This is a guest post by Harry Landsburg, Director of Business Process Technology Consulting for the Delaware Valley Industrial Resource Center.
All business owners know that their ERP software could work better. But not all company leaders understand how to achieve better value from their software. This article provides a step-by-step approach to evaluating your current manufacturing ERP or MRP system – and making a sound decision on how to improve it.
Evaluate Your Vendor and their Technology
Start by making sure that you know what you have now. This means understanding your vendor, your software design, your staff and the way your customers and suppliers prefer to work with you.
Do you know the financial health of your vendor? Can they finance the next major upgrade coming from Microsoft? Some vendors never made it from DOS to Windows, while others are languishing in Visual Fox Pro. Today’s sweet spot is a SQL database and a .Net user interface.
Here are a few questions to ask about your vendor and their technology:
- What platform is your software on?
- What database is your system utilizing?
- Is your software designed for easy interaction to the Internet?
- What enhancements is your vendor working on?
- Can your current solution be accessed from remote devices like tablets and phones that require the software developer to format screens to make these lighter, smaller devices easier to use?
Knowing the answer to these questions will help you determine how great a partner your vendor can be as your business gets more complex and you look at technology to save cost or enhance your value to your customers and suppliers.
Internally, there are also questions you should ask. Some examples are:
- Did your staff ever get the right training when the ERP software was implemented?
- How do you train new staff?
- What benchmarks are in place to measure how the MRP system is providing the intended value?
Measuring how well you are using your current ERP software is an important part of the evaluation needed to decide on a software improvement direction.
Finally, do you know how your customers and suppliers would like to work with you? To find out, dig for answers to questions such as:
- Are you aware of preferences to use EDI for communicating orders and EFT for payment requirements?
- Do you have the technology to most efficiently download forecasts from customers into your system?
- Do your suppliers want better access to inventory levels of items they sell to you to better support your business?
- Does your software integrate with your web site to enhance your ability to quickly process customers’ orders?
The answers to all these questions position you to make sound decisions about your current MRP system and the best approach to increasing the value of your software to your business.
Watch for Vendor Danger Signs
You should consider replacing your software if it is built on an old database with an old language. Talk to your vendor about where they are positioned regarding database technology and take time to understand their upgrade plans. Also, be aware of the following vendor danger signs.
If the vendor can’t tell you how long Microsoft will support their current platform, consider this a danger sign because it may signal a time, in the near future, where outdated technology will leave you incapable of optimizing your business with suppliers, customers and the Internet.
If your vendor is not financially able to upgrade your software to a platform that can effectively integrate with current versions of Microsoft tools, then there is no reason to continue investing in their technology, other than to improve staff utilization of the current product until it is replaced. Even if you don’t own all of the vendor’s ERP software modules, don’t buy them. Instead, devote staff resources to planning for the ERP system you will buy soon.
If the vendor is on a current platform and positioned well with their technology, then look to upgrade. Also, determine if there are business needs that can be addressed by software modules that you do not currently own. Acquiring new capabilities and investing in training that will help your staff better use what is already available, are worth serious consideration.
Squeeze More Value From Your Current ERP Solution
If you determine that it is worth sticking with your current vendor, you need to know what you want your software and staff to do better. There are “higher level” and “deep dive” approaches to answering these questions.
A “high level” approach might involve surveying your staff, customers and suppliers about how they struggle with your current solution and how they envision improvement. Keep in mind that Access databases and Excel spreadsheets they will likely be perceived as shortcomings. Surveying these distinct groups will provide insight into areas that need further investigation and will provide the cost justification for new modules.
Alternately, you can take a “deeper dive” by assigning teams that will create current state and future state value streams or business process maps of the major processes in the business. These maps are visual aids (yellow Post-Its on flip charts or drawings of a process flow on a white board or flip chart) that detail all the steps in a process. This allows a group to compare how the process works today with how it could work in the future with better software and improved process design.
“Deeper dive” teams can identify the needs for enhanced software as well as improvements in business processes that remove non-value added activities and enhance workflows. This more in-depth analysis will better identify the full value that software enhancements can bring to the business.
Know When to Retune, Refine or Replace
When trying to determine whether it’s time to retune, refine or replace your ERP software know that technology changes rapidly and can affect all levels of your business. The way your customers and suppliers do business with you can be significantly enhanced using current business tools. If your vendor is unable to help your business stay current, then it is time to look for a new ERP system.
About the Author
Harry Landsburg is Director of Business Process Technology Consulting for the Delaware Valley Industrial Resource Center, Philadelphia, PA. He can be reached at email@example.com.