Global ERP for the Indian Audience
Much has been written in the past on the objective, outcome and challenges of ERP implementations. Large organizations subscribing to global ERP’s invariably compelled conclusions of the outcome being enhanced internal efficiencies and external competitiveness. However, the truth is further from these assumptions.
People at the helm of such programs can easily relate to the originally approved management objectives slowly fading into the background to pitch for a much compromised and obligatory transition to the ERP.
Why does this happen? What are the primary reasons for an unplanned turn from the initial expectations? And how best can these be overcome and handled differently. Here are some key points for contemplation:
Product or Solution Limitations
1. Limited accommodation of fast growing and innovative business solutions –
Digitally backed financial transaction solutions have been on a jet speed journey in the last decade and have brought about revolutionary transformation in the business cycles. Result is evident from the nature, volume of transactions and working capital management changes that is has brought about. Furthermore, its impact on the new business relationships, questionable continuity of some non-compliant partnerships needs a special mention. Thus, ERP solutions marching alongside, if not ahead, in support of such innovative solutions is a key test of its sustainability.
However, the ERP’s have EFT’s as the last amendment/inclusion in the money exchange techniques with wallets, card transactions, gateway exchange etc all being too far ahead. Resulting accounting needs of one debit-multiple credits and vice versa, pre-Loaded cards and accounting integration of consumption etc are all some of the need yet to be addressed by the applications.
Result…. The business need for the speed of a receipt transaction to be inherited for a real time order fulfillment is far from being met. With high digital capabilities on one end, operation teams are left to deal with the large volume of transactions using the traditional data entry, accounting and reconciliation methods.
A counter-productive result of increased manpower to manually handle this, is undoubtedly, a deterrent to most ERP clients.
2. Missing link to Outlier/Work list management –
In the equal opportunity business environment of today where the top tier organizations are also on stage competing with the SME’s and the startups, quick realization of opportunities, digitization and speed of operations have become the mantras for triumph.
One of the arguments on the length and breadth of ERP has been that while the systems consume a lot of data, the digest of this data is often not available in the form of key business insights. Also, triggering alert/action based on transaction status and corresponding thresholds, much needed, for building speed of operations is not inherent in the ERP’s. Barring a few self-service applications, the solutions around outlier management are yet to get their fair share of attention.
Increased focus on sharpening the definition of transaction chains and drawing a critical path around them can help create models adding speed to operations and will be a welcome change embedding culture as part of the process.
3. Solution orientation to service sector –
While most ERP’s have sustained the need statement in manufacturing sector, little has been done to extend its relevance to the retail and service sectors. The solutions around SCM, Partner relationship management, accounting cycles, regulatory reporting etc has continued to carry the essence of manufacturing processes leaving service sector to align their dictionaries. This is a huge opportunity market for the ERP space and is least explored.
Finally, the only answer is, as in natural evolution, success and failure are determined not by objectives set but by their adaptability.
Can the adopting organizations and implementation partners influence the outcome of such deployments and leave it closer to the imagined objectives. They, most definitely, can.
1. Keep Customization to the minimum is often understood as a huge compromise leading to various steering committee level approvals to steer this ahead to the next phase. However, needless to mention, this principle is used to reiterate that global ERP’s bring with them a, a definite promise of transition to best practices – otherwise one of the primary objectives of ERP initiatives.
This general principle can contribute immensely to the pace of the project and the exclusivity of the end solution. They have the power to create industry best solution models for the competitors to adopt. When drawn as a ratio, the tuning of the system to individual organization needs can range between 2% - 5% depending on the scale of implementation. Anything in excess of this would endanger the end objective and add heavily to the project complexity.
2. Fine Tuning people skills, as an important aspect of the project, cannot be underestimated. This is not limited to technological skills but extends to the functional knowledge of people who are at the realm of operations. An important phase of the project, “UAT”, as it is termed, is otherwise meant to meet this key need of success. It has, however, now assumed a much- reduced role of a radar for the next phase of “Go Live”. Further, the outcome is left to the discretion of the users in the most logical manner that they define.
This phase can, however, be best leveraged to turn the attention of people to new business processes and alternatively, be coined as "UOP"- User Orientation phase. This is the last opportunity for the implementation partners to leave an ever last impacting of having met the ERP goals.
3. Connect to Business relationships through ERP and laying foundation stones to a strong reliable business relationship is well understood by ERP design and hence has some in-built communication model solutions around it. Leveraging such models to create, maintain and enhance business relationships is the responsibility of ERP adopting organizations. Building this as a primary goal in the design objective can go a long way in meeting the organizational goals involuntarily. Solutions around system-initiated statement of inquiries, digital acknowledgement notes, balance confirmation statements, transaction messaging etc are some examples. They can have a big impact on time/process optimization and relationship building benefits in this fast-paced business environment. Inclusion of some of these communication channels as part of the solution map can be a dual win for the implementation – of automation and ERP enabled relationship exposure.
Role of Management - The role of management in ensuring the ROI is encashed appropriately gains a lot of importance. While, the management’s engagement is observable at the project inception, the role assumes greater status in the later stages of the project implementation and system practice –
Staying committed to the ERP objectives, during the course of project and through the years following the deployment is of great significance. This, apart from, ensuring sustenance will also encourage continuous evolution of the initially deployed solution in alignment with the business environment.
Few mindful steps and many miles ahead in the ERP journey!!!