5 tips for setting ERP project requirements
When preparing for a new enterprise resource planning (ERP) selection and implementation, the first step must be about setting requirements.
And these requirements should reflect not only today’s needs but the needs for tomorrow as your company grows and evolves.
Why set ERP requirements?
Many of the project teams that partner with Ultra have identified the limitations of their current enterprise systems.
Whether it is data redundancy, siloed or standalone systems, an abundance of manual workarounds or other challenges, an integrated ERP system is required to better link together the business processes of the organization so it can operate more efficiently.
Wise enterprises look to engage with expert independent consultants.
After identifying these limitations and deciding to embark on a new technology project, it is tempting to jump right into reviewing demos from vendors. However, taking the time to carefully look at setting ERP requirements is critical to identify solutions on not only immediate needs, but also have the ability to scale to meet future processes.
The need for new technology and the list of ERP requirements take many forms.
In some cases, companies seek improved shipping and receiving functionality. In other cases, companies are in highly regulated industry verticals such as pharmaceutical and food and beverage processing, which require specific compliance and track and trace options.
Distributors have their own unique needs when it comes to streamlining operations via ERP. Enterprises will have different ERP requirements with a different solution tailored to the industry and its specific requirements, and importantly, the enterprise’s future state.
Regardless of the scenario, it is important to find an ERP system able to meet the performance expectations the company’s internal stakeholders have identified.
Five tips to setting ERP requirements
Looking at each functional area, the project team reviews the problems in the current state and identifies best practices and ERP requirements for improved business processes in the future state to eliminate waste and improve productivity. The team thus develops a business case for change.
In such a business process improvement project looking at ERP requirements, there are five areas of focus:
1. Project organization
With a team of business process owners, the first step is to determine the project scope, ERP requirements, objectives, and measurements for the engagement. This leads to a business process review to define strategy, determine the maturity of sales and operations planning, and complete management scorecards, which identify current key business metrics and determine future requirements.
2. Current state analysis
Analyzing a company’s current state requires gathering key performance metrics and determining their value. Examples include productivity, quality, overtime, inventory, and others. As the team reviews the current state, business process maps are created such as quote to order, order to cash, and procure to pay processes.
3. Vision and education
Before the future state can be defined, process owners need to understand what is possible with a new enterprise software solution and which ERP requirements are associated with each process.
4. Develop the future state
Looking at each business process flow allows companies to identify gaps between the current state and industry best practices to effectively design future state business processes. The goal is to eliminate waste and improve productivity.
5. Business case for change
Each of these steps leads to the development of the business case for change, which is the main driver and the foundational justification for an ERP project.
This article originally appeared on Ultra Consultants’ Blog. Ultra Consultants is a CFE Media content partner.