Clients typically set goals; however, goals without an understanding of where you stand is non-value added. Although it is common to set goals and expect employees to achieve them, it is far less common for clients to understand how they will get from the current state to the desired future state. You must start by understanding where you stand in your supply chain. Unfortunately, although this sounds obvious (and Executives would agree), in reality, it is uncommon common sense!

How comfortable are you that you understand where you stand when it comes to your supply chain? We thought it would be of value to create a quick (2 minute) supply chain assessment quiz so that you can self-assess your supply chain. Learn more about the quiz here.

Client Example: Supply Chain Assessment for Service Turnaround

Our first step of any project is to perform a rapid supply chain assessment. For LMA to help a client, we must know the current situation. We do a review of people, processes, systems (ERP and peripheral systems such as CRM, CPQ, etc.), data, alignment with strategy, etc. Since we are focused on bottom line results, we must determine how to get from “here” to “there” on the quickest and smartest path while ensuring quick wins and value along the way.

For example, an aerospace manufacturer wanted to improve delivery performance to support key customer programs (Boeing, Gulfstream, etc.). In essence, they wanted to dramatically increase OTIF (on-time-in-full) from the mid 60%’s rapidly and reduce lead times to a more acceptable and attractive level for customers while maintaining or improving costs and working capital levels. The executives brought us in as supply chain consultants to upgrade their systems, processes, and talent to achieve these goals.

Our first priority was to perform a supply chain assessment. We reviewed their end-to-end order flow process, use of ERP, data, and skills/ talent. This provided us with a good understanding of their strengths, weaknesses, opportunities, and risks of execution so that we could put together a roadmap for success.

We stuck around and partnered with our client to roll out demand planning, master scheduling, capacity planning, and SIOP (Sales Inventory Operations Planning), also known as S&OP programs. Based on the assessment, we knew we could better utilize their ERP system and upgrade processes by entering forecasts, analyzing capacity plans and establishing supplier contracts with attractive pricing and stability. Additionally, we identified training and education opportunities and risks of execution so that we could mitigate potential bottlenecks. We brought service levels into the 90%’s, gained key customer confidence with improved scorecard performance, and improved margins by several points by rolling out materials forecasts, supplier contracts, and by gaining long-term visibility into operational capacity to minimize costs.

Client Example: Supply Chain Assessment to Turnaround an ERP Debacle

In an electrical equipment manufacturer, customers were upset due to lagging service levels and key employees were overwhelmed with an insurmountable workload following the launch of a new ERP system. After jumping into the details to work with their North American planners to unbury the schedule and to develop directional capacity information, we performed a supply chain assessment with an eye to use of ERP. There was no way to find a grain of sand in the ocean of details without assessing their supply chain and use of ERP.

Although we have a combined 99+ years of experience, 112+ successful client engagements with bottom line business results, 42+ ERP projects, and specialized manufacturing experience, jumping into the process and working with the key resources to turn around the execution didn’t provide enough information to put together a long-term path forward that would achieve the radical improvement required with the ERP system. Thus, an assessment was required with the full scope of ERP as it relates to supply chain and order creation and fulfillment.

We spent five weeks in an around-the-clock focused effort as the situation was urgent to gain a thorough perspective of the business processes, use of ERP and associated skills. After all, our team had to absorb what the ERP implementation team took a year to develop and roll out while understanding the impacts on the supply chain teams (demand planning, production planning, materials planning, capacity planning, etc.) and the correlation to the business bottlenecks. We reviewed business requirements, ERP functionality, offline spreadsheet processes, the status of data integrity, data availability, the status of training and development, availability of key resources, etc. Although it was a hair-raising process, we were successful in putting together an assessment, resource recommendations, quick wins and long-term solution to rectify the use of the ERP system to drive the business results.

