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The tech world is fond of a good acronym. While most of them make a degree of sense when spelled out, ERP (enterprise resource planning) manages to remain as inaccessible in its longer form as it is in its acronym form.
In essence, it’s the software and systems that underpin and support the many daily activities that make up business operations, from accounting to manufacturing.
When used the right way, ERP systems can be empowering, but poor installations are so common that the very mention of ERP is enough to elicit groans from even the most battle hardened of IT managers.
In this article we burst some of those perceptions and highlight how ERP can be invaluable to driving innovation in your company.
Ways to Innovate Using ERP
Arguably the biggest benefit ERP brings in terms of supporting innovation is freeing up time.
Any innovation effort will require time, energy and other resources, and ERP frees up those resources in a number of ways.
The biggest innovation benefit of ERP is freeing up time. Click To Tweet1. Consolidating Many Distinct Systems into One
Many organizations use dozens of different IT systems, each requiring managing and maintaining. With effective ERP, you bring all of those systems under one roof, thus reducing redundancy and making it much easier to manage. It also makes it easier to look across the entire organization for processes that can be improved.
2. Providing Access to Information
The most innovative businesses need employees to make decisions at the frontline. To do this, those employees need access to the right information, at the precise moment of making their decision. They can’t hang around waiting for approval or for due processes to take their course. ERP can provide the right people with the information at the right time.
3. Learning What to Stop Doing
As with many technologies, the key is to develop new processes and standards. ERP is no different, and it will allow you to reevaluate a range of business processes to ensure they work well with the new ERP system. This can be a valuable process in itself as you’re almost certain to stumble across redundant processes and ones that are holding your organization back. Breaking with the past is as important for innovation as forging the new, so this should not be underestimated.
Agile management may be associated with startups, but innovation has always been agile. Click To Tweet4. Focusing Resources
A natural consequence of stopping various processes and activities is that it frees up resources for use in new and exciting ways. By driving efficiencies across the business, you can allocate resources that are so crucial for innovation to flourish.
5. Supporting Collaboration
ERP systems provide fantastic real-time information on what is happening in your business, and who is responsible for it. This will allow you to identify the right people for every project and ensure that innovation is suitably resourced.
To achieve these benefits you will need to overcome some common pitfalls that trip up many ERP projects.
Tips for Success with ERP
Investing in ERP can set you apart from your rivals and give you a real innovation boost. Click To Tweet1. Take Your Time for Successful Implementation
ERP systems are complex, and a successful implementation will require time.Time isn’t something many enterprise innovation managers have much of, properly installing an ERP system will not be a quick fix. This is especially true as the real value will come when new processes evolve around the installation.
The key will be helping employees develop processes around the new software. It doesn’t matter if you’re installing a new ERP system or updating an existing one, you will need to give them time to adapt. You can do this by not unloading the new system on them in one go.
For instance, you might decide to roll things out in a particular region or region first. You might also decide to use a cloud based solution due its relative easy of implementation.
2. Be as Agile as Possible
Agile management may be associated with startups, but innovation has always been agile. Ideas become prototypes, which are tested, improved and turned into products. It’s an approach that is the opposite of the traditional waterfall method. If you want your new ERP system to support innovation, it’s vital that it is as agile as your innovation efforts. It sounds obvious, but you want a system that supports agile working and doesn’t force employees to enact workarounds.
3. Be Serious About Post-Implementation
An ERP system can be the most complex IT system your organization uses. Installing it can pull in representatives from all departments and regions. It can consume huge quantities of time, energy and resources. It’s understandable to want a breather once it’s finally installed.
That’s a mistake though, as post-implementation is the most important bit. You’ve only run half of the marathon by installing the system. Now the crucial work begins on making sure teams use it, and that it supports their work.
You've only run half of the ERP marathon by installing the system. Click To TweetFar from taking a rest, the project team will need to continue working to ensure the goals of the software are met. If it’s designed to support performance and innovation, is it doing so? Have you conducted that kind of audit? Is there a facility whereby best practices can be shared?
The idea is to have a system that supports improvement and innovation long after it’s been installed. Make sure you measure it against that goal.
4. Have Realistic Expectations
When you invest in your software it will be portrayed as a magic wand. Whatever problem you have, it will fix it and then some. That is largely sales talk, all ERP systems require a lot of hard and unglamorous work. They require effort to change the culture, behaviors and processes employees use so that they get the best out of the software.
ERP systems can do some great things, no doubt about it. It isn’t easy though, and won’t happen just because you’ve bought the technology. Your new system will almost certainly have great features and amazing functionality, but don’t buy it and forget it.
Investing in Innovation
Gartner recently estimated that 75% of ERP projects will fail to deliver a good ROI. However, Investing in ERP can set you apart from your rivals and give you a real innovation boost. By following the tips outlined above you’ll avoid some of the pitfalls and ensure your efforts pay dividends.
