SNw 034 7 Steps to FIX your ERP Created by James on 6/12/2013 2:40:44 PM
In many of my articles I have identified the very unsatisfactory situation most organizations face with regard to the standard of their current ERP configuration. I have also identified that it is extremely costly and time consuming and high risk to re-implement your ERP from scratch unless the current configuration is extremely weak.
So, what do you do?
Here is a checklist of seven specific actions you can take to raise the standards of operation of your ERP and ultimately achieve a much higher value operational state than you may have at present.
The seven steps to FIX your ERP are as follows:
1. CEO take custody
The CEO recognizes that they are the custodian of the integrated view of the business and therefore the custodian of the integrated business information systems (IBIS) comprising the Enterprise Resource Planning System (ERP), Data Warehouse (DW), Business Intelligence (BI) and other systems in use in the organization.
The CEO puts in place whatever support is necessary in terms of high level strategic advisory services and senior staffing in order to be able to have oversight of IBIS operations without that oversight taking large amounts of CEO time.
2. Strategic alignment
Clearly define and document the essence of the business and how it thrives.
Publish this and make all personnel aware of it.
Evaluate all aspects of the operation of your ERP and related systems that are getting in the way of the essence of the business.
Formulate a long term plan to fully align your business information systems with the strategic direction of the business.
3. Standards, controls and disciplines
Effective ERP operation requires robust and rigorous standards rigorously enforced.
Engage external specialists as necessary to develop the standards and then take measures, under the direction of the CEO to implement and apply these standards.
4. Configuration audit
Undertake a comprehensive audit of the configuration of the ERP and the corresponding data in the Data Warehouse and related systems.
Evaluate all code tables, validation lists, master files and other settings. Make sure that the purpose of every table or list is clearly understood and documented.
Note deficiencies in code schemes and other settings and how the software is being used.
Formulate a long term plan to remediate all settings, validation lists, etc starting with those lists that are most actively getting in the way of the effective operation of the ERP.
Note how deficiencies ripple through into the Data Warehouse and Business Intelligence layer and formulate a plan to rectify this.
5. Comprehensive suite of taxonomies
I recommend that you define a comprehensive suite of Strategic Engineered Precision Taxonomies (SEPT) and Configuration settings and implement this in a NEW Data Warehouse instance over time.
Refer to the Taxonomy Manual for detailed information on taxonomies and precision configuration and why I make the above recommendation.
Every single validation table or master list should be populated with precision taxonomies in the Data Warehouse, this includes the Chart of Accounts, Cubic Business Model, Product Class, Product Master, Material Master, Item Master, Customer Classification, Supplier Classification, etc, etc
This can be done as a series of increments as business requires and budget permits.
6. Data warehouse and business intelligence
If you currently have a Data Warehouse start a clean instance, if possible negotiate favourable or no cost licence terms with your vendor. Keep the old instance running for current reporting and build the new Data Warehouse alongside the old one until you can cut over to the new instance when all required reports have been remediated and recreated on the new Data Warehouse instance.
If you do not have a fully-fledged data warehouse, now is the time to obtain one.
It is high risk and a massive project to re-implement your ERP except under certain conditions, it is much lower risk to implement the new taxonomies first in a new Data Warehouse.
Yes, this requires drudge mapping of sloppy and badly designed old code schemes onto the new taxonomies but it is much less work than an ERP re-implementation.
It is important to recognize that once the new taxonomies are up and running with a full portfolio of reports and models in a new data warehouse you will have eliminated the most critical decision support problems (80% of the problem for 20% of the cost). IF correctly designed and implemented this will deliver exceptionally high value results.
7. Progressive refurbishment of ERP
Once the new data warehouse is in operation you will know exactly what needs to be done to your ERP.
It is to be expected that you will have to take incremental remedial steps in your ERP in order to get the new taxonomies working adequately in the Data Warehouse, however IF you go about the mapping exercise correctly, including posting to headings in taxonomies where necessary, it is possible that you can get the Data Warehouse going with limited surgery on the ERP.
You can then take your time to progressively replace one validation list or family of validation lists at a time, in some cases you might even only replace part of a validation list at a time.
The goal is progressive, pragmatic, incremental remediation until, sometime (probably some years) later your ERP installation has been substantially enhanced and you have the value of a relatively well implemented ERP with much less business disruption, risk and cost than would apply with a full, clean slate re-implementation of your ERP, DW and BI (IBIS) installation.
While unconventional, it is my view that this approach offers a higher value, lower risk and lower cost route to greatly enhanced IBIS (ERP, DW, BI) operation in support of high value strategic decision making.
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