Is your ERP fit for purpose?
ERP is now used as a transactional system of record and a strategic weapon
BRT Group, a supplier of automotive and industrial components, recently decided to implement an enterprise resource planning (ERP) system to "increase business efficiency and cut costs". Holiday park operator Darwin (North West) chose a specialist ERP package to "fully integrate all aspects of operations" and bring together finance and accounting, sales, marketing, reservations and park management.
The global non-for-profit Fairtrade International is replacing legacy systems and processes with a cloud-based ERP package, to "streamline employee management and self service processes", "better align supply and demand", and make reporting more "transparent and accurate".
These recent adopters tell you a lot about the evolution of ERP.
"It's not just about manufacturing any more,"' observes Cindy Jutras, principal analyst with Mint Jutras.
"Some ERPs don't even do manufacturing," she adds, and they aren't all on-premise installations or the preserve of large organisations any more, either.
"Lines around ERP have become difficult to draw," says Jutras, who defines ERP now as "an integrated set of modules that can be used to form the operational and transactional system for businesses", of many shapes and sizes.
"Small to mid-sized companies have learnt from the early adopters," Jutras adds, and they are now using ERP as their transactional system of record and as a strategic weapon.
At HB Human Capital (HBHC) taking the ERP route is all about growth. In the four years since Dragon's Den star James Caan established HBHC, it has become a global top 50 recruitment company by purchasing existing firms and backing entrepreneurs that want to start their own, and it wants to sustain this trajectory over the next four years.
"We plan to double our sales," Peter Milne, group financial controller, says. "That's why we decided to put a solid platform in place to help us on the journey". H
"This will help us to reduce the burden of back-office administration so we can focus on building great businesses," he says.
HBHC wanted "strong functionality around core accounts and consolidation, combined with web-based expense management", as this will eliminate the needless re-keying information and support the recruitment company's efforts to streamline its processes and the systems that support them.
"This will allow us to easily track and report on activity within the business, in real time, and for that information to be presented in a meaningful form," he adds.
For many organisations, the decision to install a new ERP is also about creating a business systems architecture that will be flexible enough to grow and change as the organisation does – without the involvement of expensive external ERP consultants.
This was a burden (for some) and a blessing (for others) with the first generation of ERP systems, but it is just as important today when so many organisations need to be agile and adaptable in order to survive.
The success of acquisitions, divestitures, mergers, restructuring, expanding lines of business, and changes to your business model can all be affected by the ERP system or systems in place, and how easily and cost-effectively they can be adjusted.
"The ability of ERP systems to handle this level of business change has been raised as one of the most important considerations when selecting systems," reports Pedrag Jakovljevic, principal analyst at Technology Research Centres (TEC).
In a recent research project by the International Technolog Alliance involving 307 senior business managers, 81 percent said being able to make changes more easily, cost effectively and with less disruption were 'very important' in their ERP selection criteria.
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