If your organization is implementing an ERP system, then you understand the benefits it can provide to almost every business process. Improving business processes by implementing ERP software, may seem like a huge accomplishment – and it is – but it’s only the beginning of achieving operational excellence.
In fact, benefits realization should continue many years after go-live as new organizational goals are identified. As soon as you begin the journey of selecting an ERP system, we recommend establishing an ERP center of excellence.
What You Need to Know About an ERP Center of Excellence
A center of excellence is not only relegated to ERP systems. Centers of excellence are born out of a need to establish areas of expertise for certain business functions, such as project management, business intelligence, IT or research.
This begins with the concept that there are people, facilities and other resources that can provide leadership and best practices for a particular area or discipline within an organization. If those resources can be pooled to maximize efficiency and return on investment, then your new ERP software will have the longevity to support a digital transformation.
The 2021 ERP Report
This annual report summarizes our independent research into organizations' selection and implementation decisions and their project results.
An ERP center of excellence is designed to support continuous improvement after an ERP implementation. For example, it can ensure alignment between changing business requirements and ERP system design. It also can proactively identify potential process improvements. Other roles that an ERP center of excellence might play include management of system upgrades and deployment of end-user training to develop new organizational capabilities.
Organizations should ensure their ERP center of excellence touches every area of the operation where the ERP software has functionality. They also should designate business process owners within the center of excellence to ensure continuity and continuous improvement.
6 Benefits of an ERP Center of Excellence
Extends the Life of Your ERP Solution
An ERP system is an investment your organization makes with the intent of receiving a significant return. Aligning ERP system design with new business requirements ensures you attain a high return on investment.
No one buys a laptop computer with the intention of discarding and replacing it six months later. There are operating system upgrades, new software and additional peripherals you might add in order to extend the life of the computer. In the same way, your ERP system should support your organization in the long-term, even though your organization likely will look different five years from now than when the system was first implemented.
A center of excellence ensures a continual focus on business process management after go-live. This is critical if you want your ERP system to support future business needs.
Reduces Long-term Reliance on ERP Consultants
Using ERP consultants when selecting and implementing an ERP solution is wise, as it provides external expertise and an outsider’s perspective to help your organization understand what to expect.
However, once consultants have helped you establish a center excellence and develop organizational capabilities, you will have the tools and expertise to continually make effective use of new digital technology.
Allows Greater Flexibility When Adapting to Change
The adage that no one likes change is especially true when organizations implement a new ERP system. A center of excellence allows you to anticipate organizational changes while being mindful of your organization’s culture.
A organizational change management plan is easier to develop when you have in-house expertise dedicated to the ERP project. These team members have intimate knowledge about the organization’s culture and can use this to assess employees’ readiness for change.
Ensures Organizational Alignment
Another benefit derived from a center of excellence is the alignment among operational areas in terms ERP project goals, resource allocation and prioritization.
Operational silos are a natural byproduct of a lack of proper communication and collaboration. A center of excellence encourages cross-functional collaboration, which ensures alignment between operational needs and technical capabilities.
Ensures Resource Optimization
Once stakeholders are on the same page, you can determine what areas resources should focus on to provide the greatest return on investment.
Many organizations unwittingly waste resources because they don’t prioritize functional areas. A center of excellence can be charged with making decisions that allocate resources in a way that provides the most benefit.
A center of excellence promotes accountability by ensuring all business demands are balanced in relation to available resources, business values, commitments and future needs.
When held accountable, project team members are more likely to address issues with an understanding of resource allocation needs and organizational objectives.
Is it Worth the Investment?
While centers of excellence can be used for several different organizational functions, a center that is dedicated to the longevity of an ERP system is certainly worth any additional investment.
Panorama’s ERP consultants are experienced in establishing ERP centers of excellence as part of organizations’ ERP implementation plans. We help organizations develop the capabilities to evolve their ERP software and business processes as their organization grows and changes.