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What's the secret to a great ERP system?

April 25, 2014

Enterprise Resource Planning (ERP) software offers businesses remarkable opportunities to improve their operations and get the most out of their IT networks. However, IT pros and corporate leaders working on implementing an ERP project need to be aware of the challenges and risks associated with the endeavor so they can choose the right system for their organization and put it into place effectively.

Recent research has shown that a hefty proportion of ERP projects fail to live up to expectations. Whether these shortcomings revolve around costs, implementation duration or the end result, they can set companies back on their technological goals and prevent them from achieving the ROI they anticipated. Many of these issues result from a lack of expertise and personnel to assist with the project. In addition to bringing more support on board, even temporarily through IT consulting arrangements, project planners should ensure they spend sufficient time researching, planning, training and testing their implementations so that their businesses can enjoy a solid foundation for future growth, productivity and cost savings.

Preparation: Setting expectations and forming a strategy 
To ensure they provide the resources their organizations need, project managers should have a clear understanding of their industries and their companies' business goals. With these insights driving the project, leaders must establish realistic timelines and ensure they have sufficient manpower and expertise to get the job done well. After evaluating the types of skills that the project requires, companies should decide whether to hire additional staff, train workers to make up knowledge gaps or outsource certain tasks. In general, forming in-house expertise in areas that require enterprise knowledge and outsourcing roles that don't is a successful strategy.

Managers also have to decide how the implementation process will be structured—whether the transition will be made gradually or through a "big bang" adoption. According to Enterprise Apps Today, big bang strategies are no longer as advisable as they once were, particularly since IT resources have become more complex and integral to corporations' activities. Therefore, leaders must give careful consideration to how the go-live process will impact day-to-day operations. The best strategies balance low-impact adoption methods with efficient timelines that avoid dragging out the project too long, the source suggested.

Implementation: Engineering applications and security 
When designing and putting a system into place, IT leaders need to think about business needs and security requirements. At the foundational level, these factors inform decisions about whether to go with cloud systems and which ERP software to use as a basis. Project managers must also consider the level of ongoing support their systems will require as well as the organization's composition in terms of size, technical knowledge and the types of activities that the ERP system must accommodate. For example, Manufacturing Business Technology noted that cloud-based solutions might be attractive to corporations that are looking to reduce costs and receive the assistance of managed service providers. However, security concerns will also play an important role in this decision, especially for businesses weighing their public, private and hybrid cloud choices.

As for the actual software itself, a number of factors can guide stakeholders' decisions. Organizations have a wide variety of options, so they should choose solutions that are designed for companies with their characteristics, including size, level of outside support, need for flexibility and industry-specific capabilities. From here, it's up to IT services to identify and implement the applications that will serve as useful tools for employees while also establishing the security measures that will keep the system and corporate resources protected.

Optimization: Customizing and supporting
Depending on the ERP solution they choose and the specific needs of their organization, IT teams may need to customize the offerings in order to derive the greatest value from the system. Although some offerings, such as Oracle E-Business Suite, typically require little tailoring, other solutions offer advanced features and functionality with the right customization, as TechTarget explained while detailing some of the midmarket ERP options. Companies with enough IT support and expertise to pursue a more complicated ERP project might find greater benefit in a system that is customized more specifically to their needs. In fact, Enterprise Apps Today noted that one of the reasons many ERP projects fail is that they're too generic. For businesses with less robust IT support teams, choosing an ERP solution that's designed for their vertical can help ensure they gain the functionality they need without custom development.

Training, testing and managing the transition are also crucial to getting the most out of a new ERP system. In particular, IT professionals must maintain oversight of legacy systems and resources until the migration is complete to ensure all employees can continue working on their professional activities as seamlessly as possible. As with any new technology, IT teams must train end-users to empower them with the knowledge they need to fully use their ERP tools.

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