Insight on ERP

Posted on 2 Sep 2010 by The Manufacturer

In the last of our three part series on the buzz words currently surrounding ERP we cover social media and mobile internet; business continuity and confidence; upgrade issues; and flexibility and forecasting.

Social media and mobile internet: Among the latest technology advances for IT in business are developments in the integration of social media type interfaces and the mobile internet. This emerging disruptive technology for business is revolutionising the way key information is accessed, shared and utilised within and between enterprises. The trend has been driven by the rapid evolution of companies like Google and Facebook as well as products like the iPhone. While special platform and protocols have to be considered for the exploitation of this consumer technology in the business world, the potential it could bring for agile operations and innovative customer service should not be underestimated.

Important points to consider around social media and mobile internet technologies are:

• The acknowledged trend in manufacturing that innovation around service and customer contact will increasingly become a key competitive differentiator. These technologies have great potential in supporting excellence in these areas

• A window of opportunity. Being the first to adopt new technologies can maximise its impact and give you a lead on more cautious competitors.

• Be sure you have analysed the risk! Being at the bleeding edge of technology is inherently dangerous and you will be vulnerable to unforeseen infrastructure and security issues to name just a couple. Make sure you are confident that the potential benefits outweigh the financial and operational hazards.

Business continuity and confidence: While ERP technology promises to empower business transformations, problems after go live can be extremely disruptive and potentially cause serious damage to sales, brand value, productivity and more. To combat this risk it is important to have a sound and realistic business continuity architecture.
Some important points to consider around business continuity in ERP implementations are:

• The establishment of maximum disruption periods. These should be agreed with key department and functional stakeholders

• When developing a business continuity plan take care to investigate the interdependencies within your systems and business functions. Increasing business complexity and intricate internal and external interfaces can make it difficult to form a rigorous business continuity plan

• Test the continuity plan. Rigorous, iterative testing is rarely undertaken in a structured way. You should have an ongoing plan to test your business continuity capabilities on a regular basis and using a variety of test scripts

Upgrade issues: The rate technology evolution continues to hold true to Moores law, if not to exceed it and, in addition, business strategy alters according to market fluctuations, economic and social forces. This being the case it is more than likely that a company will need to upgrade or alter their ERP system. However companies should be careful that they chose application upgrades carefully and do not underestimate the potential difficulties as new installs.

Important points to consider around ERP upgrades are:

• Be wary of very new application releases as they can be prone to problems. It is better to wait until the whole ‘software patch’ is developed in order to be more confident that bugs have been eliminated and that the installation will not require rework

• It is easy to underestimate the effort needed to retrofit application modifications you made first time. Your upgraded application may not support the same customisations and beware the impact of changes the vendor may have made to the ERP database and related software

• Consider the possible cost implication of changes to maintenance fees, licenses and support as well as the new software itself

• Be sure that the upgrades you are making have relevance to overall business objectives and support ongoing company strategy. Do not rely solely on feature comparison software or advice from vendors to tell you an upgrade will bring benefits. Ask to experience ‘a day in the life’ of the new application to see if it suits your unique business needs.

• Be rigorous in applying the same level of planning, cost monitoring, training and continuity management that you would for a new installation

• Be aware of the complexity of ERP systems and the consequent complexity of upgrades. Unlike upgrades to other IT enablers, ERP systems are intricate systems that touch the whole enterprise. A change in one area can have knock-on effects.

Flexibility and Forecasting: To prolong the lifespan of your initial ERP implementation, allow greater ease in meeting the above upgrade challenges and to ensure an ongoing return on your ERP investment it is important to look for flexibility in your ERP solution. Agility and flexibility in your ERP system can also be enhanced by the use of intelligent forecasting methodologies.

Some important points to consider around ERP flexibility and forecasting are:

• Look for ERP systems which allow you to incrementally alter your ERP processes without the need for re-programming. Look for visual management interfaces that are user friendly

• Ensure the training you undertake during implementation provides strong in house knowledge about how to make and maintain these changes

• Plan ahead for times when changes in financial and business regulations are due to change an anticipate whether you will be able to make the necessary changes to your IT processes

• Use scenario planning to forecast divergent business strategy options

• Look for the ability to support developing forecasting techniques and advances in sales and operations planning.
The ability of you system to capture data from disparate applications and present it in a way that allows rational action is critical. This is advancing to include data gathering from external applications at collaborative companies as well as information emerging from social media forums.

Click here for part 1, featuring
Click here for part 2, featuring