The chasm between technicians and business theorists has to be bridged if ERP is to achieve any kind of return on investment. Behavioural changes across any corporation are key to achieving economies of scale faster and on a sustainable level.
According to Joseph Grobler, ongoing value optimisation specialist for Business Connexion`s Combined Design Engineers (CDE) division, companies that have implemented ERP systems are now questioning the value they expect to realise from them. Companies are now looking toward ongoing value optimisation - a business proposition developed by Business Connexion together with clients.
"Unfortunately most managers are still legacy minded; many are simply using expensive ERP systems as glorified data capturing tools. This is because management very often still demand reports in the traditional format," says Grobler.
Managers are complaining that they do not trust the information in their systems. They are re-training existing staff, hiring more staff, or acquiring add-on functionality, all in the hope of getting better decision-making data from their ERP systems. Standard reports are being replaced by custom-built reports to suit traditional management information.
"Management employees have not bridged the gap between how they did their jobs prior to the advent of ERP systems, and how to manage in an integrated and collaborative environment. Many managers need to make a significant shift in their thinking and behaviour around integrated ERP systems," says Grobler.
"This situation, in turn, leads to the perception by management that the master data is incorrect, which strengthens the belief that ERP systems are not delivering on implementation promises," explains Grobler.
This lack of understanding often results in companies hiring additional staff to cope with information inconsistency, rather than reducing staff and increasing their understanding of the system and how it works.
"Another problem is that employees tend to be confined to certain transactions through restrictive authorisation profiles. Companies can no longer be autocratic; they have to empower staff. Human nature has taught us that given near impossible working conditions, employees will find a way around the perceived system problems and this can infinitely compound the existing problem," says Grobler.
Realities of running businesses in real time require all parts of the supply chain to be up to date. However, delays in data input in the system at any point confine this ideal to fantasy. The traditional method of spreadsheet management has to be altered when working in real-time.
The only way around this data quagmire is to ensure that the data in the system is a true reflection of what is happening on the shop floor, in real-time, throughout the company.
"Creating ownership around each person along the supply chain will force accuracy as well as increase productivity. Making individual employees data owners means they will immediately identify exceptions or discrepancies and rectify faults.
"This leads to better accuracy, and once accuracy has been achieved, acceleration of the process is a workable reality. It is then that return on investment will be realised," explains Grobler.
"Only when each person in the supply chain is truly exception focused, and the correct supply chain balance checks are in place, is it possible to test lead time acceleration. It is integrated change in people`s behaviour that results in real money-making," explains Grobler.
More important is the need for change within management. Giving managers an understanding of the capabilities of an ERP system, how it operates, the value it can deliver and the cost-saving attributes inherent in an optimised system, will mean they are far more likely to embrace the new method of doing things.
"Using an ERP system should, as a matter of course, reduce operational costs, reduce stock holding and increase revenue. But this value optimisation can only happen through active change management from boardroom to shop floor," Grobler concludes.
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