Enterprise Resource Planning (ERP)
ERP systems are a vital means of capturing the data and providing the information necessary to manage a complex business organization.
ERP systems are a vital means of capturing the data and providing the information necessary to manage a complex business organization. The constraints inherent in such a complex system, however, severely limit the quality of cost information needed to support the myriad of cost-based decisions faced by management. By developing a conceptually valid, cause-and-effect-based cost model of the organization, constructing a physical model to perform computations in accordance with that model, and then marrying that model with the company’s ERP system, an organization can enhance the quality of its decision support system; a move that will ultimately improve the quality of its decisions and enhance its bottom line.
BBS, as specialists in Finance, Cost & Management Accounting with a strategic focus on performance management, can steer ERP projects towards success. We act as a subject matter expert to the Project team members who will help the Functional consultant’s team to understand the client’s requirements with clarity. Our industry-specific knowledge help brings Industry best practices to the project, thereby increasing project ROI. Our in-depth expertise of operational and business processes can help businesses realize the benefits intended. We also offer Post Implementation audit services to evaluate ERP project success.
The business has to carefully select ERP software, plan the implementation, implement with the right mix of business processes and manage the changes & improvements thereafter. Our role is crucial to bridge the knowledge gap between the business & the implementation partner, thereby improving the effectiveness of ERP projects. BBS with our industry-specific knowledge & project cost management skills can act as a catalyst by maximizing business benefits and improve project ROI. In order to sustain the maximum benefit, the first thing required is to understand and define the business model and identify the various segments/key drivers. Most of the ERP packages are equipped with the flow chart of various processes(viz. SAP uses Event-Driven-Process-Chain- EPC). If the business model is accurate, then all tasks, events, users etc can easily be integrated and comparison with the desired target can be quickly made.
Implementing an ERP for any organization, in a structured manner, will bring about cost advantage, and therefore a company can just relax after implementing such a system. The system requires close monitoring or observation methodology in order to obtain the maximum benefits or competitive advantage. In order to gain the maximum gain implementation methodology should be perfect.
The methodology in short is depicted as follows:
- Identification of the Need
The very first step of implementation of ERP is toidentify the requirements or reasons and whetherintroduction of it will generate additional profit to thebusiness. Therefore, the first condition comes in themind is the profitability. The next to follow is the cost and timeeffective, i.e, whether this will reduce the delivery time or cost of the product and also ensure effective checks and controls in place.
- Evaluation of Existing Business
The secondary step is to evaluate the existing businessinfrastructure/process thoroughly in order to get a clearpicture whether the software packages like ERP can beinstalled and accommodated within the existing resourcesof the organization. Various business functions such asprocurements, sales, distributions etc must be illustratedand Process Map should be prepared. Process Map willdeliver the information about the number of departmentsand their locations, number of decision points, timerequired to complete a business process, number ofreporting points etc.
- Fixing the Desired Target and Re-Engineering the Business
This step requires the business to be well acquainted withthe desired areas which it wishes to achieve. Generally thedesired target is compared with the industry standardsand encompasses the areas such as cost, lead time, qualityetc. Other areas to look out is to match up the existingbusiness process with the newly accommodated businessprocess and if there is any mismatch, reengineering of the business is laid down to fill up the gap.
- Evaluation of ERP Packages
ERP software packages is be evaluated under different terms, such as, the global as well as local marketacceptance, whether further improvements or updates and timely service supports are available in future, adaptability in the targeted areasof operations, price, cost and ease of implementation andpost implementation support. Continuous improvementsin the R&D areas of the packages are one of such a crucialcondition since the business world as well as its operations are always highly dynamic.