ERP needs optimisation to deliver

 


Johannesburg, 15 Mar 2011
Read time 3min 10sec

Enterprise resource planning (ERP) systems offer a great deal of potential to improve a business`s way of doing business. But Keith Fenner, vice-president, sales, Softline Accpac, says that while most organisations rely on ERP systems, relatively few are able to truly optimise the capabilities and functionality the software products can deliver.

Fenner says more than 60% of ERP implementations fail to meet expectations. "Not realising the anticipated return on investment, extending the implementation schedule and go live date far beyond planned, going over budget by a large amount, interrupting the organisation so much that business suffers, and stopping production and/or not delivering products to customers are the major issues."

But, according to Fenner, this doesn`t mean your project is doomed from the start. He says that understanding the factors that can interfere with the project as well as what items can lead to success is extremely important. "Knowing the common reasons ERP implementations fall short and how to avoid them can save you valuable time and money and help make your project a success."

Fenner says there are several common implementation pitfalls, the most frequent being the purpose of an ERP system. Companies can focus too much on replacing the systems and functionality they have and fail to learn enough about the capabilities the new ERP system can deliver.

In other cases, ERP implementation begins without a clear understanding of the benefits that will be attained. As a result, they are not measured against the pre-implementation environment. "Many companies go through ERP implementations without a step-by-step roadmap, making it difficult to achieve continuous improvement. It is also a mistake not to analyse existing business processes and identify opportunities for organisational improvement, expecting the software to cover up weaknesses."

Lack of commitment from top management is another pitfall. Fenner believes there is a high likelihood of failure if company executives are not strongly committed to the system, do not foresee and plan for the changes that may be necessitated by ERP, or do not actively participate in the implementation.

"Top management often tends to delegate the implementation to lower management levels, which can lead to their being out of touch with critical events or lack the understanding of the scope, size, and technical aspects of the project." He says top management must view the ERP implementation as a transformation in the way the company does business.

Another misconception is the assumption that an ERP implementation is viewed only as an IT project. If it is, Fenner says, it will never realise its full capabilities and it is likely the technology will be deployed in a vacuum, the software will not be aligned with business processes, and staff will resist using it.

He says some of the biggest ERP system implementation failures also occur because the new system`s capabilities and needs are mismatched with the organisation`s existing business processes and procedures. Poor selection occurs when a company hasn`t adequately developed functional requirements definitions or when the ERP project team doesn`t take the time to run through the system`s screens as they would during the course of their daily work to discover if the software`s features will accommodate their needs.

"While an ERP system can help, it`s only as effective as the effort placed on the implementation. By being aware of the reasons implementations fail and knowing what best practices can be employed to help ensure success, companies can save valuable time and money and achieve a higher return on investment," concludes Fenner.

Softline Accpac

Softline Accpac is a provider of business management solutions, including financial, distribution, service management, retail, warehouse management, manufacturing and CRM to the mid-range market. Accpac solutions are delivered to 130 countries exclusively through a global network of solution providers, including over 150 throughout Africa. Softline Accpac`s product line includes: Accpac ERP, Accpac CRM, Accpac RMS, Service Manager and Accpac Insight. Softline Accpac also distributes Sage SalesLogix, Sage Geode and Sage ERP X3, a full-service enterprise management software system for mid-to-large businesses. With a choice of languages, currencies, enterprises, locations and legislations, Sage ERP X3 offers an efficient, multi-company solution.

Softline

Softline is a leading provider of accounting, payroll, CRM and ERP software solutions to small, medium and large sized companies. Founded in 1988 by Ivan Epstein, Alan Osrin and Steven Cohen, Softline was established during the formative years of the software industry and listed on the JSE Securities Exchange South Africa in February 1997. Softline expanded to establish a strong position within its area of focus in South Africa and Australia. Focused on the development of accounting, payroll, CRM and ERP software solutions, Softline has a 20-year track record as a market leader. The group has a broad range of products offering users a variety of software solutions to run their businesses efficiently. Softline`s leading brands include Softline Accpac, Softline Pastel (Accounting and Payroll) and Softline VIP. The combination of the group`s product offerings provide Softline customers with comprehensive, well-branded accounting, payroll, CRM and ERP software solutions. In November 2003, Softline was acquired by the Sage Group plc, a FTSE 100 company. The software group includes market-leading businesses throughout the United Kingdom, Europe, North America, South Africa and Australia, supplying business software to the small, medium and large sized business community. Softline has a solid track record of profitability and cash generation. The group delivers quality accounting, payroll, CRM and ERP software solutions that improve the efficiencies of businesses around the world.

The Sage Group

The Sage Group is a leading global supplier of business management software and related products and services, principally for small to medium-sized enterprises. Formed in 1981, Sage was floated on the London Stock Exchange in 1989. Sage has 6.3 million customers and 13 400 employees worldwide. We operate in over 24 countries covering the UK, Europe, North America, South Africa, Australia, India and China. For further information, please visit www.sage.com.

Have your say
Facebook icon
Youtube play icon