Immo Böhm
28 October 2011
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Very often we are in situations where companies want ERP because they believe it will enable their business, but sometimes they do not understand what is involved. So I have been thinking about a suitable analogy for some time. Sitting in Joburg traffic the other day gave me a good idea! Here it goes…
Think of your company as a little kingdom! You are the king and your Financial Director is the master treasurer. Your board of directors and senior managers are your trusted advisors, and your staff are all your subjects in your kingdom. Starting to form the picture…?
You can see the different divisions in your company as finance town, manufacturing town, procurement town and logistics town.
So you have been running the kingdom for many many years and everything went well. Your subjects go about their daily tasks in a way they have been doing for generations. Tradition and culture is deeply embedded in the way things are done and your kingdom is chugging along nicely. People are busy running about town with their horse carriages and planting their fields just outside town. The towns are pretty much isolated except for the few runners you have employed to take messages from the towns to you and back.
Then some day you realise that your cousin in the kingdom next door is building highways, he is investing in railway lines and puts fleets of trucks on the roads. His economy is booming! His Manufacturing town is turning into a city and he is dumping cheap goods on your doorstep. He is outperforming you in all ways possible and your kingdom starts to suffer.
What he has done in our proverbial world is that he has implemented ERP in the form of infrastructure that carries goods and information in a much faster and modern way. Highways and telephone lines link the towns so information flows freely and one town knows what the other is doing. His treasurer monitors everything on a dashboard so he is in control of where money is made and spent.
You are still sitting with your old system where information is in silos and every mayor does things in his own way.
So you decide to implement ERP and invest in infrastructure in your kingdom. But there are so many things to consider! What standards should you use? Should you buy a state of the art system that helped build the german or american economies? But those systems are expensive, running only six lane highways where you need only two lanes now. They need bullet trains where you will do just fine with a regional train. Your people simply would not climb on a bullet – not without you having to force them – they are still used to riding a horse you know.
So you should settle for a system that is made for your size of kingdom. But also one that will allow your kingdom to grow. Who knows, perhaps one day you want to conquer that cousin of yours and create a great empire.
With this in mind you choose a system that can easily connect to his. They are driving on the left side and use two pin plugs in their electricity grid. So it makes no sense for you to drive on the right side and use three pin plugs, even if you have consulted some engineers and they tell you its cheaper with the three pin plugs.
Think carefully about your strategy and invest in a system that fits. Look for a system which is supported by enough local engineers. You don’t want to buy a train system where no-one is able to fix the engines tomorrow. You want a system that is used worldwide and where it is tested in a large variety of countries.
There are many more considerations and a long way to build your kingdoms infrastructure – so lets explore more on the road to ERP next time.
Until next time then remember keep it afresh
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