Top tips to stop your ERP system falling into disrepair…

I may be turning into a grumpy old man. Last week my family gave me this dubious honour after a week, where I apparently complained about unruly children in my favourite restaurant (why are children allowed to run riot in public). This included the use of mobile phones in the same restaurant (clearly I was not in a good mood) and the use of “reply all” to emails at work (do I really need 10 copies of the same email).

Anyway, having thought about this new designation, I realize that in fact it isn’t all bad and that I seem to have permission to moan about anything and get away with it. So I have turned my thoughts to my work of developing and installing ERP systems, in an attempt to identify some of the factors that make business systems the bane of many people’s lives. My first thoughts are around the question: “why do systems fall into disrepair?”

I believe that a well run business system will provide competitive advantage, reduce costs and be instrumental to the survival of a business, and that such a valuable tool needs continual investment and fine tuning.

So, I have often wondered why a business will spend large amounts of money on software, implementation, and training to get a new business system working, and then sit back and assume that the job is done. Almost as though the system now needs no further work or investment, and that it will run the business from now to eternity.

Could it be a lack of interest, a problem of understanding, an issue of owner responsibility? Is it human nature to resist change and go back to the status quo?

The end result of this hands-off approach is an inevitable dwindling of knowledge and understanding of the system. This in turn leads to a proliferation of spreadsheets and databases in each department, and over time the shiny new system becomes little more than an invoice generator and basic stock control system.

I watched the following video clip, about the ERP take on the story of the tortoise and the hare, and this sums up exactly what tends to happen on so many systems.

It makes you wonder just how many companies buy a new business system when their current one is quite capable of doing the job, it’s just that everyone has forgotten what it is capable of doing?

And yet some companies seem to embrace their ERP system, constantly strive to improve its use and derive huge returns from it. There are a number of different approaches across companies. My top tips are based on customers that succeed.

Top six tips to get huge returns from your ERP system:

  1. Appoint a person who is responsible for IT and business systems. Ideally at director level, but certainly someone with authority to make change.
  2. Appoint a “seeker of value.” A person who should maximize the use of the system and strive to get as much value from the investment as they can.
  3. Allocate an annual IT budget. This should cover elements such as:
    a. Training
    b. Replacement hardware
    c. Visits from the System supplier
    d. Accrual for upgrades
  4. Have an internal induction process for new starters that should:
    a. Cover the use of the current IT systems
    b. Provide an overview of what the system is capable of doing (even if you don’t use some of these features).
  5. Plan for an annual “gap analysis” report by the supplier. This should focus on how well the system supports the current business process, and should identify areas that need fine-tuning.
  6. Be aware of events that can cause system disruption, such as:
    a. Staff leaving and new (untrained) staff taking over
    b. Arrival of new staff who “prefer the system in my old company”
    c. Business processes changing
    d. Buying or selling companies and subsidiaries

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