Definition
Enterprise
Resources Planning (ERP) is an outgrowth of Materials Requirments
Planning (MRP) initiated in the 1970's as a new compuer-based approach
to planning and scheduling of material requirements and inventory,
featuring the time-phased order point. MRP evolved to MRP II (Materials
Resources Planning) the "closed loop" process, to Business Requirements
Planning (BRP) and eventually to ERP. As MRPII came into vogue in the
late 1970's and early 1980's, software companies began to develop
software packages around MRPII concepts.
At the same time, research of integrated data bases was in progress at
a university, and out of that research emerged data base management
systems (DBMS). One of the earliest successful commercially-produced
data base management systems was IDMS (for IBM-based systems) and DBMS
(for DEC-based systems) produced by Cullinane, who's company name was
later changed to Cullinet. IMS, a structured data base management
system for high transactions, was another data base management system
produced by IBM.
The idea of the integrated data base as the engine for fully integrated
software was probably one of the greatest outgrowths of Ollie Wight's
and Dave Goddard's MRP. Eventually, the acronym ERP was conceived to
represent what had already been developed by software companies.
The early software packages were developed by way of a
transactional approach, and were highly unfriendly to a user. With the
advent of the personal computers, the development of Microsoft's
Windows NT, and the mid-range IBM AS/400 computer, client-server
systems began to emerge. Windows, used as the base operating system,
allowed software packages to become more and more user-friendly.
Today, ERP systems have proliferated entensively, and have reached a
stage where development has become industry specific. Thus it is
plausible to search for an ERP package developed for one's specific
industry idiosyncracies.
The Issues
The
biggest single issue in ERP is the failure of a successful
implementation. (Please see our
white paper The 12 Cardinal Sins of ERP
Implementation.) It is mind-boggling to continually encounter companies
who make major ERP gaffes in this day and age, especially since most of
the trials and tribulations of MRPII implementation were suffered and
learned from in the early 1980's with alpha, beta and gamma releases.
There are four major reasons for why companies get bogged down or fail
in implementing ERP. (1) Inadequate Requirements Definition (2) Poor
ERP Package Selection, (3) Inadequate Resources, and (4) Resistance to
Change.
Surveys have shown that inadequate definition of functional
requirements accounts for nearly 60% of ERP implementation failures.
This is simply a matter of not comprehensively and systematically
developing a quality set of functional requirements definitions. This
leads to the second greatest cause of ERP implementation failures: poor
package selection.
Poor package selection occurs when a company has inadequately developed
functional requirements definitions. It also occurs when staff members
assigned to ERP projects do not take the time to run the screens of the
new system, as they would during their daily work tasks, to find out if
the software package features are adequate for their needs. Another
reason we have found is executives familiar with an ERP system from a
last job they held, implement the same system in their new company
without defining functional requirements. We have also encountered
companies who made major gaffes by selcting a package at the top levels
of a company without intimately knowing its characteristics. What often
results from this is the ERP package doesn't fit the organizational
needs, or that the package selected takes longer to process daily work
tasks.
The third greatest reason for ERP implementation failures is inadequate
resources. Many companies will attempt to "save dollars" by doing
everything on an overtime basis, whether or not there are adequate
skills within the company, extending individual work loads to 150%.
This approach can be a "kiss of death" for the program. Time and time
again we run across this mistake in ERP implementations. The financial
and emotional drain of what seems sometimes to be perpetual extensions,
reschedules and delays of implementations takes its toll. People burn
out after having put in extensive hours over a long period of time.
Finally, the lack of a change management approach as part of the
program can prevent a program from succeeding. Resistance to change is
quite often caused by (1) A failure to build a case for change, (2)
Lack of involvement by those responsible for working with changed
processes (3)
Inadequate communication (4) Lack of visible top management support and
commitment, and (5) Arrogance.
Our Approach: Tools from a Toolchest
Rockford Consulting Group applies concepts and technologies as the situation warrants, that will result in the ultimate benefit to our clients. We treat strategies, technologies, and methodologies as tools in a toolchest, and use them when they offer practical solutions and achievable results. We believe that each client situation is unique, with its own unique set of solutions. (Please see our ERP consulting services ERP Consulting Services )
Why Us?
Rockford Consulting Group can provide long-term assistance to many companies in a variety of industries. The firm has a cadre of the best management consultants in the world today, providing high quality professionalism through the use of experience and innovation.
We subscribe to the Institute of Management Consultants Code of Professional Conduct. All consultants engaged on projects adhere to its principles. Whenever possible we will use consultants certified in their particular specialty area. Certification assures that consultants have substantial prior experience in their specialty, and their competencies have been tested by the IMC, and verified by a number of clients. This assures our clients that we are assigning the highest qualified consultants in the profession.
We provide technical expertise, team facilitation, leadership, and direction in deciding how you will meet the challenge. We refer you to our Qualification Statement for further details on our background, areas of specialization, concepts and technologies applied, staffing, operating policy, approach, companies and industries served, case studies and references. Equally as important, we train our clients to sustain new methods of manufacturing and the consequential benefits over time. Your company will benefit directly from this training.
We have achieved an efficiency in our approach to assignments that allows us to provide high quality technical and managerial advice in a much shorter amount of time than could be accomplished years ago. We are able to do this because of the extensive consulting experience that each of our specialists has.
©1999 Rockford Consulting Group, Ltd.