How To Improve Enterprise Resource Planning?
It’s come to that time of the year when a good business owner sets aside some time to evaluate the goals and ambitions of the business. If you’re a great business owner, you would be doing this more than once a year but who has the time? The cold fact of the matter is that if you’re not taking the time to analyse and assess the direction of your business, and ensuring that your resources are synergising with it, you start to lose your competitive edge. It’s very easy to fall into complacency when all is going well and the money is rolling in. That is, however, the best time to spring clean, spruce up, and oil the machine – not when a crisis is looming. Many businesses today are lurching from crisis to crisis. Going through the health check process is like giving your Enterprise Resource Planning (ERP) business a vaccination. It may not stop a crisis from coming out the blue, but the business will be far better equipped to handle it and come out the other side stronger.
How To Start
Firstly, identify ‘process super users’ within your business. These are people who have a good grasp of their particular set of processes within their department. Designate them to oversee the analysis process. Even in a small business, your person handling your till or cleaning the office can make useful contributions, but more on that later. It is important to realise that company resources fall into two main groups – animate (or human) and inanimate (or non-human. Let’s look firstly at the easier of the two:
These can consist of:
- Physical resources, such as raw material and finished goods, buildings, modes of transportation, storage facility, machinery, furniture and IT hardware.
- Intellectual resources, such as your brand, patents, copyrights, partnerships, and IT software ie customer/inventory databases etc.
- Financial resources, such as cash, credit, overdraft facilities, etc.
Designated stakeholders need to look at issues such as:
- Within the manufacturing process are raw materials being resourced in the most cost-effective manner? What may have been a good deal six months ago may not be the best now.
- Your finished goods, are they the same standard as before? Higher or lower? How can they be made better, cheaper or faster?
- Your buildings and storage facilities – are they compliant with current municipal or government regulations? Do they constitute a pleasant working environment? Your location – is it time to look at relocating due to expansion needs or security issues? What are alternative options around managing these? Explore short and long term ideas.
- Following on from the above point, is your furniture ergonomically designed and positioned to support and maximise your staff’s energy and workflow?
- Your machinery – are your maintenance schedules up to date and current? What are the options for improving these? Is there equipment emerging in the market, the implementation of which would effectively impact your bottom line?
- Transportation – again, are your maintenance schedules on track? Examine which is more cost-effective – to outsource or use in-house transportation for your goods.
- IT hardware – in this fast-paced sector, is your physical IT structure helping or hindering your business. How well is your physical equipment secured or maintained? Again, onsite or off-site possibilities must be considered.
- Ensure your brand, patents, copyrights, partnerships (both internal and external) are up to date and relevant.
- Is the documentation of business processes and training material up-to-date?
- All documentation whether it be a process, training or contractual paperwork must be easily retrievable either physically or electronically.
- Is your software due for an upgrade? What are the consequences of not doing it?
- Pay special attention to ensuring the effective risk management of your software. All too often valuable company resources are lost due to the lack of an effective information backup or data recovery strategy or something as silly as the payment for a domain name being forgotten and it is purchased by another party who then holds the business to ransom for the return thereof.
These are items such as cash, credit, overdraft facilities, etc. Is your current bank offering the business the most effective solution or is it time to change? Keep everything with one bank or spread the load? Also look at how solutions like Paypal, Zapper, Snapscan, etc. can effectively enhance the business and make it easier for customers to make payments.
Secondly, let’s look at the second group which consists of animate resources. This area should be marked with a huge HANDLE WITH CARE sticker. Humans are naturally resistant to change and thus any changes proposed must be handled with sensitivity and in consultation with the affected parties.
Areas to look at are:
- Are the right people in the right positions? If not, will further training resolve the issue or do they need to be moved to a position more suited to their capabilities?
- Consider, if all other options fail, to then follow due process to release them from employment.
- Consider implementing the Kaizen approach which is typically applied to measures for implementing continuous improvement. This can help spread the load on your process super users as it encourages all employees to contribute to the improvement process at all times. All personnel can have something valuable to contribute to the improvement of the business.
This article is by no means all-encompassing but hopefully gives ideas on where to start looking at improving ERP. This gives businesses the best chance at retaining their competitive edge and contributes directly towards the survival and success of the business.