When the Time Comes to Upgrade ERP – Five Key Signs

We of course are referring to Enterprise Resource Planning software, or ERP. For a manufacturing firm, it’s that big software application that plans production materials, takes customer orders, conducts purchasing, production planning, inventory control and much more. And let’s not forget the accounting underbelly.

A well-implemented modern ERP is a serious asset. Most notably represented by broad and effective support of business processes—which includes workflow continuity across the enterprise and excellent metrics. The results are lower costs to operate, less stress on the company team, and reduced barriers to react to industry opportunities and risks. And customers will notice with a smile.

However most companies are nowhere close to the ideal just described. The following are five key signs that there are likely large opportunities for ERP improvement at your company:

  1. Spreadsheets everywhere: The incredible spreadsheet is arguably the ultimate tool for flexible and easy managing data and calculations.  Notwithstanding this fantastic utility, such specific-purpose tools are rarely part of connected and aligned enterprise processes. And this is a problem.
  2. Expediting processes: Does it seem a lot of parts and materials are not available for production?  Are customer order promise dates continually at risk of slipping?  In reaction, your company team runs faster and longer in expediting material and production processes. And your company endures all the high costs and stress that result.
  3. Manual intervention: Does it seems many company processes need labor intensive direct oversight and double-checking? This manual intervention creates continual ad hoc interaction between company team members and it’s a disruptive way to operate. All of this is devastating to potential productivity.
  4. Don’t know how we’re doing: Have we been profitable on a particular product line? What is the true cost of expediting so many production parts?  How are inventory turns trending? What is the utilization of company production personnel?  Are we really making money? A well-implemented ERP drives all this information, real-time, to the team.
  5. Tribal knowledge:  When company teams suffer from the items listed above, they always depend on some group of key employees to keep things moving forward. Much of this inside, or tribal knowledge, is only held in the heads of specific employees. And if they were to disappear, without multi-month training to others, then it’s a big problem. And a big risk while it exists.

In addition to these five signs, there are larger indicators of an ERP opportunity—such as:  (1) persistent issues with profitability, stressed-out employees, customer issues, and increased strategic threats.

Follow this link for more information on establishing an Enterprise Software Strategy for your company.