The Bottom Line

Take a step back and assess what is needed to achieve your objectives. Don’t “stay in your lane” if you require a broader scope to ensure results even if you must have uncomfortable conversations and take risks in pushing back on standard assumptions. On the other hand, don’t fall into analysis paralysis. When you have a directional view that is assured to get you moving in the “right” direction (even if not 100% optimal), start moving. Avoid circular discussions and pivot back to the key points.

Also consider the people, the process, the system, the data, metrics and strategy in conjunction with each other. Focusing on technical without the process and people will not work, but focusing on the people without a good understanding of the technical and process aspects will not work either. In fact, you will come to inaccurate conclusions in your assessment that will make the situation worse, not better. Instead, use uncommon common sense, and you success rate will skyrocket.

If you are interested in reading more on this topic:
Why Planning is Impacted as Disruptions Abound

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Only companies that automate, digitize, and utilize modern ERP systems and advanced technologies will survive, let alone thrive during the next decade. There is no doubt that volatility, uncertainty, complexity, and ambiguity (VUCA) have increased in importance since the pandemic, and even though progress has occurred, there is no end in sight. Navigating these turbulent times while providing superior customer service and delivering profitable growth requires different ways of thinking and doing business. Advanced technologies are no longer nice-to-have; they are cornerstone to success.

In the current business environment, executives must find ways to do more with less so that they can expand their business with fewer resources. Automation, robotics, the better use of ERP, digital twins, artificial intelligence, data analysis and predictive analytics are simply required to meet customer demands with limited resources as baby boomers retire and high-skilled talent is in scarce supply. Advanced technologies enable a more consistent quality with a quicker turnaround and tailored to the customers’ needs.

Although it is always better to evaluate ERP systems and related technologies to ensure the best fit to business requirements, it has become an imperative during these volatile and turbulent times. Cash is limited due to rising interest rates, increasing input costs, and greater investment needs required to support changing business conditions. Thus, wasted time and effort as well as unhappy customers and potential lost revenue and profitability is unacceptable. To ensure scalable growth, manufacturers must evaluate ERP systems and related technologies to protect their cash flow and ensure a robust return on investment.

No matter the system, start with your business requirements. Look beyond bells and whistles and technology salespeople to your business needs. Prioritize the functionality that will support your unique differentiators in the marketplace, your profit drivers, and what’s unique about your industry, product, or service model. In addition to focusing on these requirements, document your full requirements to keep your potential software partners in check. Put together a standard assessment process and expand upon these basic requirements with demonstrations, deep dive discussions, and proof of concepts for your critical success factors.

Review apples-to-apples pricing as every supplier will provide complex pricing that will lead you to the wrong decisions if not standardized across a three-, five- and ten-year time horizon. Finally, keep top of mind that evaluating the software partner is the 80/20 of success. Since ERP implementations fail to deliver expected results 80% of the time, you must ensure you are part of the 20%.

For example, a consumer products manufacturer wanted to evaluate ERP and related technologies to include WMS (warehouse management), e-commerce, CRM, and business intelligence systems to best support their future customer and business requirements. Flexibility, value-added ordering functionality and customer personalization were of critical importance to growing the business while automation, data analysis, and advanced warehousing functionality were important to the customer experience and profitability. We developed requirements and kept the process on track to ensure customizability, value-add features, and scalability while comparing pricing and partners.

Smart manufacturers will pursue ERP and related technology upgrades to prepare for growth. Forward-thinking manufacturers will dedicate the appropriate time and resources to ensure success. Since it will have a significant impact on customers, profitability, and scalability, pursuing an ERP evaluation will be your most important strategy to protect your business. At a minimum, mitigate your customer and financial risk. At a maximum, leverage your ERP system and related technologies to take your business to a new level of performance.

Originally published in Brushware, November/December 2023

The post How to Evaluate ERP Systems & Related Technologies appeared first on LMA-Consulting Group, a supply chain consulting firm.

