28 July 2016

The critical element in your ERP rollout



Achieve better business outcomes by targeting ERP deployments more precisely

In many businesses, at least one critical element needs to be in place and functioning flawlessly for projects to be able to move forward or production to happen. In a manufacturing company, for example, this might be a robot that assembles product components. Or it could be an industrial forge, where metal products are formed into their nearly final shape. An example in construction could be cranes, which means you need to plan your construction projects around the availability of the right types of cranes for the job. That includes transportation and the specialized vehicles required for it. Experienced operators have to install and run the cranes. Maintenance teams need to keep them running without downtime. Energy companies have to deliver fuel for them. Multiple conditions and dependencies have to be in place for the critical element in your operation to function as the business requires. And numerous impacts can be caused downstream if a bottleneck occurs around this key element.

When you make a choice of business management software, such as a new ERP system or software add-ins that fine-tune it to the needs of your industry and company, you should consider those critical elements first. The software tools you acquire need to help you plan, manage, and maintain them at the best possible level of performance, so you can achieve the business outcomes you promise to your customers.

Understanding what makes ERP software effective

If that seems reasonable, it is not commonplace. Not all companies give the right emphasis to these critical elements in the business when they select and implement business management solutions. We also see situations where a company has picked a certain software solution that can help plan and manage a critical business element or a key asset, such as cranes, but attempts to expand the use of that tool beyond the current business context and its optimal target range of addressable concerns. This is often the result of business and IT managers looking to achieve a high return from their investment. The providers of ERP software may be partly to blame as well. Some ERP systems or their modules contain extensive functionality that only very few companies require. It’s easy to understand why the IT team might be tempted to stretch the software, data, and users beyond limits and see how far they can take it. When these efforts don’t yield the hoped-for result, it can be frustrating.

At To-Increase, we and our partners experience this from time to time. Manufacturing or construction companies may, for instance, acquire a powerful software tool like Visual Project Planning for Microsoft Dynamics AX, and try to extend its use far outside the resources that would typically be the solution’s most important target. While Visual Project Planning can be highly flexible in supporting different types of resources, processes, and business models, you also need to deploy it effectively. That includes planning the implementation diligently and keeping the data it draws on clean and current.

Building around the essentials of your operation

If you apply a technology like Visual Project Planning to a key element in your business—let’s assume, you run a construction company and need to manage cranes—it can soon demonstrate its value and pay for itself. You can ensure that the cranes are where they need to be, when they are required, and you can also structure the many supporting activities and processes around them. That would help you avoid what sometimes happens in rapidly growing cities: A shortage of cranes or skilled operators leads to expensive delays that can cascade to multiple projects and clients. By using Visual Project Planning, you also can account for the costs related to cranes and ensure that they are billed appropriately. You can maintain healthy margins which do not erode because crane-related expenses eat into them.

As you work with your ERP solution and model business processes with their critical elements, you may also want to validate your assumptions and priorities. Often, it will indeed be the case that the forge, the robot, or the crane are at the heart of your business and you need to plan around them. But you might also find out that a specialized skill set, for example, is equally as important or more so. Then you can use your planning tools to account for this next constrained, high-value resource.

In our experience, using purpose-built software modules to manage lines of business and processes that are outside of their scope, is a bad idea. So is making investments in technology with too many capabilities that do not benefit your operation. On the other hand, if you perform a software deployment that closely fits a given business domain and helps you manage the critical elements without which your operation stalls, modern ERP can likely facilitate the ROI and performance results you aim to achieve. A software tool like Visual Project Planning will yield much better outcomes, and pay for itself sooner, when you use it to focus on the business requirement at the top of your priorities. That is what we recommend.

If you want to discuss ERP and the implementation of a solution in your business, we should talk. Please get in touch with me or simply contact To-Increase.

Peter van Leeuwen
Peter van Leeuwen,
Peter van Leeuwen,
Manufacturing Industry Specialist

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