In recent years, particularly with the rise of analytics and artificial intelligence, it has become something of a cliché to say that businesses run on data. The problem is not that this is untrue; it’s that it was always true.
However, while data, from accounting to stock control to sales information has always been at the core of what businesses do, today’s technology affords an opportunity to make more of data. As a result, enterprise resource planning (ERP) platforms are coming out of the shadows of the back office to take their place as crucial tools for forecasting and decision-making.
“ERP represents the core back-office systems for many organisations,” said Ian O’Toole, managing partner at Lumenia Consulting, which specialises in assisting businesses select and implement ERP systems as part of the core of their digital transformation strategies.
“It’s where your business is transacted – sales, purchases, inventory, resource management, supply chain planning, and so on – and ultimately accounted for: your financials. That all creates a lot of structured data,” he said.
Good data, which is to say data that can provide actionable business intelligence, is essential. It relies on controlled business processes generating it, and ERP needs to be implemented with this in mind.
“If ERP is not implemented well those processes may not be well integrated, or not well understood. If this happens, users will circumvent the standard process and start to generate workarounds, creating islands of less controlled and integrated data in Excel, for example,” O’Toole said.
As a transformation project, ERP needs to be owned and driven by the organisation itself
The problem with this is that it means data becomes siloed and even gets lost, making it unavailable to decision makers.
“That makes it more difficult to pull together, analyse and ultimately action and maybe build further automation on.
“That represents a failed ERP implementation, in my opinion. Not necessarily a headline-grabbing budget overrun, but a failure to deliver the benefits that it could have.”
The question then is how to avoid this scenario and set up for success.
O’Toole said the first thing was to understand the scale and scope of ERP implementation rather than simply considering it as just another piece of software.
“An ERP project needs to be treated as a transformation project, not an IT project, so the first thing is to get the organisation ready and perform the correct preparation.
“In practical terms, this means getting clarity on scope and objectives by asking ‘what will ERP cover in our organisation, and why’.
“Organisations that have a clear vision of where they want to get to, including how future-state business processes should operate, in order to deliver on clear objectives, will see the benefits.
“Doing that early helps build alignment and ultimately helps smooth the change journey.”
Next, the budget, including external costs and internal resource availability, should be developed, followed by identification of the right platform for the business.
“Then you need to ensure that the internal organisation is right, in other words that you have the governance and resources to manage the change and evolve or transform processes.”
Crucially, while Lumenia works to assess which is the right ERP platform for each of its clients – indeed, attendees at its upcoming ERP HEADtoHEAD event, to be held on October 1-2 at the Dublin Airport Crowne Plaza hotel, will see demonstrations of more than a dozen platforms to compare – ERP implementation is not something an external solution provider can simply bolt onto a business.
“An ERP project is not something that an integrator does to an organisation,” O’Toole said.
This is because the critical nature of ERP, combined with the specificities of how individual organisations work, means that each organisation itself knows best what information it needs.
“As a transformation project it needs to be owned and driven by the organisation itself – supported by partners providing the relevant technology and expertise – but ultimately the responsibility of the organisation itself,” he said.
“Taking that approach is how real ERP success is achieved.”
Lumenia helps organisations through that journey by independently guiding them along the way: from scoping, planning and business case development to building organisational readiness, evaluating and selecting the right ERP solutions and technology partners and then supporting implementation teams by providing resources to manage implementation and change.
One very first step is seeing what the market offers.
“Our upcoming ERP HEADtoHEAD event will have 14 ERP vendors presenting and demonstrating over two days along with talks and panel discussions hosted by Lumenia,” said O’Toole.
“It’s a really good opportunity for orientation if you are considering embarking on an ERP project.”