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CLAREMONT, CALIFORNIA – September 29, 2023 –  Manufacturing and Supply Chain Consultant Lisa Anderson, MBA, CSCP, CLTD, known as the Strongest Link in Your Supply Chain® and President of LMA Consulting Group Inc.,  underscores the pivotal role of Enterprise Resource Planning (ERP) systems in modern business strategy. LMA Consulting Group specializes in supporting manufacturers and distributors in strategic planning and comprehensive supply chain transformations, focusing on enhancing the customer experience and facilitating robust business growth.

In a rapidly evolving digital age, the emphasis on ERP systems has never been more pronounced. More than just supportive tools, these systems are integral for sustaining profitability and addressing evolving customer needs. “Modern ERP systems are no longer just about transactional processes. They are now pivotal in meeting customer requirements, supporting automation and integrating other essential technologies like AI, IoT, CRM and e-commerce. The real question today is not just about possessing an ERP system but ensuring it aligns seamlessly with business aspirations and customer expectations,” stated Ms. Anderson.

Given the hefty investment ERP systems often represent, their implementation requires meticulous planning and strategic alignment. “A roadmap is essential for achieving desired outcomes. I’ve seen instances where the urgency led to ERP implementation without data migration causing elongated post-implementation recovery phases, resulting in lost customers and revenue,” she added.

A strategic evaluation, coupled with a thorough ERP assessment, can guide businesses in identifying core business requirements, discerning profit-driving factors and ensuring that their ERP system aligns with their overarching goals. With the complexities of ERP solutions, where each provider is touting unique features, seeking external expertise provides an unbiased perspective, allowing businesses to navigate the complexities with clarity and confidence. 

For deeper insights into navigating the complex landscape of ERP and global supply chains, download Ms. Anderson’s special report The Road Ahead: Business, Supply Chain & The World Order. Additionally, her resource SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth offers invaluable strategies for organizations. Download it at LMA website,  Amazon and Apple.

About LMA Consulting Group – Lisa Anderson, MBA, CSCP, CLTD

Lisa Anderson is the founder and president of LMA Consulting Group, Inc., specializing in manufacturing strategy and end-to-end supply chain transformation.  Ms. Anderson is a recognized Supply Chain thought leader by SelectHub, named a Top 40 B2B Tech Influencer by arketi group, a Top 16 ERP Expert to Follow by Washington-Frank, in the Top 10 Women in Supply Chain by Warner PR, in the top 55 Supply Chain & Logistics Experts by flexport, and a woman leader in Supply Chain by RateLinx. She has been interviewed by Fox News and published the ebook, Future-Proofing Manufacturing & the Supply Chain Post COVID-19, Her primer, I’ve Been Thinking, provides strategies for creating bold customer promises and profits. An expert on the SIOP process (Sales, Inventory Operations Planning), advancing innovation, and making the supply chain resilient, Ms. Anderson is regularly interviewed and quoted by publications such as Industry Week, Bloomberg, and The Wall Street Journal. For information, sign up for her Profit Through People® Newsletter or for a copy of her book, visit LMA-ConsultingGroup.com.                 

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Why Modernize Your ERP System?

There might not be a need. Since it is one of the largest expenses your company will undertake, and, more importantly, it will impact customer performance and profitability (positively or negatively), there is no reason to jump into the deep end of the pool before understanding the value to your growth and success. Upgrading your ERP system is not for the faint of heart as it will consume resources (financial and people), and 80% of ERP upgrades fail to achieve the intended results. Thus, you must ensure you will be part of the 20%!

With that said, if you do not have a modern ERP system, you will constantly struggle to meet customer expectations, grow profitability, and achieve cash flow goals. Our clients with old systems try to incorporate add-on software, but it becomes a house of cards. Orders slip through the cracks. Duplicate transactions confuse and annoy employees. Archaic screens discourage teams. Key business nuances cannot be incorporated into the system. And down-the-line impacts are lost.

