Enterprise Resource Planning (ERP) aspires to integrate the various business functions in an organization.
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Enterprise Resource Planning (ERP) aspires to integrate the various business functions in an organization to help standardize and streamline its business processes. An ERP can cater to multiple business functions including Ledgers, Finance, Statutory Regulations, Accounts Receivable, Accounts Payable, Fixed Asset Management, Inventory Management, Manufacturing Management, Production Planning, Payroll Management and Customer Relationship Management.
Selecting the right ERP can be a challenge. The association between ERP and implementation failure is a frequent occurrence. Therefore, we would like to share our understanding on ERP implementation failures with you and sound a warning against some of the common grounds for implementation failure. We recommend you to consider these points very strongly when deciding your ERP.
The cost of ERP implementation versus the benefit derived post implementation is a critical factor for consideration. An ERP should help overcome the cost and continue to pay dividends for years to come.
Although the basic operation model is standard in every industry vertical, there are exceptions that make yours’ unique. An ERP should account for and cater to each exception and meet the precise requirements of your business.
ERP sales representatives often understate the level of resources required to close the deal. Therefore, many companies fail to budget adequate time, money, resources and external consulting support to make the project successful.
An ERP consists of multiple modules. However, a business should limit the scope of the implementation to the module(s) needed to meet its operational goals. An attempt to overachieve can lead to failure.
ERP implementation can be a long and expensive process. Businesses should identify the deliverables and relevant cost implications for development and deployment of various modules along with the timeline. Cost of ownership of the required hardware system is a onetime expense, however the cost of upgradation and maintenance should be carefully considered as well. Additionally, salaries of IT managers and trained operators will remain a recurring cost.
Your employees will be the key stakeholders impacted by the ERP implementation. Consequently, employees from every department should preview the product to ensure their respective requirements and concerns are addressed.
Technology and business process implementation are generally the pillars to short list ERP vendors. However, the credibility of the vendor and testimonials to back the service quality should not be discounted.
Although the primary criteria for ERP selection will be the current business requirements, future enhancements and requirements should also be considered and relevant provision should be maintained in the ERP.
A lot of issues arise once an organization starts using the implemented ERP system. Unless the issues are addressed appropriately and in a timely manner, the ERP cannot function smoothly.