Supply Chain Performance

Optimize and Extend Your ERP

So you launched your ERP.

While your ERP is doing a great job of managing so many aspects of your business, there is a good chance there are a few areas that you could use some help.

We’ve spoken with 10,000 of thousands of ERP owners and users. No matter how good the ERP, all ERPs users have the same major complaint. They don’t trust the data in their ERP. Now, that’s not an ERP issue.  ERPs systems today are very robust and sound. It’s a data input/output issue which ironically is caused by the users. If you’re suffering the same and not satisfied, now is a good time to fix all those frustrations. That’s a process that starts with optimizing your ERP, by making sure you’re getting all the value out of your ERP that you should. 

The first step in making a fresh start with your ERP is to make sure you’ve got all the updates to it that are available, and to ensure your team members are making the most of what that ERP has to offer.

On the face of it, that first part is relatively easy. Get hold of your ERP partner and work with them to identify any updates or upgrades to what you have in place. Just like you get those regular updates on your iPhone that keep your software working right and interacting appropriately with all the latest and greatest apps, so your ERP should be updated regularly too. If you had a service agreement with your provider, then you should have no needed updates at all. If not, you may have some work ahead of you to get it all caught up. And then it would be a really good idea to purchase an ongoing service package so the updates happen automatically from now on.

But even if everything is up to date, it’s almost certain that you have gaps in how well your team is making use of your ERP’s functionality. Back during that initial launch, all those places where people on your team kept using their spreadsheets, or kept reverting back to the “old-way” manual processes, were places where the ERP you invested in for functionality that you’ve never really put to use. A complete review of business processes not being done completely within the ERP will let you identify areas where your team might need more training, or more work with the ERP experts, to move all your current processes into the ERP. (You may run into processes that your ERP just doesn’t have a good solution for along the way. More on that shortly.)

The next step is a review of all your new business processes that you’ve added since you launched your ERP.

That can be a big source of work that’s done outside the ERP, since it may involve technology that didn’t even exist back then. It may pay to hire external consultants to help conduct a complete review of your technology to help identify places where your ERP can serve processes that just didn’t exist when you first launched it. They can also help you with a forward look into what might be coming your way in the future, to help you get ahead of the game, and either work with your ERP provider to close any gaps or to identify other solutions if not supported by your ERP.

While ERPs are vast in functionality, businesses today are too complex and too different from one another for a single software suite to have all the answers for them all. And the technology when ERPs were first developed couldn’t do everything it can today.

ERP companies have made steady improvements to their software over the years–but they’ve got way too much on their plates to be building custom solutions. This is where leveraging the growing opportunities to extend your ERP can pay big dividends.

The final step is to identify those areas where you need functionality your ERP doesn’t support, then extend your ERP with add-on solutions to make it happen.

As I’ve stated, stakeholders don’t trust the data in the ERP because the data is only as good as what’s being input into the system. For example, the team of buyers who are manually managing all of their POs and supplier relationships do not have time to update everything in real time. This creates a domino effect that impacts cross-functional teams, such as Planning and Scheduling and AP and worse…your customers. Manually entering data in multiple places is not a scalable or sustainable solution.

None of that is unusual. It’s a simple reality that no ERP is going to automate everyone’s complete slate of business processes, or solve all the problems that slows businesses down and wastes people’s time. But let’s also be fair—your ERP has automated a lot of your business processes, and it has delivered real savings in time, money, and frustration. 

The good news is that extending your ERP–adding solutions that’s tailored to your specific business needs–is getting increasingly common and effective, and it can help you get after those opportunities not supported by your ERP. 

The trick to building trust in your systems is to understand your pain points and design a business process to address them, with a top-down change management approach. That’s where coupling new, tailored solutions to your ERP can make all the difference in the world.

There are solutions that will leverage your ERP to help automate all that manual administrative work some of your most valuable employees are still doing, despite living in today’s super-digital world. They can also allow you to push your ERP extension beyond your four walls, bringing suppliers, customers, and other business partners into the mix of fully leveraging the power of your ERP.

Think about procurement alone, and all the manual work that goes on there. There’s the RFQ process, PO generation and approval, and change order management. Then there’s AP, which is most likely a sea of manual work. And what about supplier metrics and communications?

There are other areas where ERP extensions can be helpful as well. Perhaps you had legacy software that was never integrated with your ERP. Or maybe you’ve added new software like a CRM that needs to interact with the data in your ERP. Extensions can help with those challenges too.

A word of warning, here, though: a lot of companies find it too tempting to custom-build their own solutions to these problems. It’s a whole new digital twist on the old build vs. buy argument. Maybe you think your own specialized knowledge about MRP, for example, means you can build a better system yourself than you can buy from outside. And there may be a good bit of truth to that.

But you can find yourself in some binds down the road. First, it’s pretty likely that whatever is created by your own IT team will be viewed by them as a project with defined start and end dates, and could be left behind once it’s launched. Just like any software system, a home-grown solution needs to have regular updates to keep up with outside technology advances and with your own business changes. That may never happen with a system you’ve built for yourself.

And the other problem is that over time, nobody will even know how to troubleshoot it when things go wrong. As team members change and the system gets long in the tooth, it could well become an albatross around your company’s neck. Even training people to use it may become a big challenge.

So it’s best to do the work of identifying where your business needs to call for extensions to your ERP, then go out and find the companies that offer those customized solutions and the long-term maintenance and training processes that go along with them.

It’s best to think of your ERP not as the solution to all your business process automation problems, but as a base on which to build the complete set of solutions using  add-ons that will serve all aspects of your business. And that should become an ongoing internal process, with regular reviews of your business needs, and assessments of any changes or additions to your business process automation software system that might be called for.

Treat your ERP and its add-ons as a tool you need to tweak and grow right along with your business. You’ll be glad you did.