Additionally, archaic systems typically cannot support modern customer expectations (e-commerce, CRM, business intelligence, AI, etc.), and so clients create work arounds to try to meet the needs. Soon, there are elaborate subsystems required to support the business, and the solutions are not scalable.

Although in every client situation we found opportunities to better utilize the system, the effort required to limp along with an old ERP system and avoid the upgrade will not be worth the value over the medium to long-term. Instead, focus attention on when to upgrade and plan your upgrade to ensure success.

Why ERP Upgrades Fail

Most ERP upgrade projects fail. The most frequent reason cited is lack of training; however, we find that is RARELY the cause. The root cause is that the people do not know how to use the system to perform the business processes required to achieve the day-to-day business objectives For example, the ERP team might have provided training on how the system plans production; however, the planner does not know how to use the system to get production schedules for what he/she knows is required to meet the #1 customer’s needs and/or how to get the schedule to show the correct number of pieces per day (instead of showing an unrealistic output that would require double the resources he/she knows is available).

Unfortunately, the ERP team typically says, “Use the best practice process. You are being resistant to change.” And the planner says, “The ERP system is not working, but provides no details as to what is wrong.”. Neither side is happy with the other, and the planner puts together a work around, and the ERP team requests a change consultant. It is no wonder 80% of implementations fail.

What can you do to turn failure on its head?

The good news is that it is not difficult to know what to do to succeed with ERP upgrades. The bad news is that companies don’t want to accept what needs to be done to succeed. The critical priorities are as follows:

• ERP Software Selection: Focus upfront to make sure you select the best-fit system for your business requirements. For example, if your business requirements dictate a job shop software, your options will be limited. If you need a configurator or service module, your options will be further limited for the best software to support your needs. Focus on business requirements, and especially those requirements that differentiate the company in the marketplace or those that are unique to your industry. Our clients have found that the best way to be software agnostic and not get sucked into a slick sales presentation is to bring on neutral experts to focus on requirements, fit, and facts, and they arm the team with pitfalls to avoid.
• ERP Selection example: For example, a manufacturing client was hesitant to spend the money on consultants to perform an ERP selection. Their CPA convinced them to give it a go. After working with them for several months, we agreed on the best fit software and partner; however, the client decided to postpone the ERP upgrade for a few years. The CPA provided feedback that even though they didn’t follow the recommendations, the client felt like the process itself was well worth the investment because they understood what was needed to be successful and could prepare to ensure success. Fast-forward a few years, and they did just that. We went through a new selection process as requirements change, ERP software capabilities change, ERP positioning changes, and suppliers areas of focus and expertise change. We selected a new best fit software and partner, and they were prepared for the ERP journey.
• ERP Supplier selection: Just as important as the system is the selection of your implementation partner. Plans rarely fail in formulation. They fail in execution. This means that the partner you choose has to fill in gaps of your weaknesses, supplement your strengths, and align with your path forward (agile vs process-oriented, focused on quick wins or looking at the long term, knows how to work with small and medium size company resources or is focused on larger company issues, focused on saving money or return on investment). In the ERP software selection example, the supplier of choice from the first selection process evolved with changing market conditions and no longer focused on medium size clients in their sweet spot. Thus, a different partner made more sense.
• ERP Team: As difficult as it is, you need to put your best and brightest on your ERP team. This team will be designing processes, working through roadblocks, driving change, providing training, listening to feedback, and will drive your success or failure. You will have to invest in people, ensure career paths for top talent, and provide tools, support and supplemental resources to ensure success.
• Project Management: The fundamentals or project management and change management are bedrock to ERP success. These are not rocket science yet essential to success.
• Business/ Systems Analysis: Beyond being proficient in project management, you will need business process and system analysis capabilities. You need to visualize down-the-line impacts, pivot as appropriate, know when to keep looking for ways to resolve issues and when to stop at success (and not pursue perfection). Incorporating cross-functional business process expertise is critical as the connections between processes and modules will make or break success. Unfortunately, ERP partners typically have experts in each module. This leaves a gap in cross-module processes. Supplement with these experts if you want to succeed.
• Pilot: Design a pilot to test the end-to-end life cycle of your processes. The most successful clients utilize an agile approach to pilot a segment of the business or a sub-process, incorporate changes and expand your pilot. This iterative approach will rapidly incorporate business feedback instead of waiting until the end to see if everything works as desired. By then, no one wants to be the one to postpone the go-live, and so critical updates will not be uncovered.
• Testing & Cutover: Each ERP supplier will have proven implementation processes. Unfortunately, methodologies are only as good as the people executing them. Don’t skimp where it counts. Resolve key issues before they impact customers and daily profitability. You’ll need strong organization and orchestration to coordinate successfully.
• Ongoing Support: Planning a week of go-live support will not cut it. If the supplier has one foot out the door because they have committed to another project so that they can fund operations, they will not be focused on what your team needs to succeed.

