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Industry Insights

Is it time for an ERP healthcheck?

Is it time for an ERP health check?

These days, most manufacturing and service management businesses have some kind of ERP system in place. But much less commonplace are manufacturing and service management businesses with ERP systems that are a perfect ‘fit’ for them, adding value along the entire order-to-cash process. To the rescue: a periodic ERP healthcheck—in order to make sure that your ERP is still delivering on its original promise.

And there are many reasons why an ERP system might not be delivering on that original promise. An ERP healthcheck might discover, for instance, that what was promised was never properly—or fully—implemented, for example. It’s often surprising how frequently that happens.

Alternatively, an ERP healthcheck might discover that while a company’s business has evolved, the ERP system hasn’t evolved to suit. There are often several reasons why this can happen.

Equally, an ERP healthcheck might identify inefficiencies in the way that a company’s business processes have been reflected in the ERP system. And again, it’s surprising how quickly these can add up, lengthening the order-to-cash cycle, and sapping employee productivity.

 

ERP healthcheck: past, present and future

At its starkest, an ERP healthcheck should aim to answer three questions:

  • What ROI has a business’s existing ERP system delivered?
  • How effective are the business’s current business processes?
  • As the business grows, what are its future ERP requirements?

And generally speaking, there’s often a relationship between the three. Simply put, an ERP system that hasn’t delivered an ROI—or which has delivered an ROI that is poorly understood—is often an ERP system with ineffective business processes. It almost goes without saying, therefore, that such a system won’t do a great deal to help businesses grow.

In our view, the ROI of an ERP system doesn’t come about by accident. It’s important to know, at the outset, just where the expected return will come from, and how it will be achieved.

And this in turn focuses attention on creating efficient and effective business processes, in order to generate that return.

Which in turn helps to clarify what the business needs from its ERP system going forward, as it evolves and grows.

 

ERP healthcheck: answers you can use

So what form does the output of an ERP healthcheck take? That depends on the broad conclusions of the healthcheck itself.

Sometimes, identified weaknesses and inefficiencies can be attributed to the fact that the ERP system is simply insufficiently understood by its users, with remedial training and tweaking being all that are required.

Occasionally, too, it’s possible to point to implementation failures, where the best course of action is to revisit those ineffective parts of the system, and re-implement around a set of new or different processes.

More usually, it’s often possible to see instances where there’s a gap between the needs of the business, and what the ERP system offers. Should a manufacturer move into aftersales service management, for instance, then if the ERP system doesn’t offer that capability, there’s little alternative to bolting on an aftersales service management package, and accepting the consequent integration complexities that go with such a move.

That said, it’s important to be pragmatic. If the evolution of the business had led to just a single mismatch between the business’s requirements and its ERP system, wholesale ERP system replacement is probably excessive.

But as the number of such mismatches increases—and especially with a view to future growth—then replacement may be an option worth contemplating.

 

ERP healthcheck: Goes here.

ERP healthchecks are available from a number of parties. If your industry has a membership-based representative body, for instance, then this may have specialist advisers who can help.

Alternatively, specialist IT consulting firms can help. Reputable firms will have proven methodologies and checklists, and be able to carry out the task as a short, focused project.

Here at Kerridge Commercial Systems, we can offer free ERP healthchecks to prospective customers. It’s a useful way of showcasing our ‘hands on’ industry expertise—and even if we conclude that the prospective customer’s present ERP system is adequate, our experience suggests that such customers are more likely to reach out to us should they eventually decide that their system isn’t really adequate any longer.

So if your manufacturing or field service business would like to register an interest in such a healthcheck, don’t hesitate to get in touch.

 

 

Categories: Manufacturing, Field Service Management

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