Distributors need to tailor internal business processes as much as possible to the best practices baked into distribution ERP systems.
In an article on CIO.com, Kennametal CEO Carlos Cardoso advocates aligning internal processes with standard SAP software. “My philosophy is that more than 100,000 companies use SAP,” he said. “Our processes should not be so unique that we can’t make standard SAP work.”
Cardoso makes a very good point about more than 100,000 companies using SAP best practices incorporated in the system.
The reality is that most companies’ processes are not quite as unique as they believe. When a unique set of processes have been developed, this has often been the result of working around inadequacies in the applications or by coming up with “quick fixes” that would not have been put in place if more time had been spent analyzing the business requirements.
ERP implementations often fail or go over budget because company stakeholders insist on forcing the new distribution ERP system to fit their existing way of doing business. In many cases, companies’ existing business processes offer little value; they simply represent the way business has always been conducted.
In most cases where there are gaps between “as-is” processes and the underlying ERP, these gaps can be addressed with a combination of business process changes to fit the built-in practices of the distribution ERP system (where appropriate), and supplementing the processes and systems with custom reporting and alerts.
Of course, much of this is dependent upon first using a distribution ERP system that has proven ERP best practices built in and where the solution chosen is already meeting a predetermined percent of the companies’ requirements.
Company stakeholders should be open to the possibility of using the ERP best practices to replace existing legacy processes. There’s a reason so many companies use these standard practices — they’ve been fine-tuned to operate as effectively as possible.
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