Twenty years ago, the concept of having one unified system to track, manage and facilitate business operations across departments seemed revolutionary. After all, at the time, functional areas such as sales, procurement, human resources and, of course, finance regularly operated in silos and relied on spreadsheets for compiling and sharing data. Even more "advanced" companies--those that had invested heavily in technology and software--found themselves with disparate systems across departments, making collaboration and data sharing nearly impossible.
Eventually, business leaders recognized the tremendous value that effective inter-functional data flow could provide--enhanced decision-making, timely procurement, better resource management and built-in compliance controls. Thus, the enterprise resource planning (ERP) system was born.
Fast forward two decades and ERP is now ubiquitous in the business landscape. In fact, more than 70 percent of enterprises use ERP to facilitate order entry, procurement, production and financial management, according to a report by the Aberdeen Group.
Clearly, the concept of an ERP system is no longer a novelty. However, many businesses still struggle with making ERP optimization a reality. A recent report by Panorama Consulting, an information technology consulting firm specializing in ERP for small businesses, revealed that only one out of every two companies utilizing an ERP is experiencing at least half of the benefits it expected--making the odds of realizing significant ERP benefits no better than the flip of a coin.
That's a staggering proposition considering the amount of time, money and resources that go into deploying an ERP system.
To beat those odds and drive best practices, here are some of the most critical steps for optimizing an ERP system:
* Conduct an Experience Audit It's obvious all want the ERP to move forward, but first it is necessary to figure out what is holding the ERP back. To find out, solicit recommendations for system enhancements from key stakeholders within the organization. These stakeholders should come from every level--from the C-suite to the cubicles--to paint a comprehensive picture of the organization's expectations and the ERP's shortcomings.
This audit process should ask the right questions, engage the right people and generate the right data for implementing effective change. It should work closely with business owners, conduct extensive interviews...