Monday, June 23, 2008

Learning Post (June 18,2008)

There is no certain fact that one kind of ERP vendor (whether a major firm, a small vendor, or open source) is superior to others. We should evaluate all pros and cons of each type of vendor and make a decision among them considering our company’s specific conditions and needs.
We should ensure that some knowledge is left in-house during the implementation. There would be always someone in the organization that became a star during this process by gaining expertise about ERP by utilizing from the consultants. In that case, the management should focus on the ways to keep these personnel in-house by giving them additional benefits. As an example, we have discussed the packaging woman in a factory that became the star of SAP implementation.

Oracle Siebel CRM:
The film about (Siebel CRM) has showed us that Customer Relationship Management (CRM) can be also made more efficient through ERP systems. Siebel is a system designed for CRM by Oracle. Implementing this system is actually about the needs of the company; systems can be designed according to the needs of the company related with its CRM strategy.

Building the ERP Business Case:
Why should a company choose to implement ERP? The main reasons we have discussed were to have more control, to share information, for process innovation & automation, accounting & reporting purposes, data integrity, effective communication of data & processes. Also when ERP is implemented, fewer people would be maintaining the same functions and time/human capital savings are also important.
The most important point in the decision of the implementation of ERP is that it does not make you competitive if it is not implemented well – that is, according to the nature of the business and to the needs of the organization. So, only way to justify the implementation of ERP should be strategic reasons more than reasons such as cost-cutting purposes.
Why should a company not choose to implement ERP? After the strategic decisions (evaluation of how ERP can make easier to accomplish the strategic objectives), the main considerations would be cost and time in giving this decision. The organization may not have enough staff and/or money for ERP. In addition, the readiness of the administration and the organization in general is crucial because as we have discussed, implementation of ERP would not be smooth certainly. So, you need to ensure that the organization is ready for change. Otherwise, the transformation can result in failure or and event it does not, resistance to use the new system would cause huge problems and inefficiencies.
While implementing ERP, some systems become more efficient while others may become inefficient due to some inflexibility in the system. This is similar to the situation of the Ohio plant in the “Why ERP?” book. The important thing is that when we sum up these efficiencies and inefficiencies, the dominant one should be the efficiencies increased by the implementation.
The decision of the implementation of ERP should be given in line with the strategic objectives and/or roadmap of the company. ERP is just a tool rather than a strategy; so it should be implemented only if it would help the firm to accomplish its strategic goals. Some strategic analyses should be made before giving the implementation decision. Among these analyses, we have discussed SWOT Analyses and GAP Analyses.
In GAP Analysis, the company identifies where it aims to be and compares it with its current situation, then defines a roadmap. This also includes enterprise architecture. For instance, the current situation can be defined as enterprise architecture 1 (EA1) and it is compared with the planned/desired future situation EA2 by a GAP analysis.
Executives should identify the following points during giving the implementation decision: improvement opportunities, benefits, benefit categories, the implementation plan, and the metrics. These analyses should be combined with an overall matrix in order to have a look at the bigger picture.
We should keep in mind the business objectives, critical success factors, key performance indicators, and the benefits of each of the areas.

No comments: