An ERP system (or enterprise resource planning) is a platform for gaining and sustaining business excellence. Excellence in business is more important than ever in a global economy where international competition is intensifying and holding on to a competitive advantage is increasingly difficult. When properly selected and implemented, an ERP system can enable business excellence in areas that include:
- Excellence in Financial Management and Compliance
- Operational Excellence
- Business Process Excellence
- Knowledge Management Excellence
- Teamwork and Collaboration Excellence
Let’s take a deeper look into each one of these areas of excellence.
Excellence in Financial Management and Compliance
Great financial management has always been a core need of businesses. Great ERP systems enable both the transactional and reporting aspects of financial management, while also providing a complete and accurate audit trail that enables regulatory compliance. ERP systems are perfect for coordinating data from finance, sales, and operations which can all be reported simultaneously with great precision and insight.
ERP systems developed as an extension of traditional MRP software (material resource planning), which was used in manufacturing and production planning. MRP systems drove many of the early improvements in manufacturing and supply chain processes. ERP selection processes should carefully consider the operational needs of their particular vertical industry.
Operational excellence equates to improvements in quality and responsiveness as well as reductions in production costs and processing time. All are crucial to competitiveness; ERP systems are the platform on which operational excellence is built. Strong ERP systems that include complementary modules such as CRM (customer relationship management) and CAD (computer-aided design and engineering) further enhance the ability to achieve operational excellence.
Business Process Excellence
ERP systems are increasingly delivered with pre-built configuration templates for industry best practices. In nearly all ERP systems, workflows facilitate increased process efficiency, automated approval routing, improved process consistency and audit compliance. Best practices often set a baseline for staying competitive. Where possible, differentiation moves beyond best practices to something that sets your company apart.
Successful companies develop a culture of business process excellence as well as continuous process improvement. If a company doesn’t have excellent business processes, it could quickly find itself losing market share to the companies that do. Process improvements can and should happen before, during, and after your ERP implementation. ERP systems with associated functionality for business process management (BPM) and workflow are essential tools for supporting excellent business processes.
Excellence in Knowledge Management and Business Intelligence
When a customer requests an order status, the ERP system should be the first place to visit because it provides real-time, comprehensive information. The need for improved access to information and a more complete data-set has historically been a key driver behind many ERP selection projects. The high-level capacity of today’s fully integrated ERP systems enables reporting that is increasingly real-time, accurate, and comprehensive. ERP systems are the alternative to disjointed, data silos and provide a single source of truth (S.S.O.T.) that enables an organization to be smarter, more responsive, more efficient, and much more effective.
Teamwork and Collaboration Excellence
Lastly, a key strength of high performing organizations is high-performing people working collaboratively where the value of the whole is greater than the sum of the parts. ERP systems are the foundation for high-performing work teams. ERP systems enable collaboration across boundaries of function, geography, product group, market focus, and language group. This allows for high performing work teams that excel because they have the best information and best tools. An ERP system is only a tool, but in the hands of your company’s high-performing workforce, an ERP system is a catalyst for excellence. An informed, effective, collaborative high-performing workforce is a significant competitive advantage that your ERP system and organizational culture can help to establish, support and sustain.
An ERP system truly is the platform on which your business can pursue and deliver excellence. As Tom Peters, best-selling author of In Search of Excellence has said: “If not excellence, what? If not excellence now, when?”
Hopefully you see at least one next step for making your organization better, if not excellent. Please take the next step to business excellence.
Blog entry written by Greg Griffith, Project Manager at Panorama Consulting Group.