Over the years, ERP has evolved from being less engaged in resource planning to become more of a business operations management system. ERP has progressed past being used for reporting and today is used for defining business strategies. It is found in almost every corner of the enterprise, touching C-level types, directors, managers, supervisors and clerks. It is this touching of so many people within an organization that has made the latest progression in ERP so long overdue: role-based ERP.
What is Role-based ERP?
Role-based ERP delivers the specific information required for each person’s role in a company to execute the assigned business functions.
- Performance measures
- Access to information
- Process execution
Before role-based ERP, people using an ERP system were required to know and understand many processes, many functional requirements, and many tasks beyond those required for their particular jobs. They had to know all of this to just get the information they needed. In addition, the reports these systems generated were very large and meant for meeting several information needs at once. They frequently required careful interpretation prior to making strategic decisions based on the data reported because there were so many versions of the truth. A single report might serve the needs of several people, several departments or several divisions.
Rather than packaged, ready-to-use information, these reports contained something closer to raw data. You really had to understand many hidden and sometimes highly esoteric factors to use the reports correctly.
It’s All About You and Your Business
When you go to the store to buy clothes, you don’t just grab some items off the first rack by the door and head to the cash register. The process involves some evaluation and consideration. What is your size? Where will you wear the clothes? What are you going to do when you wear them? What’s the climate like? You buy based on what your needs are.
Role-based ERP is the same. What you get is what you need. Systems are designed to match the things you actually do. The data supplied to you is directly relevant to the decisions you make. The system facilitates the execution of your job. Rather than adding complexity to the job, role-based ERP systems support the job.
A recent research study conducted by graduate students during 2010 at the George Herbert Walker School of Business and Technology of Webster University illustrates the potential of role-based ERP systems to transform enterprises. Based on interviews with members of ERP user groups, the results indicate that early adopters of role-based ERP systems are gaining the following competitive advantages:
- 36-percent greater accuracy in inventory management as measured by error reductions
- 59-percent increase in quote-to-order performance based on transaction accuracy and performance
- Piloting of project-based ERP systems for supply chain management (SCM) show increased collaboration and greater cost per order reduction. The study found an 18-percent in SCM costs during the pilot programs now underway.
In addition to these benefits found from the Webster University study, the advantages of role-based architecture are numerous. Let’s look at a few.
Training – Learning to handle individual roles is vastly simplified if the role does not require learning beyond the requirements of the role itself. That receivables clerk just needs to learn about processing receivables rather than learning the ins and outs of the entire finance system. This means that new hires are productive sooner, implementations are delivering advantages sooner and more cross-training time is available to assure an adequate level of redundancy within a department.
Security – Let’s face it, whenever an employee leaves an organization, a lot of proprietary information goes with them. Most folks are honest and don’t go out of their way to divulge your trade secrets, but it does happen. Role-based limitations limit access to the “big picture” to those who really need it to do their jobs. This limits the unnecessary exposure of proprietary information.
Better Execution – Because actionable information is delivered to each employee/role based on their requirements and needs, they will spend less time sifting through data and more time planning and executing. Managers will reap the same benefits that clerks do in the area of reducing the chaff around their jobs and increasing access to actionable information.
Better Management – When you are able to define the parameters of a job effectively, the person in that job will more fully understand what is expected of them in terms of performance. This facilitates better measurement of employee output, quality of output and it isolates areas that need attention. You have tangible, measurable factors to evaluate rather than subjective feelings or gut impressions. Problems become evident sooner allowing fixes to be implemented, which minimizes the negative affects of the problem.
Economy – It only makes sense that roles utilizing less ERP resources would reflect lower fees and resource overhead expense. This is very good news in terms of the run rate associated with large ERP systems.
If you are looking at a role-based alternative, be sure to look for systems that don’t tie you into rigid, pre-defined roles. People change over time and so do the jobs they do. Tasks and responsibilities are added and taken away over time. In many cases, people have multiple roles and will require multiple views of data, processes and executable functionality.
The support system must be flexible enough to change with the changing needs of the user. An accounts receivable clerk position at one company may be vastly different from the accounts receivable position in another company. Their ERP needs will likely vary as well.
Correctly implemented, role-based ERP delivers flexibility, reduced complexity, enhanced responsiveness and increased effectiveness.
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