Adopt a Holistic Approach to Realize the True Potential of Your ERP

Addressing both operational and strategic challenges will enable you to get the most out of your ERP systems.

By Manish Mehta, head of Satyam's SAP and Testing Practices

While almost all global organizations rely on enterprise resource planning systems, relatively few are able to truly optimize the capabilities and functionality the software products can deliver. As a result, they are unable to achieve the return on investment and transformational results they had hoped for. Let's examine some of the strategic and operational challenges to ERP implementations and provide several best practices companies can employ to wring the utmost value from their ERP systems.

Strategic challenges

Numerous strategic hurdles can limit ERP adoption and effectiveness, and, as such, need to be addressed. Common ones are:

The purpose of ERP adoption is overlooked. Companies can focus too much on simply replacing the systems and functionality they have (without ERP), and fail to learn enough about the capabilities an ERP system can deliver. In other cases, ERP implementation begins without a clear business case or benefits that will be derived. Because benefits are not articulated ahead of time, they are not measured against the pre-implementation environment. In addition, many companies go through ERP implementations without a step-by-step roadmap. As a result, continuous improvement is difficult.

Companies rely on a limited technology strategy. Many companies do not understand the gaps between their current systems' capabilities and the potential technology initiatives they would like to take on.

The application strategy is not aligned with business priorities and cannot accommodate fast-changing market dynamics. When ERP applications are not aligned with business imperatives, potential gains are marginalized. In the same vein, companies should keep medium- to long-term objectives in mind at all times, and avoid shortsighted decisions. Too much attention to short-term gains will make ERP business applications tend to immediate business requirements rather than the organizational vision. Additionally, companies should also ensure that their applications strategy is aligned to the marketplace changes, or their systems may lose value before being leveraged fully.

Operational challenges

Overcoming operational pitfalls also requires vigilance and attention. Some typical ERP operational oversights include:

User requirements and preferences are forgotten. ERP system users are customers, too, and should be treated as such. If a solution does not accommodate user preferences, or is too complex, users will find other options—it's human nature. Users may see no point in behaving differently, and will resist change, if organizations don't budget for quality user training.

There is a lack of focus on business process optimization. Years ago, ERP meant state vanilla, one-size-fits-all systems. If ERP systems enabled business process optimization, it was by happy accident. The compelling reason for ERP adoption, in most cases, was technology replacement: end-of-life technology was replaced by ERP. Today's versions are more flexible and robust. Organizations today can't afford to ignore business process improvement while planning to implement ERP applications.