The consolidation of Enterprise Resource Planning solution is one of the major issues faced by companies during the implementation process. This leads to complexities in the execution and is one of the most common challenges faced by both mid-sized and multinational companies today.
When companies are looking to integrate their disparate legacy systems into one seamless ERP system, the problem of ERP consolidation is bound to arise due to several reasons. The rise in corporate mergers and acquisitions is one of the common causes of this issue.
Intricacy in ERP environments can prevent firms from achieving their business growth objectives. A typical ERP environment usually includes data models, processes systems, governance structure and corporate policies, which must function concurrently across all the departments to avoid complexities. Large multinational companies thriving on regular acquisitions usually experience the complexity issue where they achieve negligible value addition from their ERP systems. The incompetence of the implementation effort across the departments can get aggravated if the companies are regularly acquiring new businesses. Such a large-scale ERP muddle can obstruct the core business functions like cross-enterprise communication and decision support system and even operational performance.
In order to solve the ERP complexity issues, business leaders must be willing to tackle a range of factors that can range from strategy renewal to operational overhauls. The most important of the steps is to create a well-aligned strategy that is agreed upon by all the stakeholders. Subsequently, they need to convert meaningful changes into reality. In doing this, the competence of decision makers can be thoroughly tested for which they need to have a deep understanding and profound knowledge of the ERP as a process.
Business leaders must realize that when solving the Enterprise Resource Planning convolution, they are not solely dealing with a technological issue as there are numerous other domains that go into making the system work efficiently. In order to address all the issues adequately, they should align their organization’s long-term technology and business strategies together. Some of the ideal steps that can solve their concerns are discussed below.
Many ERP implementations aren’t successful due to lack of preparation and not because of the software drawbacks. Decision makers must have a clear idea of what they wish to achieve with the ERP Solution. This can help in creating a profound roadmap, and the ERP can then be tailored to meet those exact needs. This usually requires setting up a team of members who are ably skilled in organizational communication and technical expertise. They would then be tasked with overseeing all minute to major selection and implementation procedures. This would ensure that all the objectives of ERP execution are met with due diligence and accuracy. The team could also prepare the staff to use and operate the new software.
Asking the ERP Vendor for at least 2-3 references to the organizations where they have successfully implemented their solution is important. Moreover, it is much better if the ERP vendor has the experience with at least two companies in the same business sector. The leadership must then take the initiative to contact these references to find out their experiences with the vendor and can also query about the performance of their ERP systems. This can help companies in deciding on the right vendor. In addition, they can also determine the ways to overcome the similar challenges they might face.
Appropriate Change Management
An organization’s culture is usually the common obstacle for progressive change. Companies must realize that change is inevitable; and in order to carry out the ERP implementation smoothly, they need to adhere to a cohesive change management. This involves keeping the employees acquainted with the new changes. Also, the leadership should let the staff know what they can expect from the advanced new software, being implemented. Holding workshops and training sessions to educate the staff sufficiently is a crucial part of change management. This step must be performed before the ERP system comes into effect. By sharing the benefits and advantages of the new system with the employees, managers, and organization, leaders can prepare them for the new changes that will impact their core responsibilities and performance.
Data is the vital aspect of any system and is as crucial to ensure the success of the ERP system. This is because the accuracy of the system is totally dependent on the accuracy of the data, and any errors in it can render the whole exercise meaningless. This is the reason, the action plan must lay due impetus on procedures such as programming, data migration, etc. By laying the accurate procedural boundaries and maintaining the best programming standards, the accuracy of the data can be ensured.
The stakeholder and leaders must constantly engage with the development team right from the outset. This will help the development team in keeping abreast with any kind of functional changes decided by the leaders. Constant communication will also keep the team involved with the latest happenings regarding the structural changes to the system. On the other hand, the stakeholders can also get the up-to-date information on the development front and have an accurate idea of the progress being made by the IT team. Regular communication also ensures a smooth transition in the end, and can help all the parties involved to eradicate various types of problems in their nascent stage itself.
Marked increase in productivity, reduced costs and a boost in sales and revenue are some of the ideal benefits of choosing to invest in an ERP system. However, to ensure that the implementation is performed in the right way, organizations must spend considerable time and resources on choosing the right solution. By putting the right measures in place, they can ensure the system performs at maximum efficiency and also delivers maximum returns.
- The rise in corporate mergers and acquisitions is one of the common causes for complexities in Enterprise Resource Planning implementation.
- Execution of ERP solution is usually not successful due to lack of preparation and not because of the software drawbacks.
- Stringent steps must be followed by organizations before deciding upon their ERP vendor.
- An organization’s culture is usually the common obstacle for progressive change, which can be resolved through comprehensive change management.