Enterprise Resource Planning (ERP) systems is an enterprise-wide data and business process management system that integrates a comprehensive suite of business applications that previously where implemented in separate, stand-alone systems. As separate systems, there was often a wide variety of redundant data in each system, for example customer lists, and keeping these redundant data sets synchronized was often a challenging and costly task.
The Obvious Next Step
Enterprise level integration is the obvious next step to improve the quality of this data by ensuring its accuracy and hence usefulness in every aspect of the busienss. Integration of data sets also enables the improvement of many of the basic business management processes while also enabling many new applications that previously would most often have between cumbersome and hence too costly.
Basic functions integrated into today's typical ERP systems include, but are not limited to, the following:
- Product planning, cost and development
- Manufacturing or service delivery
- Marketing and sales
- Inventory management
- Shipping and payment
- Human resources management
The Major Challenge
The major challenge in implementing an ERP system, especially for an existing firm, is the classic Change Management problem that over-rides most every growth step in any company. In this case, the central change management problem is getting all persons in the corporation working in a fully collaborative way which in some ways will necessarily be at the expense of their own department or specific business processes that they had previously been attached to.
For example, the previous role of inside sales clerk may have only needed customer information such as company name, PO number, product item codes, as well as billing, and shipping address. To enhance the marketing as well as quality assurance functions, we can add the requirement for contact information about the final expected user at the buying organization. A small extra work item for the sales clerk, but this info can greatly enhance the marketing departments understanding through a very direct follow-up query of how the product is used, which features are best appreciated, and sometimes even what related products might they also need that the selling company could provide in a subsequent sale. Quality Assurance can also use this info for a latter follow-up query to better understand how the product is performing over the expected life of the product and this might lead to product design improvements that may be appreciated by the entire target market and hence also increasing future sales.
Without this kind of follow-up review in todays' world, products may earn their keep for a while but sooner or later any remaining outstanding needs will surface. In the worst case may be realized and implemented by your competitor - giving them a new advantage that may be detrimental to your business.
A Must-Have? Too Often.
Having an integrated view of all subsystems, of all data and business processes across your business enterprise, is quickly becoming a de-facto standard. Our experience suggests that even new startups are highly likely to benefit for implementing ERP system from the get-go. And since many ERP cloud service implementations are offering much reduced price points compared to only a few years ago, the benefits to any company of any size suggest that these systems will become an increasing Must-Have for survival in the very near future.
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