In an environment where cost control is crucial, users need to ensure they aren’t paying for ERP functionality you don’t need, says HansaWorld.
Doing more with less is an ongoing challenge for the IT department. As the CIO seeks to enable more efficient business processes to help improve operations, enterprise resource planning (ERP) comes under consideration. But there are costs involved – and these can be considerable, unless proper pre-planning is done, says Taryn Cromie, sales manager for HansaWorld South Africa.
Cromie says the key to cost-effective ERP is to buy a solution that grows with the company. “The bespoke ERP solution, designed from the ground up to suit the individual needs of one business, is a thing of the past.
Not only is it expensive and time consuming, but also fraught with extreme risk; by the time the solution is ready, for example, the business may have changed so dramatically that it is no longer relevant,” she says.
Eckhard Wernich, HansaWorld Regional Manager says: “Companies should determine before they buy exactly what they are looking for. They need to ensure that they are clear on what functionality will be used regularly. Focus on what is necessary, not what you think you might need.”
Cromie adds that over-customised solutions can present challenges when IT staff leave, or when updates become available.
“The problem with systems that have huge amounts of customisation is that users would probably need additional training – and this training becomes costly to implement if staff leave and new users need to be trained with the technical expertise to manage the systems again and again,” says Cromie.
“Most companies execute certain essential processes in a manner which is fairly standard, with a little room for their own idiosyncratic or innovative differences. Therefore, most off-the-shelf applications packages provide a reasonable fit which can be made perfect with a little attention from business analysts and/or programmers,” she says.
Cromie notes that ERP software vendors invest in R&D in their products, to meet their users’ needs and improve on any areas where needed, and when new versions and patches are made available, the systems with large areas of customisation won’t be able to take advantage of the R&D patches and enhancements.
When matching a system to requirements, Cromie recommends that businesses try to achieve at least an 85% fit between the standard software and the requirements of the company.
“The 15% gap is where some programming or tweaking will take place to ensure the solution effectively meets the business’s most critical ERP needs,” she says.
“Be cautious when choosing a system that requires extensive customisation. You are probably writing yourself out of the R&D made available through annual license fees,” she says.
Cromie says even small companies are able to acquire systems that grow with them, allowing for additional functionality to be added as needed.
“The bottom line is that any company looking to invest in ERP for the first time should aim for as good a fit as possible right off the shelf. While some degree of customisation will almost always be necessary, the degree to which the systems needs to be customised should be limited. Over-customisation will simply add to the complexity and cost of the solution.”
