Enterprise resource planning software has become widely adopted by manufacturing organizations, but does the solution fit with what the organization wants to do? Pre-planning for each ERP solution needs to be done, according to what Taryn Cromie, sales manager for HansaWorld South Africa, told ITWeb Whether adopting Dynamics NAV or another ERP solution, the company needs to be sure the ERP solution will grow with them and make sense to have in the long-run.
"The bespoke ERP solution, designed from the ground up to suit the individual needs of one business, is a thing of the past," she said. "Not only is it expensive and time-consuming, but also fraught with extreme risk; by the time the solution is ready, for example, the business may have changed so dramatically that it is no longer relevant."
Companies need to determine what they need to buy before they even start looking, according to what Eckhard Wernich, HansaWorld's regional manager, said. There must be clarity on what the functionality will be, what is necessary and any other features. It will come down to far more than simply what the business thinks it needs, as fancy bells and whistles will not work well if the base of the program does not fit.
Cromie said the problem with businesses that heavily customize their ERP suites without truly knowing what they need is that it will likely require technical expertise and training. This means if it doesn't end up being the needed solution, there will be a lot of money wasted in the initial implementation that may not have much, if any, return on investment. Businesses should have an 85 percent fit between the software and the needs of the company, she said, with the 15 percent able to be used as tweaks and customizations to the program.
"Be cautious when choosing a system that requires extensive customization," Cromie said. "You are probably writing yourself out of the R&D made available through annual license fees."
Preparing for ERP
Johann Heydenrych, industry solutions director at itelligence, wrote on IndustryWeek that ERP systems have become more affordable and essential over the last several years, but that does not mean manufacturers should be diving right into a system. There must be a basic level of preparedness and best practices in place that will allow for a smooth transition into ERP.
There first needs to be a comparison developed of how the business is without ERP and where they would like to be with it. Benchmarking and looking at what peer companies are doing will likely be very helpful with this, Heydenrych said.
"This inside-out comparison will clarify the performance of the manufacturer's competitors," he said. "Once a manufacturer knows how many units per hour a competitor produces, and at what cost per unit or throughput per unit, understanding which areas within the organization need improvement becomes self-evident."
ERP adoption cannot simply be thought of as a simple move; there needs to be a level of planning to ensure the implementation goes as well as possible and fits the company like a glove.
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.