ERP Systems Best Practices in Research Paper

Excerpt from Research Paper :


The first step in attaining best practices in ERP system performance begins not with technology or system integration at an enterprise scale, but with a re-orientation to the key processes that need to be automated to make selling strategies more effective (Chtioui, 2009). In fact best practices in ERP systems performance is more attuned to aligning ERP systems to the key strategic plans and initiatives of an organization first, then selectively using technologies to attain higher levels of performance over time. This alignment of ERP systems to strategies is critical for companies to attain profitability in the midst of a recession as well.

To attain the greatest value from this first recommendation companies need to re-evaluate their quoting and product configuration strategies from the perspective of their customers. And then determine how best to integrate their ERP systems' into the workflows to make this customer-facing process as efficient as possible. Once this process re-engineering is complete, companies need to look at how to streamline the communications and collaboration processes across each functional area of engineering, sales, marketing, and sales operations as possible. Once this is complete companies can move onto the next recommendation, and that is to re-architect the actual quoting and product configuration systems themselves to make them reflect the real-time data and intelligence from their ERP systems while also striving for greater levels of usability (Dezdar, Sulaiman, 2009).

The second recommendation is to re-define the ideal quote and product configuration system from the user's perspective. This is critical because the usability of systems that are not integrated well to their back-end ERP systems are often difficult to work with, inaccurate in much of the date and commitment dates they produce, and often lacking in pricing validity as well. The re-architecting of the quoting and configuration system needs to include real-time data integration for the ERP system and its associated components including the pricing database, product data masters, Product Lifecycle Management (PLM) and production scheduling systems as well. When all of these systems are integrated into the quoting and product configuration system, sales representative, channel partners, distributors and dealers will also have more confidence in the application as well.

The third recommendation is critically important to the success of any ERP system long-term and that is to gain top management buy-in and have them champion the program. Research studies suggest that when top management actively promotes and sponsors initiatives subordinates, managers and other senior management make a significantly greater level of contribution and endorsement to the programs as well (Rothenberger, Srite, 2009) (Wenrich, Ahmad, 2009) (Dezdar, Sulaiman, 2009). A senior executive must champion the overall program to streamline the quoting and product configuration processes if they are to be successful over the long-term.

Fourth, for the revised quoting and product configuration processes to be adopted at a relatively high rate their graphical user interface design, usability, navigation and customization all must be tested with the sales teams, channel partners, inside sales representative and senior sales management. As these are the teams who will be using these applications the majority of the time, their input is crucial. Yet it goes beyond just designing these applications to their approval; what is critically important is that they begin to take ownership of them and have a vested interest in their use. By asking for feedback and actively taking actions on their comments and concerns they will have greater ownership of the end application. It is highly advisable to also have the entire series of graphical interfaces designed on templates so they can be quickly changed over time. When revised applications including quoting and product configuration are modified to reflect more streamlined processes and real-time integration to ERP systems, their functionality often changes drastically as well. For example sales teams will need to be trained on how best to get supplier data on more complex configurations to ensure the delivery dates quotes are going to be accurate even with constraints of complex orders included. In addition the inclusion of Special Pricing Requests (SPRs) is a common application that is included in quoting and product configuration workflows when ERP systems are integrated into them. SPRs are used for competing on product orders that may be below the pricing threshold of a business. Automating the SPR process can generate significant sales quickly as many companies are including rules-based decision software to interpolate the customers' pricing request and then evaluate it relative to the pricing thresholds and baseline profitability levels necessary for the products the customer is interested in. All of these processes can be automated through integration to the ERP system, thereby saving sales teams many hours cumulatively, freeing them up to spend more time talking with customers.

Fifth, the project leaders of the business process improvement initiative to increase the quoting and product configuration system performance must also concentrate on change management strategies and initiatives (Lee, Lee, Olson, Chung, 2010). Inevitably when processes change, people's jobs change and there is significant stress. Overcoming resistance to change through a series of programs and initiatives to illustrate how the more integrated approach to quoting and product configuration will actually deliver more accuracy to orders, greater profitability, and more effective selling strategies in the long-run needs to be communicated clearly. In addition the need for training on the new system including the use of reports and a clear definition of why the quoting and product configuration strategies are being streamlined needs to also clearly be defined. Companies attaining best practices in this area also are able to illustrate how through business process improvement and process re-engineering their systems can be at competitive parity or even more competitive than their closest rivals in the market.

Finally the process re-engineering of quoting and product configuration predicated on better integration to ERP systems is a critical competitive strategy in many industries known for highly commoditized products. To survive in turbulent times these process areas of quoting and product configuration must be as efficient as possible to win new business and keep current customers.


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