A Final Thought

Do not leave your ERP upgrade to your IT team, your CFO, or an ERP leader. It is a transformative process to build scalability and sustainability into your business processes. You will need a visionary. You will need leaders to drive change. Not change for the sake of change or to implement best practices. Instead, you will need to drive change and improvement to your business processes. It might make sense to bring on a business consultant to bridge the gap between process, ERP, and technical specs. Last but not least, execution, collaboration and partnership will be key to success.

If you are interested in discussing whether you need an ERP upgrade or you are interested in discussing an unbiased ERP selection, review our ERP resources and/or contact us to discuss your situation.

Did you like this article?  Continue reading on this topic:
Managing Increased Complexity with High OTIF & Efficiencies Using Technology

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Should You Upgrade Your Systems?

It depends. Being the first to upgrade for each new fad is a waste of resources for little, if any, benefit. On the other hand, if the upgrade supports your ability to serve customers and grow profitably, it will become a “must”.

Inaction Isn’t an Option: The Southwest Airlines Debacle

Let’s take the Southwest Airlines debacle as an example. Although there were some extenuating circumstances (weather events and an infrastructure that supports point-to-point flights), the crux of the problem was that their systems failed. Weather caused delays and cancellations. Next, because Southwest doesn’t use the hub and spoke system, they do not have resources gathered in hubs throughout the country. Thus, when a flight was cancelled, they didn’t have their equipment (planes) and resources (pilots, crews, etc.) in the “right” place at the “right” time to quickly pivot.

They could have moved resources to the correct places; however, their systems were not upgraded to handle these ever-changing conditions and so flights came to a screeching halt. Southwest had insurmountable challenges resulting in cancellations to OVER 90% of their flights and countless unhappy passengers. Clearly, in hindsight, a systems upgrade would have been worth it!

How to Know If You Should Upgrade Your ERP System

How do you know if you should upgrade your ERP system? Of course, there is not a magical answer; however, there are several questions to consider:

