Why did you buy a $500K ERP and then continue to manage your business in a spreadsheet?

Why did you buy a $500K ERP and then continue to manage your business in a spreadsheet?

SourceDay

You’re not alone if you find yourself questioning why you went through the grueling process of implementing an ERP system only to discover that everyone is still doing their work in Excel spreadsheets. The size, scope, and impact of ERP systems may create the impression that they can do it all – but they can’t. And while you’re trying to manage broad enterprise requirements, detailed transactions continue to happen on a daily basis… outside of your ERP system.

Part of this is because of the original design intent behind ERP. With their roots firmly planted in manufacturing resource planning efforts from the 1990s (nearly three decades ago), ERP systems have actually come a long way. That said, the P in ERP stands for Planning: not Purchasing, PO management, or supplier Performance. And while most ERPs offer add-on modules that extend the system’s reach into these areas, there are some notable gaps in functionality that seem to justify regular and widespread continued use of Excel.

Some of the processes that continue to be managed in Excel after an ERP implementation – issuing RFQ’s, managing purchases after a PO is issued, and tracking supplier performance – may be addressed in Excel, but unfortunately this undermines the intended value of having an ERP system.

Common complaints about ERP systems include:

  • Poor user interface
  • An inability to connect the dashboard view to detailed supporting data
  • Frustrating levels of complexity

Few people would say that Excel has an impressive user interface, a savvy ability to connect high level visuals with detailed data, or slick ways of simplifying real-world business complexity. And yet, spreadsheets are always there as an ‘acceptable’ plug in when ERP falls short.

The irony of pervasive Excel workarounds is that it would be easier for users (not to mention better for the company) if there were a system to handle ERP extension tasks. No one says, “When I grow up, I want to spend my days typing numbers into little boxes on my computer.” Everyone has a ‘real’ job to do, and the smaller part data entry and manual tasks play in that job, the better.

People don’t continue to use Excel because it has superior functionality to ERP, they use it because they aren’t offered a better alternative. Having the right combination of sourcing functionality, PO automation, and ERP integration will allow your team to stay focused on their primary responsibilities.

While a user might leave the ERP system once a PO is issued, integrated PO automation picks up where ERP leaves off, making it possible to manage real time exchanges and updates with suppliers, track acknowledgements in real time, and receive automated milestone alerts. The same types of advantages exist with an integrated RFQ solution, allowing buyers to manage their requests as well as supplier responses in one place. Even supplier performance scorecards can be managed in a way that allows that information to be factored into ERP-related reporting. Excel doesn’t make any of this possible – something users would agree to when presented with a more robust alternative.

Integrating automated PO management with an existing ERP system should be a partnership, not a competition. Companies that manage RFQs, POs, and supplier performance through a system rather than spreadsheets increase user satisfaction and access to information without sacrificing the centralized data and reporting advantages of ERP. Integrating with a PO management system doesn’t mean that your ERP system is broken, but all systems have their limitations. The key objective is to address those limitations in a way that creates the greatest value potential for internal and external users, and spreadsheets certainly aren’t the best way to do that.