Developing an Enterprise Software Strategy
The Problem and Opportunity
At most companies, operations management would admit that use of business software and integration of enterprise business processes could be improved. Key issues usually are:
- Can existing ERP software be improved or upgraded to meet current and projected needs?
- Are there enough deficiencies in current ERP functionality, technology, or vendor status to justify searching for new ERP software?
- Understanding the ERP strategy’s effects on the options and timing to improve satellite business applications expected to coordinate with ERP.
- Who's responsible for business software, department coordination, and change management?
Without the guidance of a well-crafted Enterprise Software Strategy, companies tend to react to problems and opportunities in a ‘business software vacuum’ which results in a business software environment that’s unnecessarily difficult and expensive to maintain. This often increases isolation and inefficiencies of business process areas across the enterprise.
Developing this Important Plan
Engleman Associates, Inc. offers a process to develop a realistic and defensible Enterprise Software Strategy. Our approach and skill is based on more than 900 ERP software projects conducted since 1996.
The Enterprise Software Strategy plan is designed to improve confidence on whether a company should improve existing ERP or implement new ERP, and when. With the ERP strategy known, decisions to upgrade or replace other business applications can be made for the greatest benefit to the company.
The Enterprise Software Strategy Planning Process
- Education: The following items are useful to discuss, and are intended to improve your team's ability to participate in, and appreciate the results of, the Enterprise Software Strategy planning exercise.
- Current status of the ERP and typical satellite business applications markets.
- Attributes of a modernized business applications and the general benefits to companies.
- Techniques to reduce business software costs (licenses, maintenance, and leases) which can affect the business application paths ultimately taken.
- Techniques to control software implementation projects to manage risk and achieve better results.
- The Enterprise Software Strategy planning being conducted and requirements of team members.
- Company Familiarization: This begins with a discussion of potential changes in your company size, acquisitions, new products, manufacturing techniques, distribution, international business, industry trends, or other major potential changes with your business. This 'forward-looking' discussion is followed by interviews in selected process areas and business units. These seek to discover current process problems, improvement ideas, and what processes are considered specific to your company or its industry.
- Current Business Software Status: Assess and discuss current or pending obsolescence or technical limitations of currently used ERP (software and vendor) and other software supporting company business processes (whether integrated to ERP or not).
- Develop Enterprise Software Strategy: Using the findings from previous steps, produce an Enterprise Software Strategy report composed of the following typical sections:
- ERP Boundary Diagram: Shows probable process areas that ERP should support and why. This diagram may be different for existing ERP and new ERP (see sample below).
- Current ERP: Analysis of current ERP status with improvement/upgrade options listed and estimated benefits (strategic, process support, and technical), hard/soft costs, and risks to achieve.
- New ERP: Comparison of market ERPs to current ERP, if changing ERP possibly has merit. This comparison is typically done on two or three ERP packages considered suitable for your company. These new ERP are measured against the same key review factors used to test current ERP (benefits, hard and soft costs, and risks)..
- Satellite Business Software: This includes business applications (on premise or cloud) expected to coordinate with the ERP. The improvement/replace analysis for any satellite software is done in the following scenarios: (1) Current ERP stays the same, (2) Current ERP is significantly upgraded, and (3) Current ERP is replaced (only if a defensible option). In each scenario the benefits, hard and soft costs, and risks are assessed for each contemplated satellite software..
- Enterprise Software Project Risk Management: Business software implementation projects (especially ERP) are typically fraught with delays, confusion, and cost overruns. Some projects fail outright. These project problems are well known, but the awareness of these problems may unduly influence the Enterprise Software Strategy. The risk factors that cause these problems can be managed, resulting in much better results. Our planning process first seeks to educate clients on why these risk factors exist and how they’re mitigated so the influence of risk isn’t overstated.
- Deliver Recommendations: The Enterprise Software Strategy plan is typically delivered and discussed in a 1.5-hour web conference call or onsite meeting. A written report containing key elements from the planning exercise follows this presentation.
The Enterprise Software Strategy planning process described here is adjusted based on company-specific factors. Please call us if you would like to discuss your ERP improvement ideas/obstacles and how our service may help.
ERP Boundary Diagram