Monday, June 14, 2010

should companies be adapted to ERP or the other way round?

Today the crucial question is: Should companies be adapted to ERP or the other way round?

Maybe some of you don't know what an ERP is, but i am sure most of you have heard about SAP, or even dealt with it at your companies...

Let me, in first place, define what is an ERP: According to Wikipedia, "Enterprise resource planning (ERP) is an Integrated computer-based system used to manage internal and external resources including tangible assets, financial resources, materials, and human resources. It is a software architecture whose purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders". Although this description gives more light about it:

What can ERP do for me?

ERP streamlines processes within your organization and helps you meet business needs more efficiently and quickly. To take a simple example, if you are a manufacturing concern, your ERP system comes into action from the point your sales representatives in different parts of the country or world, book orders, and feed them into the system. The system helps you track what inventory you have of raw material and finished goods, how much more you need, and how much time it will take you to deliver. Your customer service department can then use this to tell the customer when to expect his order. Your manufacturing department uses the same information to set its production schedules, hire temporary staff, and so on. Your finance department uses it to arrange for money, collect money from previous customers, or pay suppliers. As the goods are produced, the packaging and logistics department can gear up for shipping. Customers can track the shipping status online.

As per my personal experience, I have worked in two companies with ERP systems...and in both cases the experience was painful because I had the chance to work by the time the ERP was renewed and updated or implemented for the first i am biased when i am asked if the company should adapt to the ERP or vice verse: I truly think the ERP should be adapted to the company needs, but I am also aware that the fact that an organization has been working for decades (in my case, FCC Construcción) without any of these tools doesn't mean that there is nothing to improve in the organization of the company!

However, and specially for big corporations, my opinion is that an ERP must be adapted to the needs of the company in order to be fully efficient. If we take into consideration that a ERP has been designed by a limited group of people and for very different types of companies...ho
w can we rely on this tool to manage a giant like, for instance, FCC (more than 60,000 employees).

The cost of a non-effective implementation or just a substantial delay in reaching a cruise speed in the use of the ERP is definitely much higher than an initial rethinking of the tool in order to adapt it to the reality of the Firm.

In order to provide a more detailed answer and to summarize this post, these are the steps that should be follow
can be found in the image attached:


Detection of points if existing processes to be improved

Development of new processes

Development of ERP Information System

Incorporation of Logistics

Training of users

Pilot application


Delivery of ERP in full operation

Today's song is because we are not angels...

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