Does The Business Need a new ERP/Business Management System?? What Are The Signals…
Sep 1st, 2007 by Satha
In to-days world technology solutions in the form of ERP and other business systems have a significant impact on people and processes in very many ways. Improved productivity gained through the appropriate use of technology generally translates into improved profitability.
Therefore to answer the question “Does The Business Need a New ERP/Business Management Systems“- one needs to evaluate the Critical Success Factors of the business in the context of the technology solutions currently deployed.
Typically some of these factors would be:
1) growth of the business: during the recent years has the business grown in number of customers, range of products and services offered, staff employed, geographical locations etc..
- is the business making best use of technology to fuel this growth
- are business partners, customers etc.. able to connect and transact business easily
2) productivity of people:
- are staff burdened by the need to maintain information in many different (disparate) systems
- are people able to share information freely between business units? Or is this process hampered by the existing systems “functioning in separate islands”
- is the systems administrator overloaded with requests for workarounds/coping strategies to deal with the inadequacies of the systems
- are the software applications/tools user friendly
3) quality of financial/operational information: the availability of accurate and up-to date information to manage the business and direct it strategically
4) opportunity costs/opportunities/lost:
- distribution
- are the right goods in the right place at the right time
- manufacturing
- could products be manufactured or assembled more cost efficiently
- the benefits of having better quality measurement and monitoring systems
- financial management
- is the business performance more in line with the strategy
- the operational cost of poor financial information i.e. poor collection patterns, high levels of inventory, excessive bank overdraft levels
When does a business require ERP?
Normally a company outgrowths their accounting package when the demand of the business-processes does not quantify to throw extra human resources at the problem just to keep the current solution running.
ERP should make business easier. However, companies need to be aware of the demands of the new solutions as well. Be well prepared and document the business processes to provide to vendors. Make sure that management has commitment to the process.
The Major ERP Vendors have failed to meet the aspirations of Small and Medium Industries vis a vis cost, performance, flxibility and ease of use. Over and above high costs, SMEs are forced to acquire large servers, highly qualified technical personnel, pay user based fees and recurring license costs etc.
The core intent of SME of optimizing cost is lost the moment they are fooled into going for a oversized, underutilized, misfit ERP.
Only ERPs like SYS-APPS (www.excltechnologies.com)
which are focused to the requirements of SMEs, can serve them effectively and help them realize their goal of improved efficiency with lower input costs.