Don’t run with an outdated ERP system

////Don’t run with an outdated ERP system

Every manufacturer likely has some kind of enterprise resource planning program in place. However, there are still many firms that are using outdated solutions. Forbes contributor Louis Columbus said organizations are quickly starting to realize that there may need to be ERP implementation across the enterprise to keep up with modern business models, as old-fashioned ERP simply cannot keep up.

“Many of these legacy systems were customized and implemented when internal production efficiency, not customer-driven agility and responsiveness was the highest priority,” he said. “Brute-forced into place and evaluated on internal, not customer-centric metrics, these systems are weighing down the performance of enterprises dependent on them.”

Columbus noted that if ERP is left without a test or re-vamp, companies may end up falling behind competition due to a lack of speed, flexibility and agility that many others are starting to achieve. Legacy ERP systems may be effective for certain business processes, but a well-researched update can amplify the company’s return on investment and ensure operations are working effectively as a unit.

Planning the ERP implementation will be essential for every company, as Gartner reported in 2013 that 80 percent of the social and communicative business efforts will fall short through 2015. This includes ERP, to which Carol Rozwell, vice president and distinguished analyst at Gartner, said businesses need to realize how different modern adoption is from legacy ERP.

Workers have always been trained on an app or piece of software, but many ERP initiatives need to engage workers first and give them the resources to become more efficient and productive. Instead of forcing employees into utilizing an ERP system, companies need to show them why, exactly, it will be useful for them and how it will lead to a big edge in productivity.

Areas where modern ERP will improve business
Columbus wrote on Forbes that when an ERP system is designed for speed and agility, there will likely be vast improvements in sales for manufacturing organizations. Customer information is going to become readily available, thereby allowing employees to serve clients quickly and create a swift workflow. The more intertwined ERP is with business processes and system, the more likely it is the organization will function better.

“Based on my experience and informal survey of manufacturers, those who have greater than 60 percent adoption of their ERP systems (inclusive of their senior management and executives) are gaining greater insight into how customer forecasts and requirements impact production,” Columbus wrote on Forbes.

Other benefits of the software, he said, include:
• Reduction of cycle time
• Better management
• Improvements to industry targeting, thereby heightening sales
• Fortification of the mobile network

Panorama Consulting said in a recent report that more than 60 percent of ERP implementations are doomed to fail. However, this is not a given for every company. With some thought put into the software and how it will move forward, organizations should see success in their ERP implementation.

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.