ERP ( Enterprise resource planning) is not just software for me. everyone hear a lot about ERP software but do you really understand what is ERP all about ?
ERP project is not as simple as installing a piece of software. So what else is involved ?
ERP Software is
33 % software
33% Implementation/training/ process
33% guidance
The software provides the basic foundation, it is basically the tool to get the information enter into the system. The best software system is the one that does what your company needs it to do.
Keep in mind that even the best system doesn’t work if you don’t set it up and use it properly. That’s why it is only 33% of the equation. Don’t get me wrong the software is important but not everything. it still depend how your company structure setup
Implementation/training/process
This portion is equation very important. How are you going to set-up, use and train on the system. A solid plan is needed here. Whether you use your vendor or your internal people, the person or people you lean on here should
- 1-Have a deep understanding of your business and the flow of information through it.
- 2-Understand the group of employees that will be interacting and using the system
- 3-Deliver training in the method that best suits the individuals users.
- 4-Understands the way the software works
Guidance
If you have never used or seen an ERP system and don’t have anyone internally who has, you will need to rely on your vendor here. Many organizations think they don’t need this but the reality is the project will cost less and take much less time with the proper guidance. There are many decisions to make when installing ERP, many forks in the road, choices are great but if you can’t visualize the outcome decisions become difficult.
Exposure to setting up and using systems here is critical. If you don’t have anyone internally to provide this for you make sure you do your homework with the vendor. Make sure the have the technical ability to understand your business and how information should flow.
ERP is not just software it is a combination of software, processes and procedures used to reduce waste, create efficiency and provide a platform for growth.
Conventional ERP Model
- High capital expenditure
- Direct & indirect investments
- Ballooning costs
- Long implementation time
- Rigid
- Limited access
- Upgrades at extra cost
- Limited licensing
Rental Model
- No capital expenditure
- No investments
- Low-cost subscription model
- Implement in weeks
- Scalable
- Access anytime, anywhere
- Free upgrades
- Flexible licensing
A Rental or Web-based ERP solution is managed and provided to organisations over the Internet, by a service provider or vendor, on a 'per month, per user' basis.
Here organisations are saved from a sizable upfront investment on the hardware and software installations normally required if an organisation opts for an outright purchase ERP solution (On Demand ERP). In this version, an organisation owns the ERP software and hardware infrastructure within its premises.
A rental or Web-based ERP solution proves very cost effective as an organisation pays just a per-user monthly rental, which is quite manageable.
Vivienna from erp2u.com
Here are a few tips by ERP gurus:
1. Create workable ERP implementation goals and plan. Be smart and create a process that has stages and involves all concerned at each stage. Test the ERP at every stage; this will smoothen out kinks when they are small.
2. The ERP implementation should be a hands on process for end users. Involve the employees who will handle ERP process in both planning and execution.
3. In case ERP is not in your skill set then get a ERP consult who will work hand in hand with your team. This will iron out the implementation process and give insights.
4. Give training in ERP importance. Include training costs in the ERP implementation budgets. A well trained team means a lot especially when the organization is new to ERP systems.
5. Tone down ERP ambitions to workable levels. Implement ERP in stages this will ensure returns on your investments. Teams often get carried away and push for going all the way in one go
6. If you are using a ASP for your hosting model then think about aspects like cookie cutter solutions and customization options.
7. Be smart and choose an ERP that is industry standards based.
8. Well before purchase find out about training and maintenance costs.
9. Look into aspects like expansion / upgrade possibilities.
10. Take a close look at your business processes and determine the changes you may need to implement to fit into the ERP software functions.
11. Before contracting with an ERP vendor do a market survey to determine vendor’s stability. Find out how long the vendor has been in the ERP business and his performance.
12. Ensure that the “return on investment” is in figures. Simulate the ERP suite and make calculations to verify figures. Never go buy promises that are not definite numbers.
13. Ask about customization assistance from the vendor. A good vendor must be willing to hold your hand through the ERP implementation process.
14. Get professional help in contract negotiations. Ensure that your interests are well protected.
15. Pay close attention to the ERP implementation, quality of data, workflow. Track the process during season and off season too.
For your understanding, ERP Software classified into three categories: Tier I, II and III.
Tier I
These are the most well known of the software packages such as SAP®, BAAN®, ORACLE®, and PeopleSoft®,...... These software packages handle everything from the banking industry to supermarkets.
Characteristics include:
Used by many Fortune 500 companies. Tier I vendors are starting to market to midsize manufacturers. In some cases, they sell software purchased from other vendors. Other vendors offer a subset of their own software under the assumption that smaller companies don’t need as much functionality.
Used by large international companies In a lot of cases a full time “team” is required on the part of the company implementing the software.Implementation teams are usually augmented with third party consultants
Usually priced by modules and by number of users
Tier II - this is where ICIM ERP fits
These vendors are a good fit for most small and midsize manufacturers. The software provided by these vendors offer rich functionality and run on a variety of technologies. Expect higher involvement from these vendors or their representatives in the implementation of the software. For companies with any type of complexity in manufacturing, sales or engineering processes; software packages in this Tier would be a good choice.
Characteristics include:
- Offer a high degree of functionality.
- May be targeted to a specific industry. Some software packages were first developed to support a specific industry. These work well in their particular industry but struggle when used outside that industry.
- The software is normally sold through a Value Added Reseller (VAR). The same VAR will offer implementation services as well (see note below).
- A significant amount of consolidation has taken place amongst Tier II vendors. It is not uncommon to see one vendor offer many different ERP packages.
- Usually priced by user
Tier III
These vendors offer what is often referred to as “canned” software. If across the board, standard business practices are used throughout the company or if all that is required is accounting and light inventory control, these packages will probably be a good fit.
Characteristics include:
- Easy to use screens.
- Installation CDs. Usually windows based.
- Self-taught tutorials are usually the extent of the training.
- Many times priced by module.
