Say goodbye to the devil you know

MANY organisations are choosing to live with high IT costs and inefficiencies over making a new investment in ERP, holding onto their “old” profit-draining systems because they fear the costs associated with a new implementation.


However, for companies using a multitude of unintegrated systems, the complexity of the environment creates an expensive cost structure that is difficult to reduce.

From a supply chain perspective, there are three common goals of businesses looking to make an investment in ERP. These are to:

Reduce inventory levels,

Improve customer service, and

Achieve operational efficiencies.

Realistically, implementing sophisticated technology won’t automatically lead to supply chain optimisation.

According to David Caruso, senior vice president of research at AMR Research, the significant reduction in costs presents a strong business case for an investment in a new integrated system.

“To its credit, the ERP backbone provides a necessary platform for a competitive advantage,” said Caruso. “Savvy executives looking to create a competitive advantage need look no further than their financial statements to see where ERP systems can provide a positive impact.”



ALTHOUGH there are horror stories, there are also many well-documented ERP successes. But what makes or breaks an ERP implementation?

Brett Crew, director of professional services at Scalable Data Systems cites the experience of the partner you choose as an excellent predictor of the speed and success of your implementation.

“You need a partner who can offer a practical approach, one who has real industry experience, not just product experience, and who understands the complexities involved in making ERP work.”

Crew also says that implementing ERP in stages can provide better results in a shorter timeframe and with minimal disruption to business.

Scalable Data Systems utilises the functionality and modular design of Microsoft Axapta to implement key modules in a practical sequence.

“This decreases the initial cost and allows companies to realise a return on investment at each stage of the implementation,” said Crew.

According to Crew, most of his customers can continue business as usual throughout their entire implementation, including the day they go live.



A COMMON driver for system change is the pain caused by changing customer requirements, as clients demand improved service levels or better system integration.

When assessing current systems, first look at customer response time. Many organisations are poor at responding to customer requests, from simple product questions on price and availability to more complex needs involving delivery schedules for large, complex orders.

Crew recommends you should look at how many spreadsheets and databases you operate outside your core system. “If the process becomes about entering duplicate data and increasing the manual workload, your system isn’t optimal.”

To analyse whether you need a new system, Crew advises that you start by recording and defining the pains your organisation feels and look at seeking the assistance of a professional to pinpoint the areas that are causing the pains.

“Many executives have found the process empowering from a decision-making perspective,” he said. “You get a comprehensive analysis of the strengths and weaknesses of your current systems and a report on where potential improvements and costs reductions can be made.”

Ultimately, ERP succeeds by delivering goods and services to the customer, while remaining profitable, growth orientated and efficient.