ERP – better, faster, cheaper

Posted on 6 Feb 2012 by The Manufacturer

Undeniably, implementing an ERP system is a simpler affair than it used to be. A decade back, for instance, analyst firm Meta Group calculated that the average ERP implementation took 23 months, cost $15 million, and had a negative ROI. Those days, thankfully, are gone.

But even so, implementing ERP is no sinecure. Done properly, it takes time and effort, requires careful preparation, and isn’t cheap. That said, the risks of failure have never been lower, and today’s modern systems are infinitely more configurable than their predecessors.

Look closely at a typical modern-day ERP implementation, though, and you’ll still see companies going through the time-worn steps of mapping their business processes, looking for inefficiencies, and designing new and more efficient business processes, around which the forthcoming ERP system would be built.

The trouble is, it’s a lengthy job. The value chain has to be understood and described, and the ‘as is’ business processes within it have to be captured, agreed and documented. Then, best practices have to be identified, and built into the new ‘to be’ processes on which the ERP system will run. And finally the user procedures to support these processes have to be developed, tested and documented.

“It can take months, and involve a business’s best people spending a lot of time locked in ‘war rooms’ imagining the future,” says David McKenna, a manufacturing consultant at Microsoft Dynamics AX implementation specialist Columbus. “Not surprisingly, a lot of people have been asking: ‘Is there a better way?’”

And the answer, in short, is yes. And it’s a way that is increasingly finding favour with both customers and within the broader ERP community.

Look at the typical industrial manufacturing company, says McKenna, and you’ll usually find around 250 or so separate business processes in action — order quotation, product design and development, purchase order quotation, manufacturing, and so on. Strip out product development and design processes, and look just at the core commercial processes embraced by ERP systems, and that number drops to 200 or so.

Many of which, it must be said, are very similar from business to business. So why not model them in advance, incorporating known best practice drawn from as wide a group of best practice ‘role model’ businesses as possible?

That way, enthuses McKenna, not only is there less need to spend time mapping existing processes, the replacement processes are known to be best-in-class right from the start — saving even more time. Throw in the fact that with pre-built processes, the associated user procedures can also be drawn up and documented in advance, and the savings in time begin to add up.

And time, stresses McKenna, is money. Whether it’s the elapsed time that an ERP project takes, the consulting days involved, or the proportion of a manufacturer’s employees that are drawn into an ERP project, the benefits of a streamlined project built around best practices flow straight to the bottom line.

RapidValue, as Columbus is calling its new, best practice-based approach to Business Process Modelling within an implementation, makes it easy for customers to capture these benefits, says McKenna. Everything that’s required, he says, is built into Dynamics AX, right down to the procedures, screens and transactions that are involved.

And the commitment required has been substantial, drawing on Columbus’ 6000-implementation track record, and the deep bench of expertise it possesses in the more than a thousand employees that it has working out of 41 offices in 21 countries. RapidValue, in short, has involved capturing years of industry know-how, which has then been combined with months of careful process mapping and modelling to ensure that customers are getting a solution that fits their needs and meets industry standards.

“We anticipate that it’s typically going to save 20%-30% in consulting days, and a similar reduction in the amount of related customer input,” he says. “As a result, implementation elapsed time should drop by around 30% — from a year, in other words, to around eight or nine months.”

That said, he stresses, RapidValue doesn’t shoehorn manufacturers into processes that aren’t right for them. It’s a best practice template, in other words, not a straitjacket.

“The principle is to take best practices from the industry, and build these into Dynamics AX so that we can deliver a pre configured solution straight from the box,” he emphasises. “But we understand that every business will have its own special way of working, so there will always be some customisation that is needed to ensure maximum efficiencies and performance.”

So far, RapidValue has been rolled out for manufacturers in the industrial equipment manufacturing sector. In other words, businesses primarily making to order. Other sectors will follow soon, says McKenna — and already, Columbus is finding that the high degree of commonality between processes is accelerating the time required to bring new sectors on board.

“The benefits are clear,” sums up McKenna. “Because we have put in a lot of the work upfront, developing RapidValue, the customer receives a truly end to end industry specific solution. And because that solution already contains pre configured settings, together with recommended business processes and implementation documentation, it means that the implementation will be faster and smoother, and the sought-for return on investment will be reached in a shorter time.”