very complex software that can very easily foul things up if not provisioned and deployed properly.

As a resource management system, there isn’t much in the enterprise that ERP does not touch; it gets into finances, human capital, manufacturing, infrastructure, and a host of other functions. This, in fact, is primarily why it has proven to be such a valuable asset, since many inefficiencies in enterprise business models arise from the discoordination between isolated structures.

One of the main considerations when evaluating ERP solutions is the vendor’s ultimate development goals, says Pat Phelan, vice president of market research at software support firm Rimini Street. Organizations can become dependent on their system pretty quickly, so it pays to assess the roadmap of a particular platform before committing. A key aspect of most systems today is how deeply they will rely on the cloud, which may or may not provide the reliability and stability that enterprises need for such a crucial piece of software. As well, few organizations are prepared for wholesale transformation of their back-office procedures, so it might pay to adopt a system that integrates with legacy operations.

It will be difficult to find an ERP solution that does not incorporate the cloud in one way or another, however, which means the enterprise must do its homework when contemplating a move that will affect core financial systems. Oracle’s Margaret Harrist recommends nailing down a number of key criteria before committing to a platform. These include whether the system has been rewritten for the cloud or is just a legacy on-premises solution with a new host, and whether the vendor is financially stable enough to continue supporting such a critical piece of software. As well, it helps if the solution provides broad integration with other enterprise software, such as CRM, BI and productivity suites.

But as the saying goes, the best laid plans of mice and men often go awry. When contemplating a transformation of this magnitude, it helps to plan for failure rather than focus on complete success. According to Matt Peterson, senior director of industry solutions at software developer Enavate, top reasons for ERP failures include poor alignment between the deployed solution and enterprise goals, plus a failure of executive leadership and lack of influence at key decision points. At the same time, there is a fine line between trying to do too much too quickly by rolling out an all-encompassing solution and losing momentum with a limited deployment that fails to make noticeable change and becomes weakened by incremental upgrades. To combat these and other issues, it helps to have realistic expectations at the outset and maintain clear lines of communication up and down the enterprise hierarchy.

Obviously, there is no right or wrong answer when it comes to ERP. Every organization has different goals and has evolved its own legacy infrastructure and processes. But it is fair to say that organizations that continue to struggle with inefficient operations and slow product development and delivery will be at a distinct disadvantage in a digital economy.

The details of any given ERP solution may be difficult to nail down, but the rationale for putting something in place is crystal clear.

Arthur Cole writes about infrastructure for IT Business Edge. Cole has been covering the high-tech media and computing industries for more than 20 years, having served as editor of TV Technology, Video Technology News, Internet News and Multimedia Weekly. His contributions have appeared in Communications Today and Enterprise Networking Planet and as web content for numerous high-tech clients like TwinStrata and Carpathia. Follow Art on Twitter @acole602.