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How Do you Know, Your Company is ready for an ERP?

Many Companies think that they need to get an ERP at a point where they go past a certain Turnover/Profit. But are they actually ready? what points to they need to consider? ERP are standards and many Company practises are not always standards, what happens when the Standard practices clashes with the Company Practise

Answers

Topic Expert
Scott MacDonald
Title: President/Owner
Company: AlphaMac Resources, Inc.
(President/Owner, AlphaMac Resources, Inc.) |

First, the term ERP is fast losing its meaning. It used to be that the big database companies were the only games in town.. With advances in technology, the midsize software packages are starting to approach what is available in what we still call ERP systems.

Cost is a big consideration on the larger systems so a cost/benefit analysis is key to determining whether you want to go to an ERP such as Oracle. Additionally, if you have existing systems that you are using, how easy will the migration be and how compatible are they with the underlying database such as Oracle.

Your industry is also important, there are some ERP systems that work better for manufacturing as opposed to financial services for example.

This undertaking is a big project. I hope you have someone who can basically spend full time doing the evaluation of your needs and finding the companies to send RFPs to. And that is just the beginning.

Good luck!

Topic Expert
Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Anon
Your own questions "But are they actually ready? what points to they need to consider?" point to the issue.

In my view, the company should decide to examine its Business Strategy and ask if it has a Technology Strategy that supports it. By looking at its existing technology strategy (if one exists, even if informal) and its current systems infrastructure (no matter how informal/small), it should become evident what gaps exist and where.

If the technology gaps are the root cause of many current business problems/pains (e.g. work is manual because systems are not integrated or because systems lack needed functionality, business model is changing, customers are demanding more, owners lack visibility into performance, etc.), then before you decide to buy any software, plan your technology strategy first.

ERP or any other software should only be considered if your tech strategy points to that need.

For some examples on this look at slides 11-15 in this Proformative webinar (see URL below) and feel free to contact me or Wayne Spivak if you have any questions:

https://www.proformative.com/sites/proformative.com/files/nuts-bolts-approach-selecting-righttechslides.pdf

Regards
Len

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Good answer Len.

ERP, CRM, MNOP or what ever the next iteration of acronyms get developed, it comes down to this: is your accounting system(S), that's all your systems supporting the company and helping drive the growth.

So, before you do a cost/benefit analysis, you need to do a comprehensive business strategy plan followed by a GAP analysis.

This way you'll know where you think you want to go, where you are compared to that forecast and what steps you'll need to take to get there.

The answers don't always lead to new technology, but I can tell you that the answers will lead to more questions.

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