The purpose of this ERP Selection activity is to determine the opportunities for improvement. These opportunities may be in the form of problems or issues that are readily apparent and need to be resolved.
Part 2: Define the Opportunities The purpose of this ERP, enterprise resource planning, selection activity is to determine the opportunities for improvement. These opportunities may be in the form of problems or issues that are readily apparent and need to be resolved. They may also come in the form of business process improvement opportunities that are not readily apparent to the organization. For example, you may be satisfied with their current procurement costs and not recognize that the costs can be reduced substantially below their current levels based on what others have been able to achieve (such as; volume discounts, consignment pricing, competitive benchmarking, etc.). This activity is not about defining solutions. There is no point in talking about an enterprise software solution until the opportunities are first fully understood. Otherwise you may end up solving the wrong problem or proposing a solution that does not fully address the opportunities. Also, from a value proposition perspective, it is very difficult to sell an ERP solution unless the opportunities are clearly recognized, understood and defined. The first step in the process is to understand the current issues, problems, or business process improvement opportunities that may exist in the business environment. These are termed undesirable effects. In essence, they are symptoms that can either be improved or mitigated. Examples include: • Inventory levels are too high. • It takes too long to process orders. • The right information is not available to make decisions. • We need to improve our cash flow. The first task in this activity, “Why Change Is Needed”, this is designed to help you uncover these undesirable effects. The next step is to determine the root causes that are producing the undesirable effects. Defining a solution is pointless until you understand what is producing the undesirable effect. For example, suppose your car won’t start one morning (this is an undesirable effect). It is obviously a waste of time and money to go out and buy a new engine for the car (one proposed solution) without first understanding that the car won’t start because you are out of gas (the root cause). The second task in this activity, “What Needs To Change”, this is designed to help you uncover the root causes of the undesirable effects. Once the opportunities have been defined, you will be ready to begin the process of defining solutions to address the opportunities. It is very important to keep in mind the end deliverable of this phase from the very start to ensure that the execution of the tasks in this activity is in alignment. In essence, the end deliverable is the value proposition of your assessment findings and recommendations. The definition and communication of the value proposition is detailed in your "Deliver Value Proposition" activity. You should be familiar with the tasks in this activity and execute the steps as they relate to this activity in parallel. (End of Part 2) - (Part 3 will be “Why Change is Needed”)