How to fine tune your ERP system and maximise value

Large organisations have invested a lot in enterprise resource planning software. Although the value of these applications is unquestionable, many still fail to maximise their full functionality.

The majority of large organisations have invested a lot into enterprise resource planning (ERP) applications, such as SAP, in terms of money, time and resources. These are strategic investments with ERP forming the backbone of the organisation's back-office and increasingly front-office business activity. Although the value of these applications is unquestionable, many still fail to maximise their full functionality.

The need for a bottom-up approach

When implementing ERP it is often senior management and IT that decide on the strategy and how it will support the organisation's business-critical processes. While this is all well and good, organisations can risk missing a trick by not exposing their users, such as credit controllers or warehouse managers, to the full possibilities of what their ERP application can do for them. One of the reasons for this is that many users often have very little direct interaction with the software vendors, meaning they can be unaware when new functionality is released.

There are many back-office functions that can potentially generate value to the business by incrementally turning on existing functionality. This backfilling is generally far easier to do than the initial implementation, so while the gains may only look modest they all contribute to the return made on the total cost of ownership of the ERP application.

The challenge for most organisations is how to maximise the value from their ERP application by using the right mix of best-practice processes in a cost-effective and simple way while taking into account the needs of all their users.

Simple strategies, best practice and benefits

It is little wonder that many users aren't taking advantage of all the potential functionality available to them. However, by following some simple, best-practice strategies, organisations can realise the full benefits of their ERP application in a cost-effective way.

As a first step, organisations should look to regularly review their existing business processes. This can help them identify where improvements can be made, and establish where additional ERP functionality could be applied to the business.

Today's ERP systems can also help organisations minimise errors and the time staff spend on repetitive business processes. Through the greater use of templates, organisations can start to work much more smartly. Yet again, too few organisations adopt this approach as comprehensively as possible. Instead they spend a lot of time, money and effort customising ERP applications unnecessarily when in fact a templated approach can remove a lot of pain from many everyday processes.

Companies can also benefit from looking at what other applications can be integrated with their ERP implementation. For instance, by integrating Outlook, e-mail users can streamline the way they receive notifications from their ERP systems, so they can easily execute and review workflows. Integrating other third-party software and applications can also allow users to automatically look up commodity codes and perform credit checks, all within the same user interface.

ERP in the cloud is also now starting to be considered by some organisations. While many will still want to keep their core ERP software on-premises, there are potential cost and efficiency savings from having some standard low-risk ERP functions in the cloud which require limited customisation. Consequently, we are now seeing vendors such as SAP starting to push hybrid solutions.

The role of communication

To maximise the potential of an organisation's ERP application and learn best practice, users need to be able to engage with their software vendor and, equally as importantly, their peers.

Due to the sheer scale of today's ERP applications, different modules often have differing levels of maturity. Therefore, it is important that users are kept fully abreast of the latest functionality. Where version 1.0 may not have met an organisation's needs, version 2.0 could well do.

User groups can provide a great forum for non-IT staff to see product demos, collaborate with their peers and share their ERP experiences, all of which can help them extract further value from their applications.

Implementing simple best practice techniques can help businesses to ensure they extract maximum value from their ERP system with minimum effort. By using templating and collaborating with peers, users can learn from each other and eliminate the need to duplicate expensive solutions. Communication is key and those that open the doors to discussion both internally and externally will reap the rewards of getting the most from their ERP application without breaking the bank.

George Mansfield is director with responsibility for Special Interest Groups development at the UK & Ireland SAP User Group

Read more on Business applications