Defining ERP requirements overall

In any enterprise resource planning implementation, especially those utilizing the Microsoft Dynamics NAV platform, businesses should have a thorough understanding of their needs. In this way, companies are able to transition to a solution that helps them improve productivity and profit margins. By relating those priorities in a way that is effective in an ERP solution, they can work closely with a Trusted Partner or vendor to ensure that the software integration fits well within the context of the business. As a result, one of the first things that companies have to consider when they start looking into ERP solutions is assessing their requirements.

Knowing what you need
ERP has a great impact on various aspects of a given business. This is especially the case with distributors and manufacturers, which can utilize modules from inventory management to timekeeping software. As such, requirements for an implementation tend to display the processes that currently represent parts of the overall business model. That includes planning functions at the managerial level, assembly line processes at the factory floor and sending out orders for customer fulfillment.

Because these processes are essential to operations, Manufacturing Automation Magazine recommends that requirements analysis be one of if not the first step in the entire ERP implementation. That way, companies know the purpose of their transition and develop a long term strategy around it.

How this happens can vary. A common strategy is to create a checklist of processes that should improve to better operations. Ultra Consultants advises against doing this, however, as it provides little use to any evaluation. Instead, companies should look to current aspects of the business, create an optimal future scenario with these elements being improved significantly and then match that with the available options in ERP software. One way of doing this is creating a request for proposal document that outlines this future situation based on available resources.

Why it's necessary
Along with addressing what aspects of a business need to be improved with an ERP implementation, it's essential to define the reasons those particular elements need to be improved. The return on investment in an integration requires that there be an explanation to any adjustments that the software will make, according to ERP Focus. This is because not every element will immediately justify the costs of installing the software.

Sometimes, this means coaxing out tangible benefits where there seem to be none. For example, "better decision making" is a perceivable requirement, but without any context as to why it's necessary and how it fits into the entire business process, it's not well-defined. A better way to handle such intangible aspects is to attach them to a specific process within operations. In other words, a company should look at "better decision making in inventory turnaround" as a defined requirement. By making more informed decisions about turnaround, a company can greatly improve the efficiency in which the process occurs. This then translates to cost savings and improved profit margins, themselves actual increases in ROI.

Learn how to define your ERP strategy by downloading the white paper entitled "ERP in Manufacturing: Defining the ERP Strategy" from the DMS website today.