ERP 2.0: A New Round of Large-Scale, IT-Enabled Programs

    Whether your organization is only just embarking on the road to ERP adoption, or is trying to get the most value from your current system, the following article gives some very practical take-aways. Take a look, and if you have any questions about EDI integration to ERP software best practices, email or call us—we'd be happy to help.

    Enterprise resource planning (ERP) softwareDiCentral ERP is a reality for most large organizations. Some two-thirds of the Global 2000 use ERP software from one or more of the leading vendors (SAP, Oracle, Microsoft, etc.), directly touching more than one billion of their employees, suppliers and customers.

    Large-scale ERP has made a very noticeable comeback—a Release 2.0 of sorts—with a significant number of major organizations (armed with program budgets in the hundreds of millions of dollars) once again revisiting ERP.

    To be successful in this new round of large-scale ERP programs, organizations need to adopt a very different approach—one built around three key principles:

    • Adopt a far more sophisticated view of value—where it resides, how it’s created and how to untrap it.

    • Recognize that speed for its own sake is futile—more important is focusing on achieving the organization’s right pace.

    • Take a different view on managing risk—focusing on how best to increase the certainty of outcomes and not merely aim to reduce their uncertainty.

    Ultimately, the value from ERP comes from how well it achieves a particular end-to-end business outcome. And from an outcome perspective, value is driven by a combination of four basic levers:

    • Automation: the elimination of manual tasks.

    • Simplification: the elimination of non-value-added steps.

    • Standardization: a decrease in variability.

    • Innovation: the creation of an entirely new way of doing things.

    The key to unlocking ERP’s wide-scale, systemic value is to find a way to tie these levers to the underlying process flows, procedures and individual transactions. Process owners and their teams are charged with continuously identifying and delivering measured improvements in outcomes, with technology as a constant enabler.

    One of the key reasons ERP programs get into trouble is that the organization tries to pick up speed and implement too quickly. Organizations that establish the right pace get to their destination far sooner than those that don’t—and typically arrive in one piece.

    Traditionally, large-scale ERP programs have been pretty good at managing risk. They can accurately pinpoint the exact moment at which the assigned owner failed to take the required action that would have prevented things going horribly wrong—once it already has!

    From day one, companies need to embrace an approach to mistake-proofing and guardrailing program outcomes, and ingrain the approach into all aspects. When they combine this approach with the more traditional, inspection-based risk management, they can significantly deliver on increased certainty.

    Whether yours is an organization that’s contemplating a large-scale, ERP-enabled initiative, has completed one or is still somewhere midflight—it’s likely that it is among the 85 percent of organizations that significantly increase investment in ERP through 2020.

    It is equally likely that you continue to ask questions, such as:

    • Why is it so hard to get a simple report?

    • Why is it so difficult to add a new product or change pricing?

    • Why is it so difficult to know how much inventory we actually have on hand?

    Until organizations that have embraced ERP can stop asking such questions, the second round of ERP is going to continue—and value, pace and certainty are going to remain tantamount to success.

    This article excerpt, by Brian Dunn, originally appeared here:

    -Daniel Ford, DiCentral