Creating a Flexible and Adaptable ERP Solution
April 8, 2011 6 Comments
Every customer I assisted in their ERP implementation wanted an ERP solution that would be flexible and adaptable. One of the key challenges and disappointments customers have with ERP are around flexibility and adaptability. We also need to address the common misinterpretations associated with the concepts of a flexible and adaptable ERP solution. Referring back to a previous blog we know that ERP is only one component of a business solution. There are three key areas to address as part of developing a flexible and adaptable business solution.
Know The Limitations
Technically speaking, there are two key methods to enable packaged software like ERP to be flexible and adaptable:
- Programming (addresses flexibility or the ability to change)
- Configuration (addresses adaptability or the ability to easily change)
Each of these methods has inherent advantages and challenges associated with them. Configuration has been a key area of focus for ERP vendors to create greater software adaptability. Configurations enable less technical, business-oriented users to determine how ERP behaves to specific events and conditions. Configuration provides the opportunity for cost-effective flexibility to meet the unique business requirements. However, where there is no option for configuration then programming must be used to enable ERP software the flexibility to meet the unique requirement.
Programming provides an exact prescription to address a specific business event, condition, or activity. There are programming techniques and add-on utilities that provide some level of technical flexibility (examples: object-oriented programming, services-oriented architecture) but business flexibility is extremely limited at best (unless an ERP vendor can devise a practical means of applying artificial intelligence – fuzzy logic to their software). There are limitations with the amount of flexibility and adaptability you can create via software. What is important to remember is that there are other components of a business solution that better suited to address flexibility and adaptability.
Know Your Strengths
Let’s revisit the components of a business solution along with their inherent strengths.
Too often we do not effectively utilize the strengths of the key components of a business solution. ERP software is good at automating consistent, repeatable activities based upon a prescribed logic (business rules). ERP software is not a sustainable, cost-effective option for dynamic activities based upon fuzzy logic (business rules). People are more flexible and adaptable than ERP software. Please do not take the above statement to an extreme and infer that every customer should conform their business activities to the ERP software. ERP implementations should include software enhancements to address the unique value-add requirements of a customer.
Flexibility and adaptability only have value within the context of enabling ERP to position itself optimally in supporting key business drivers. Next, we will discuss the common drivers that must be coordinated as part of addressing flexibility and adaptability.
Every customer will have unique business drivers that must be managed in a balanced approach. Given my implementation experience following are what I consider the common business drivers that we might address as part of an ERP implementation.
Can we have a flexible and adaptable ERP solution? I believe that the answer is yes. Can we have an efficient and effective ERP solution? Yes. Can we have a scalable and efficient solution? Yes, however we can only experience both characteristics to a certain level. The challenge I observed is when an extreme position is taken in one of these areas. Like a ball on a flat table once we start tilting the table (taking an extreme position) the ball will roll off the table – - along with your ERP implementation.
Finding balance is an ongoing exercise to find the right level of applying the influence of the specific business driver upon the ERP project. It is also important to know and understand at what level of influence will business drivers start conflicting with one another.
Flexibility and adaptability are reasonable expectations for a business solution. The key challenges in this area tend to be around inaccurate expectations and not effectively utilizing the individual components of a business solution. What is required is a practical analysis of the strengths, weaknesses, and business drivers to develop a balanced approach for success. This analysis is not a one-time event but a continuous effort that is triggered when emerging pain is experienced. Experiencing pain provides the opportunity for rebalancing your ERP solution.