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October 18, 2018|
ERP systems are meant to streamline business operations and help complex organizations manage tasks across various departments. But too often, ERP systems become cumbersome and inefficient, taking up valuable resources and investment without giving businesses the advantages they’re looking for. The result is an ERP investment that has little to no strategic benefit.
How does this happen? According to Gartner, the primary cause of a failed ERP is a lack of “a well-thought-out ERP strategy that supports the business strategy, in order to deliver real business value.”¹
An ERP strategy is a long-term plan that will guide how your ERP system will be implemented, maintained, and upgraded. It’s a roadmap that helps ensure your IT team and service providers deliver the new functionality and improvements needed to further business goals while aligning with the wider enterprise IT ecosystem. Without a solid strategy, you risk saddling your organization with a system that rapidly becomes outdated and fails to support key business processes.
If you don’t have a strategy currently, now is the time to create one. If you do have a strategy, consider the last time you reviewed it. Strategies need to be updated regularly to ensure they still support current business goals. To help you get started, we’ve laid out four steps businesses can follow to create an effective ERP strategy.
Before you set a vision for your ERP, you need to determine where you are today. Setting a baseline is an opportunity to assess currently available systems and tools, review code currency, and determine the level of expertise and understanding of your systems by staff within the organization.
A full audit of your IT ecosystem will help you identify gaps in your technology and inefficiencies in your processes. You can use those as starting points when moving through the rest of these steps, comparing what your business does to others in the industry, and using current problems as the basis for improvement goals.
Just as you will want to understand the current landscape within your organization, take the time to determine the latest standards and best practices in your industry. Start by asking key questions:
For example, manufacturing companies using Oracle ERP systems can compare their key Oracle applications with what other manufacturing companies are using. If possible, determine how efficient your company is compared to others and how you can bridge the gap or heighten your competitive advantage by better leveraging your technology.
If you can’t get information on industry standards and best practices from partners or in-house personnel, consider working with a service provider. Oracle ERP users can work with an Oracle Partner that specializes in your industry. Partners and third-party service companies work with multiple businesses and can help guide you toward the industry best practices that will work for you.
With a clear picture of the internal and external landscape, you can now set the goals for your ERP strategy. Keep in mind that, as a component of your enterprise IT strategy, your ERP goals should align with and support broader IT goals. This can include developing your platform so it fits with other enterprise systems, like HR software, or incorporating upgrades that improve security, if that’s a larger focus for your IT team.
This is just as true for business goals. Determine how your ERP system can support and drive the business forward. It could be helping the business manage inventory or track customers more efficiently, saving staff time and reducing business expenses. Or it can support larger goals like gaining a competitive advantage by completing key tasks faster and more efficiently than your competitors.
An ERP strategy roadmap outlines the action items that need to be completed to help meet your goals. Action items could include:
To complete this process, you need to set your tasks within a schedule and assign individuals or teams to complete them. With a clearly detailed plan of action, the supporting individuals and teams will know what they have to do and when. This plan of action will ensure your ERP strategy isn’t created and forgotten, but instead continues to move forward.
Having a strategy and plan in place is essential. To stay on track, you’ll need to continually review your progress while keeping an eye on current market conditions. As plans lag behind or issues arise, you can catch them early and course correct so your plan continues to remain relevant and supportive of the business.
If you regularly encounter problems implementing your strategy or keeping it aligned with business goals, consider enlisting the help of your partners. Managed service providers, ERP system partners, and other companies with experience in your industry can fill in the gaps when your internal team is backlogged. Bringing support in early will help keep your strategy – and your ERP system – on track to further your business goals.