CUSTOMatrix™ Insights Newsletter

Missing The Mark    (Part Two)

Steve Petersen, Associate, Strategic Services, CUSTOMatrix, Inc.

Implementing an ERP system is a critical, complex process that has been likened to changing an airplane engine while in flight. Imagine replacing an airplane engine in flight with an engine that is unsuitable for the plane or reduces its power to a point of causing a crash.

Business processes are the heart of a business and express the competitive functionality of a business, often in subtle unappreciated ways. Too often software suppliers, project team members, and even well meaning business leaders suggest that ERP software be implemented with zero modifications. Although this approach can simplify and reduce the cost of the implementation, the result often diminishes the capabilities of the organization.

The desire to present a less costly, shorter length project is usually the motivation as tailoring software to an existing key process can be complex and require many additional dollars in analysis and programming costs. It is highly recommended that the additional time and money required to preserve the integrity of the organization’s competitive advantage is budgeted prior to project approval.

When evaluating how to apply an ERP solution to each business process consider the true effect of the business process in terms of competitive advantage and to what extent the process demonstrates or embodies expert knowledge and/ or specialized tactics.

When considering competitive advantage be aware of the two types: cost advantage and differentiation advantage.  Cost advantage occurs when a company delivers the same product or service at a lower cost than a competitor while differentiation advantage occurs when a greater service is provided at the same cost as a competitor.

An example of a key process might be customer-specific customization of product packaging through a dynamic automated BOM configuration process in the current installed software. Reverting back to a manual process would take away the cost and speed advantage inherent in the process. This is also a good example of ensuring that the software selection process yields a solution that is as close as possible to the needed functionality.

The obvious first time to consider these issues is during the software selection process. It is at this time that every business process within each functional area needs be rated in these terms and those that demonstrate key knowledge and expertise need be identified and prioritized.

In the end closely modeling key business process functionality must take precedence over the efficiency and cost goals of the implementation process.

In summary:

• Understand the meaning and nature of competitive advantage;

• Consider the true effect of each business process in terms of competitive advantage prior to software selection;

• Once identified, prioritize and focus on these key processes;

• Budget necessary additional time and money required to preserve the integrity of the organization’s competitive advantage;

• Give precedence to closely modeling key business process functionality over the efficiency and cost goals of the implementation process.

CUSTOMatrix is here to assist beginning with the business process review and ERP selection process through the implementation and go-live stages. Please feel free to contact any of our consultants to discuss all of your ERP project needs and to receive a competitive project proposal.

CUSTOMatrix™ has a number of such talented individuals available and ready to assist. It is often practical to utilize such expertise on a sliding level of active participation, with heavier involvement on the front-end of the project, preferably beginning in the selection phase, with a gradual reduction in man hours as the project gains momentum.

Should your organization be interested in increasing its revenue or evaluating the effectiveness of it marketing investments CUSTOMatrix Consultants can assist you in assessing your situation and recommending a course of action.

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