Is your Supply Chain ready for ERP Implementation?

The decision of implementing an integrated all-in-one ERP package is not always an easy one. Some companies have decided to invest in an all-in-one ERP package, as Colgate-Palmolive did with SAP R/3. For some other organizations committed to SCM, an ERP integrated package may not provide the best solution for a function of the business they believe is crucial. The organisational excellence exists within three critical elements, People, Processes and Technology.  If we summarise it, the bottom line is the people who make it happen.  People who create or customise processes aligning with organisational goals, Technology may come with some bells and whistles but the critical aspect is the people who make the difference and make the technology work in alignment with the processes that were customised to organisational goals.

Sadly, in search of competitive advantage organisations search for the best-of-breed SCM or demand-forecasting software. Let us be clear the best of breed ERP cannot address your organisational functional needs in total. For example, BOEING, uses demand-forecasting software by i2 Technologies, ERP by Baan and product data management by Structural Dynamics Research while developing EDI links and Internet applications to be used by its suppliers and customers (Source: Stein and Sweat).

Did your Company address the ERP implementation roadblocks?

The implementation of ERP systems across the supply chain is a complex and time-consuming process. The biggest challenge for progressing as per plan in ERP implementation is the Change Management. Apart from change management various technological and organizational issues must be managed to mitigate the risk of failure. As mentioned earlier, for the successful implementation of ERP packages under SCM practices, the required organizational change, through corporate cultural transformation, is crucial.

Change Management: Change management is a collective term for all approaches to preparing and supporting individuals, teams, and organizations in making the organizational change. Source: Wikipedia.

Change Management made simple! 

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Trust between partners – Willingness for information sharing: In many organisations information is stored in individual brains instead of a repository. This makes implementing ERP very difficult. The answer is to prepare the SOP (standard operating procedure) and this will all to understand how the business process flows through the organisation seamlessly. It has been pointed out, that for any form of business structure that is built on partnership, the application of economic chain costing, and therefore business optimization, requires information sharing not only inside a company but between the companies that formulate the partnership. (Source: Drucker).

Team-work – Communication skills: “Talent wins games, but teamwork and intelligence wins championships.” Team-work is a critical element in the implementation of any ERP system. The key to the success is cross-functional teams working towards the common goal. The silo approach will deliver disastrous results, simply because the information has to flow through various functions of the organisation and supply chain management is the heart of information that collects and distributes throughout the organisation.

Transformational leadership: Every manager is not a leader and every leader may not be the manager. What we need is Transformational Leaders – “A little thing is a little thing but faithfulness in a little thing is a great thing”.  Thought leaders never ignore any little thing, everything in the process of implementing ERP is critical and the leaders have to be hands-on in handling and implementing the ERP.  If they take an off-line approach, the outcome could be devastating. Someone rightly pointed out that, “Intellectuals solve the problem, genius prevents it!”, the transformational leaders should be genius.  A transformational leadership, committed to the continuous effort needed for the successful implementation of ERP systems, must resolve conflicts and properly manage resistance not only to new technology but also to new work relationships. A true transformational leader may have to follow the people first to make them follow the leader. Coordination of individual needs and goals must be planned carefully first, then it is easier to coordinate individual technical skills required for successful ERP implementation.

In summary, ERP is the unavoidable monster who can turn your business into a seamless organisation connected with the suppliers and clients and all cross-functional stakeholders.  The road to success is hard and people will resist, as the organisation crosses the point of no return, the leaders in every sphere of the organisation have to take the accountability to make sure that they reach the goal and successful.