Any company planning to implement ERP may want to ask these 5 questions?

  1. Are our systems (policies, processes and workflows, procedures and forms) clearly defined or have we clearly defined what systems do desire to be implemented in ERP?
  2. How comfortable are our employees with technology?
  3. What other technologies do we need? Do we want them to be integrated with our ERP?
  4. Does an ERP fit into our vision? What benefits do we want to realise from ERP?
  5. What is our budget? How much can we afford to spend in ERP Implementation.

These questions would help the company in preparing its plan of action for ERP implementation.

  • Are our systems ( policies, processes and procedures ) clearly defined or have we clearly defined what systems do we need?

Implementation of ERP or upgradation of ERP, gives an opportunity to companies to evaluate their existing systems and align them with the future plans of the company. 85% of the companies that implemented ERP in US in 2020 either improved key processes or  most of the business processes as part of the process.

Lack of defined systems results in increase in time and costs of implementation. Poorly defined goals and undefined scope of work are primary reasons for delay in ERP implementation and cost over runs. ERP implementers prefer companies where the systems are documented and they know what is to be digitised. It saves lot of rework.

 

  • How comfortable are our employees with technology?

It is important that employees of the company are comfortable with technology and electronic systems. It is easier for employees who have worked on computers to graduate to ERPs. For example, an engineering company working implementing ERP, had to adopt bar code technology for tracking material movement. It saved employees from keying in data. Another company, in Industrial Catering, delayed its ERP implementation by a year and first developed all its MIS on Excel so that employees could get used to computers.

 

  • What other technologies do we want to integrated with ERP?

Most companies use a suite of softwares for various things. For example, attendance machine systems ( punching card to biometrics), bar codes in despatch, Point of Sales systems at retail stores, web sales etc. It is an opportune time to evaluate all the technologies and decide on which need to be  integrated with ERP

 

  • What are our expectations from ERP?

What are the motivation of the company to implement ERP. Is it reduction in head count, cost savings?  It helps us prepare our cost benefit analysis and evaluate if implementing ERP makes business sense?  Most companies invest in ERPs for streamlined workflows, better discipline and control, improved decision making and better monitoring. ( https://mentorsunlocked.com/cost-benefit-analysis-for-erp-implementation/)

 

  • What is our budget for ERP implementation?

Market place is full of ERPs. ERPs from small companies to branded ones such as Microsoft, Infor, SAP etc. The costs could range from 10 lakhs to couple of crores for software licenses and its implementation. It is also important to factor in other costs such as employee training costs and learning costs. Some of the other associate’s costs are costs of data migration, running two systems (legacy and ERP) in parallel for few months till the time the company can move only to ERP.

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