• Does your ERP system support your customer needs? Customer needs are constantly evolving. Do you have high levels of service? OTIF (on-time-in-full) or OTD (on-time-delivery). Can you quickly pivot to changing customer conditions? Are you aware of these changes? Can you provide the visibility customers need?
• Will your ERP system support your FUTURE customer needs? Too many clients are running on the hamster wheel to keep up with current conditions and don’t have time to look to the future. Focus on where your customers are going and whether your systems will support their future needs.
• Does your ERP system support process upgrades? For example, if you would like to have inventory in the “right” place at the “right” time to achieve high service levels yet you could reduce your inventory levels to free up cash flow, does your system support this type of upgrade?
• Will your system support automation and digitization? For example, could you collect information about your machines with IoT capabilities and feed back to your systems so that you can use AI (artificial intelligence) to predict your machinery needs instead of focusing on preventative maintenance? Or could you simply attach a robot or automate a mundane process?
• Will your system connect with customers & suppliers? Viewing just one link of a supply chain is useless. You are only as strong as your weakest link. For example, to provide visibility of order status, you should connect with your suppliers, your suppliers’ suppliers and so on.
• Does your ERP system support your data needs? The only route to success is to be able to collect and analyze data so that you can stay ahead of changing conditions to make directionally correct strategic decisions. Business intelligence, predictive analytics, what if scenarios and more.
• Is your ERP system a hodge-podge of functionality or will it work like a well-oiled machine? It is fine to have add-on software so long as it works seamless together and as issues occur, the parts work together to resolve rapidly without finger pointing and wasted time. If not, you need to upgrade your system.
• Will your system keep up with modern functionality needs? For example, if your system doesn’t have a strong CRM (customer relationship management) system, it is doubtful you will keep up with customer needs. Does it have a forecasting system, an e-commerce system, an MES (manufacturing execution) system, and a WMS system (warehousing management) that acts as part of your ERP system? These are often separate systems or modules but they must seamlessly integrate.

If Your Answer is Yes, Perform a Selection Process

Clients frequently call to ask for help in selecting an ERP system. Unfortunately, it is not for the faint of heart. If there is one thing that is a certainty, it is that ERP salespeople are sharks. Some are likeable, friendly sharks, but sharks nonetheless. They easily sell ice to an eskimo.

Review our ERP category on our blog for several articles on ERP selection, but a few of the key steps include:

• Assess business requirements: Determine what your system needs to do in detail to support your needs.
• Document business requirements: Although we’ve tried to find a way to minimize the workload associated with this step, it is vital to keeping the sharks at bay.
• Source potential ERP suppliers: Narrow the list to ones that support your type of business and customer needs effectively.
• Develop an RFP & Scoring Method: Even for small selection projects, it is good to document at least the key points to further narrow your list of potential ERP suppliers.
• Demo the software: It is important to visualize how you can use the software.
• Ask second-level questions &/or perform deep dive demos: The devil is in the details. The software can look amazing yet not support your business. It happens frequently. The key is in asking the underlying questions and seeing how the software handles your specific needs. Will it handle the 80/20 or only 70/30? It will make a huge difference to your success – and resources invested to achieve success.
• Pricing comparisons: There is no doubt that software suppliers must sit at a bar and find ways to make pricing apples to oranges so they are impossible to compare because after 100+ projects, there are still curve balls to work through every time. You must get it to “apples to apples” to understand if your likely investment and comparison.
• Partner comparisons: The 80/20 of success will be implementation (assuming you get a decent fit for functionality). This will boil down to your partner and the capabilities of the specific resources you will work with on the project. Even with the best of partners, you can go down the “wrong” path easily and waste countless hours before pivoting. In fact, it is only the better partners that will tell you when they discover it is the wrong path because they don’t want to tell you that time has been wasted. The better your partner, the better your success.
• Summary comparison of functionality, partner and implementation which results in a final selection.

If Your Answer is No, Don’t Do It!

It is often easier to blame process issues on the system. Or, it could be for a lack of knowledge of how to expand the use of your system. Refer to our recent article, The MacGyver Approach: Leveraging Your Under Utilized Asset to find ways to upgrade your results without upgrading your system. Or ask experts to evaluate your situation. Don’t pursue an upgrade if it isn’t needed! Upgrading your system unnecessarily could be the quickest route to insolvency or customer debacles.

If you are interested in discussing whether you need an ERP upgrade, review our ERP resources and/or contact us to discuss further.

Did you like this article?  Continue reading on this topic:
Managing Increased Complexity with High OTIF & Efficiencies Using Technology

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Whether you love them or hate them, ERP upgrades are a fact of life.

Nowadays, they are often the vehicle for a digital transformation that enables new lines of business, vastly improves the user experience and boosts efficiency. But when executed poorly, an ERP upgrade can threaten business continuity by disrupting your core business operations.

