Written by Cem Item, Vice President at Sunrise Technologies.
Managing multiple ERP instances is common for Consumer Packaged Goods (CPG) companies who inherit a system through business acquisition, or have customized legacy systems for each business unit, channel, location, and or department. As old technologies lose their effectiveness, customizations are made and patches are created to keep the systems working. This can lead to a growing mess.
Companies that are considering consolidating to a unified platform for ERP, CRM, and business intelligence know that the process will be time consuming and costly, but the benefits of global visibility and universal business processes throughout the organization will immediately show a ROI. For many, consolidating and moving to a single instance of a modern platform is key to their very survival and being able to support the solution for the long term and keep it up-to-date. (Want to dive deeper into the reasons? Check out the Top Benefits of Standardizing Global CPG Manufacturing with a Single Instance ERP Solution).
There are three critical success factors to consider when planning to move to a single ERP instance:
1. Infrastructure Plan and Management
With any ERP implementation, you need to assess your existing infrastructure and make sure you have good plan in place. This should be your starting point. What does your existing infrastructure look like? How will the organization be accessing the solution – in the cloud or from a datacenter? You will need to examine the full range of your IT architecture, including data network equipment, telecommunications, servers and storage, data center efficiency, end-user technology, physical security, and support strategy. Will your current network be able to support the additional demands of the new modern unified platform so that you get the security, reliability, and cost savings you expect? Is it time to consider a cloud strategy that will allow you to always stay fresh on the latest version without the management of infrastructure?
2. Master Data Consolidation and Management
The master data which is spread across various business information systems will need to be consolidated and moved into a single data management hub. Take a look at the entities and processes and create consistency in the way the master data is managed or what is called Global Master Data Management. For example, look at how the company is going to define products, customers, and vendors across the organization and standardize that data up front. You will need to make the global design decisions early in the process and stick to it throughout implementation, as well as after you are up and running. The quality of this data will be a critical driver to the success of the implementation.
3. Process Standardization
You can realize significant cost savings by standardizing processes across the entire global supply chain, whether you own it or not. The goal is to integrate your processes and standardize them as much as possible which will lead to common parameters for comparison, reduction in costs and a single internal view of the organization. Such process standardization is the foundation for enabling shared services across the enterprise. For example, you can standardize key global procurement processes, which can ultimately provide greater transparency, and increased procurement speed and efficiency along the supply chain, by consolidating and managing procurement resources spread around the world under a centrally shared procurement center.
Selecting an ERP application and implementing a global single instance can be challenging, but the benefits and return on investment can be considerable. Be sure to keep these factors in mind as you go through your evaluation process and work with an experienced partner familiar with your industry who can carefully walk you through your options and alternatives.