So what are some of the most important considerations in choosing an ERP deployment model? Much of this decision could be based on internal strategies and directives which determine the priorities of how internal resources, including headcount are used. These decisions are also influenced by your core competencies.
Making the leap to ERP for Process Manufacturers (Part 4)
Do you have IT expertise in house? Even if you do, does this IT staff have expertise in implementing, managing and supporting an ERP solution? And if you do not currently have this expertise in house, do you want to build it, or perhaps redirect any investment in new employees to other priorities like research and development or increased production? Or do you need to grow your staff to manage a growing number of contracts?
Certainly another issue to consider is financing? Do you prefer to avoid or defer capital expense in favor of treating your ERP solution as an operating expense? Which is better for your balance sheet?
If you have already invested in IT staff, hardware and infrastructure, networks and communication, leveraging that investment with an on-premise solution may be the best route. But if you have not, or even if you have and feel your current investment could be leveraged more strategically, moving to the cloud, either in a SaaS or hosted model, could be a better use of resources.
If you are looking to conserve cash, you may elect to initially subscribe to a cloud solution. If you are a larger organization, you may run on-premise at the corporate level, but elect to run cloud in certain plants or divisions. And if your business dynamics change, you may decide to migrate from cloud to on- premise, or vice versa. In these situations it is important that you consider software vendors who offer on-premise and cloud ERP solutions which provide the same functionality.
Understanding the special requirements of manufacturers in process-related industries is an important step in satisfying those needs. Like most manufacturers today, they are faced with rising costs, demanding customers and consumers and global competition. Never have there been more options to consider, not only in terms of features and function available, but various deployment options which can help defray costs or turn capital investment into operating expense.
And yet ERP represents a significant investment in time, effort and money and therefore a business case must be built to justify that investment. However
savings can be gained that directly impact the bottom line, savings in inventory, operating and administrative costs. But other goals can also result in both
bottom and top line impact, providing visibility and transparency.
ERP gives all departments in the organization the ability to make better decisions faster decision. It can increase value-add to customers through communication and collaboration. And don’t forget the reduction of waste (non-value add, rework, scrap) and resulting increase in production.
Careful selection of a solution is the first step. But it is also important to set goals and these goals can help you build the business case for your ERP project. Treat ERP as part of your business. Establish a baseline of current performance; set goals for improvement; measure against those goals. World Class erp implementations set higher expectations and achieve milestones and ROI faster.