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Enhance ERP to Improve Business Effectiveness

Failing to periodically assess existing systems negatively impacts business.

VentanaView™

Summary

It is time to reevaluate your ERP system. Most companies do not attain the full business benefits today's ERP solutions can provide in supporting performance improvement initiatives. Not every company will benefit (or benefit enough) from upgrading its ERP system, but even a routine examination may quickly reveal opportunities to improve the system. Companies often will find ways to redefine and automate processes to promote operating efficiency, achieve greater value from company assets, and improve management's decision-making capabilities.

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Companies invested a lot of time, money and pain implementing ERP solutions in the 1990s. The system is running smoothly now, so why should a company make changes?

Ventana Research often sees static ERP systems preventing companies from improving performance. Underlying software and systems issues may stall or make performance improvement projects more difficult and expensive to deploy. In addition, over time internal business processes improve, best practices evolve, technology reworks what is practical, and the external environment (regulation, industry structure, etc.) changes.

The cumulative impact of these changes negatively affects how the ERP system supports the business. Modifications to business processes may not have been implemented well in the IT infrastructure, or may not have been automated at all. Keeping core ERP solutions current and expanding the scope of deployments to achieve greater efficiency, as well as promoting more effective business execution, is required to maintain optimal performance.

Not every company will benefit from an ERP system upgrade, but ERP systems are at the heart of three sets of performance issues:

1. Missed opportunities to use ERP systems to redefine and automate processes that consume a great deal of employee's time and waste resources. Often, to save time and money, the initial software implementation simply copied an existing process without exploring how information technology could enable a better approach.

2. Inability to obtain all of the information needed in a timely fashion to make the right decisions. Companies can benefit from consolidating ERP instances and using capabilities built into the system they are already paying for.

3. Failure to keep ERP software synchronized with internal processes, leading to inefficient execution.

Different business units may be using software from different vendors, they may be several versions behind the most recent software release, the infrastructure supporting the software may be fragmented and drive operating inefficiencies in the IT department, and so on. Individually, each deficiency may be minor. The cumulative impact of all deficiencies may be a roadblock to improving performance.

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