For these reasons and more, the ERP upgrade process calls for informed decision-making and a well-thought-out project plan.

Manufacturing and Supply Chain Expert, Lisa Anderson advises that you have to educate your users, which is different from training them.

Click here for the full story.

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As COVID continues to rage and some areas of the country are locked down, many businesses struggle. On the other hand, by all reports, many other businesses had their best year ever in 2020. What is clear across the board is that the pace of technological change has accelerated. Whether it is due to going virtual and other COVID impacts, trying to keep up with changing customer needs, being resilient to ever-changing conditions, and/or the desire to increase profitability, what was expected to be in place by 2025 is being put in place imminently. Are you prepared for this digital transformation?

Which Technologies are Relevant?

It absolutely depends on your industry, supply chain partners and your unique situation; however, there are lots of conversations, progress and focus on ERP, artificial intelligence/ machine learning, IoT, augmented reality, automation and robotics, autonomous vehicles, blockchain, cyber security, business intelligence, CRM, B2B/ B2C, demand and supply planning, WMS and many more topics. By all accounts, if you tried to pursue each of these objectives, you are likely to fail miserably. So, where do we start?

Start with Your Base

Just as you cannot worry about window dressings for a house with a shaky foundation, you cannot think about progressive technologies if you are built on a house of cards. Will your ERP system support advancement? Or, will you struggle with a hodgepodge of software that will not enable growth and profitability?

Although I am not a proponent of upgrading ERP without a substantial reason (after all, it is one of the most significant investments of time, money and resources you’ll ever make), you also cannot be left in the dust. More companies will pull away from the pack during these turbulent yet opportunistic times than in any other within the foreseeable future. Are you prepared for success? If not, you must start by upgrading to a modern ERP system. In today’s environment, there is no possibility for success without a solid, scalable ERP system that supports providing a superior customer experience, allows for both efficiency and resiliency, enables configuration to support differentiation while also supporting easy upgradability and facilitates the seamless integration with best in class technologies to support evolving business needs.

If you are interested in whether it is time to upgrade (or not) and how to select an ERP system AND partner, please refer to our blog for countless articles of value or contact us for assistance.

Did you like this article? Continue reading on this topic:
The Prominence of Manufacturing & Supply Chain Technology

The post Do You Have a Modern ERP System? appeared first on LMA-Consulting Group, a supply chain consulting firm.

Manufacturing and Supply Chain Expert, Lisa Anderson, MBA, CSCP, CLTD, president of LMA Consulting Group Inc. said, “Investing in implementing an ERP system is similar to investing in a critical piece of machinery to support sales growth and achieve a substantial return on investment. Typically, they require a significant upfront investment in software and implementation support to ensure success with the project; however, as one of the most significant business process upgrade projects any company will undertake, it becomes simply a prudent investment and mitigation of risk.”

Wading into the waters of ERP software for the first time can be tricky. However, it gets even more difficult when you realize you have to bring a team of blindfolded coworkers and managers along with you into its murky depths. ERP justification is key to removing the metaphorical blindfold and helping company stakeholders understand the potential benefits of an ERP system. This is typically done through a presentation to relevant parties who then approve (or disprove) of the proposed software solution.

In this article, we will discuss some of the key factors to address when justifying ERP to team members, how to improve the odds of positive ROI and some of the benefits a successful implementation can yield. By understanding some of the main factors needed to provide an effective ERP justification and contemplating some of the intricacies of the actual implementation, you can improve your odds of success.

Key Takeaways

• A successful ERP justification presentation contains recognition of the current business environment, documentation of challenges, clear end-goals, estimation of implementation costs and a potential ROI prediction.
• ERP implementation costs anywhere from $10,000 to more than $10 million.
• For every dollar spent on ERP, companies receive an average ROI of $7.23.
• The average time it takes for companies to start seeing benefits from an ERP system is about 14 months.

Full Story

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