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Don’t go down the ERP path until you’ve thought about this

Home Transport & Logistics Don’t go down the ERP path until you’ve thought about this

By JP van Loggerenberg

FROM the pandemic through to trade conflicts and the Russian-Ukrainian war, manufacturers and distributors have needed to thrive in a state of constant chaos for years. Supply chain disruptions have led industry to find digital solutions to remain resilient.

The question is whether businesses have made the right investments and what they should be thinking about to engineer a bounce-back.

To answer these questions, SYSPRO conducted a research survey which assessed the sentiment of 163 manufacturing and distribution industry professionals of different managerial levels within Europe, the Middle East, and Africa, the Americas and Asia-Pacific countries.

The findings suggest that most manufacturers and distributors do have a digital strategy or a digital transformation strategy in place, which are intended to improve operational processes and customer service. Businesses could encounter problems though because of the way in which they are implementing their strategies. As many as 71 percent of businesses said they outsource these services to external providers.

Get the right people on your team

The problems with an external service provider are that they may have little understanding of core business challenges and the everyday realities affecting operations, which means the digital strategy may not align with how it’s being implemented. For instance, almost half of manufacturing businesses wanted to improve customer service, but only 18 percent of these businesses had invested in business systems that would enhance collaboration with customers and suppliers.

It’s advisable for manufacturers to develop and manage their digital roadmap and to own the process. Rather than rely on a service provider to implement strategy, businesses could opt to partner with a project manager who can advise and manage the journey so that strategy aligns with implementation.

A project manager can lead implementation and oversee the project to ensure a business’s strategic objectives are met as well as realise the full capabilities of an investment in technology.

If a project is poorly managed, businesses are at risk of running over target dates, exceeding budget by staggering percentages, and wasting valuable time. While project delivery is a joint effort, the project manager can ensure ERP project success by employing several essential strategies.

Strategies for successful ERP project planning

  1. Stakeholder buy-in
    Any implementation project comes with risks and the key role of an ERP implementation project manager is to mitigate them. A major risk to a project is stakeholder buy-in as people are generally resistant to change. This includes top management support.
    The SYSPRO study revealed that the true digital transformation champions within organisations are middle managers, whereas only 44 percent of C-suite executives supported digital transformation. Top leadership support is vital to successfully transition to digital solutions.
    Stakeholder buy-in will depend on whether a digital strategy is accurately defined.
    The strategy should address critical pain points and be revisited often. During the pandemic, for instance, more than half of businesses were unable to regularly engage with their customers. As a result, many businesses now realise that ERP could be a solution to improve agility and visibility across the supply chain.
  2. Change management
    A project manager should also work closely with the project management team to incorporate a rigorous change management strategy. There are a number of change management models to consider, but one of the more popular models is the Prosci change management methodology. This model equips practitioners with a purpose-driven, performance-oriented process to achieve adoption and usage and realise successful outcomes from change.
  3. Measure, monitor and reassess
    A project manager should regularly meet with the project team to establish project milestones, and with project stakeholders to ensure sponsorship. The project manager also needs to focus on continuous incremental progress.
  4. Questions that would need addressing are whether:
  • ERP implementation is delivering value such as time efficiencies;
  • wastage is being reduced;
  • the supply chain is becoming more efficient; and
  • there is more visibility and co-operation between functional areas.

It’s important to partner with trusted advisors to help you along the journey so that you minimise mistakes and maximise value. When implemented well, ERP can offer multiple benefits and returns.

The key to success is to be clear on the objectives, ensure stakeholders’ sponsorship, and appoint a project manager who manages, implements, and always places the project success together with customer experience at the center of every decision.

JP van Loggerenberg is Chief Technology Officer at SYSPRO

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