First Impression: Nightmare or Godsend - The how and why of ERP

With all the talks of Oracle-PeopleSoft and JD Edwards headlining the business pages, and the ceiling bound stack of papers on my desk listing issues with our very own implementation, the topic of my column was a given - ERP.

ERP stands for Enterprise Resource Planning and what that actually means differs to each user of the term. In IT circles the abbreviation is synonymous with "God-send" whereas in large companies, the word "nightmare" pops up a lot. Why nightmare? Well, lets start at the very beginning...

Like any marriage between two entities, the most crucial step of going the ERP way is the selection process. Your first option is to have your IT head or CIO put together a list of requirements and evaluate packages for a good fit.

However, some might opt to bring in an external company to study the current business processes in place and recommend a suitable package. If you are planning an ERP implementation and do go this route, remember that while an expensive option, you will have expert consultants with a larger knowledge base identify the software package that would best suit your organisation and industry.

It will also put you in the habit of paying large sums of money for your IT- think of it as a warm-up exercise. Once you've picked the package you'd like to have, relax a bit while your CFO haggles with the vendors only to duly inform you what package you can afford to have.

Implementation partner

Once you've finally picked your product, the time comes to evaluate your implementation partner. Most packages have preferred implementation partners who have implemented such ERP solutions and hence the decision should be rather easy. So should the other decisions on whether you should get the HR module, Business intelligence, the promised life-altering CRM package... you get the drift. If it's a tier one package you're looking at, be prepared to watch the digits rise, with a dollar sign before it, and a MM sign after.

Now for the hardest part of the implementation - the implementation itself. Any company planning to adopt ERP as a part of their lives must at all times remember one word - "teamwork." Tattoo it on your foreheads if you must, or chant it in your sleep. The worst thing a company can do is to assume that ERP is something that is going to be generated from their IT division. A full implementation will take anytime from 8 to 18 months to put in place. Sometimes more.

The implementation team consisting of the best and the brightest in each division, should be relieved from daily duties and forgotten about.

Manual intervention

And I can't stress on this enough - don't scrimp on your people or else you might as well toss those few million dollars out the window. Once you've signed a few checks for equipment to kick-start the implementation (not to mention post-implementation bonus checks), the horror starts.

The largeness of your company is directly proportionate to the number of phone calls you will receive on a daily basis about how the implementation is failing behind your back, and oh gosh!

Hadn't you heard of those two (or was it three?) multi-million dollar powerhouses that are miserable after implementing the identical package as you? And what about those larger Multi-nationals that are now extinct because of it?

And who did you say is doing your implementation? Tsk tsk. You guys didn't really research this very well did you?

As the go live date approaches... then passes... then approaches again, then passes again...you'll wonder (yet again) why you set yourself up for this. I'll tell you why. There are many reasons a company opts for ERP package but the simplest one usually applies to all to get their house in order. Picture this: think of all the data you have lying around in your office - finance, production, logistics, HR. Currently, most systems require a lot of manual intervention when it comes to collating data and a lot of box files when it comes to storing it.

Imagine being able to collect all your data in one place where loss or damage cannot affect it. Imagine having clean monthly reports where the figures are as close to reality as possible.

Imagine getting all the information you need at the click of a button without having to threaten the lives of a few accountants who swear the earliest you can get that report is the day-after-tomorrow. Utopia? Or nightmare?

The author is Director of Marketing and Communications of Jumbo Electronics.