Why Creating a Postmodern ERP Strategy is Vital
A business plan is the heartbeat of a company. Usually drafted when a business is first established, it is a written document that breaks down the strategy and goals in each major departments including marketing, sales, and finance. This document also lists strategic goals, company values, and a thorough analysis of the competition.
Most companies build a business plan based on where they see their company going in 2, 5, or 10+ years. While this is vital to the growth and health of the company, these same companies often miss the mark when it comes to creating a postmodern ERP strategy to facilitate this business plan.
If not taken into account, failure to create the right strategy will result in wasted time, wasted money spent on workarounds, and a system that isn’t flexible or able to grow with the company.
What exactly is postmodern ERP, though, and why does it matter?
Gartner, the leader in global research and advising in the IT industry, defines postmodern ERP as “a technology strategy that automates and links administrative and operational business capabilities (such as finance, HR, purchasing, manufacturing, and distribution) with appropriate levels of integration that balance the benefits of vendor-delivered integration against business flexibility and agility.”
Don’t get postmodern ERP confused with the best-of-breed approach, though. A best-of-breed approach focuses on buying the best software for each category, with no consideration for how IT would integrate the solutions together. Additionally, the best-of-breed approach doesn’t establish the ERP as the foundation or the heartbeat of the company with all other solutions integrated to it.
In contrast, the goal of a postmodern ERP strategy is to use the best application possible in each particular area, while making sure they are each also fully integrated with each other.
If a traditional ERP strategy is like buying a new car every 2 years a postmodern ERP strategy is more similar to driving the same car for far longer, replacing and adding parts whenever needed.
The postmodern ERP approach uses a core ERP solution that is either on-premise, hybrid, or in the cloud — the environment depends on the individual company. Usually, human capital and accounting solutions are easier to move to the cloud, while warehouse management and manufacturing solutions typically stay on-premise due to their complex nature.
Pros for going postmodern
There are many benefits to following the postmodern ERP approach. One of the most significant is its flexible and adaptable nature. A postmodern ERP solution is able to handle mergers, acquisitions, expansions, or rapid growth with ease. With the convenience of having all solutions integrated with the ERP software and aligned with the business case, all solutions can be regularly evaluated and tweaked depending on the business goals.
Because the cost of replacing a single solution is significantly less expensive and timely than replacing an entire ERP system, companies will save money by following a postmodern approach.
By having all of the supplemental solutions fully integrated into the ERP solution, user adaptability is greatly improved, and data integration is robust. Shared data from each solution flowing back into the ERP software helps minimize human error and allows management to make better business decisions. The postmodern ERP strategy is hyper-focused on customizing a solution that fits the company’s business needs, not the other way around.
Cons for going postmodern
One of the disadvantages of a postmodern ERP solution is its complexity. Every new integration into the ERP solution creates new questions and potential problems that need to be answered thoroughly. Being prepared with a solid business plan and strategy minimize this side effect, though. Striking a balance between too many or too few integrations while keeping an eye on cost throughout the entire process is an ongoing challenge, but it is necessary for keeping spending under control.
How do you plan a great postmodern ERP strategy?
First and foremost, establishing a business case with goals and requirements will help lay a solid foundation. While creating the business case, identify key stakeholders in the company and appoint an ERP strategy leader to spearhead the project. Make sure to work with IT on the architecture, vendor strategy, and services aspects of the project. The point-people for these aspects will be working closely with the vendors and maintaining those relationships, making sure the integrations run smoothly with the ERP software and ensuring that the integrations are serviced regularly. At the end of the day, they will be the ones who will keep all parts of the ERP solution running smoothly.
One major reason why companies fail is that they don’t revisit their ERP strategy. This should be done at least once a year to make sure it’s still closely aligned with the company’s goals. Schedule this evaluation in advance and hold your company to it — even the best postmodern ERP strategies need to adapt to changing company needs and requirements.
Creating a postmodern ERP strategy is critical to a company’s overall success. While the implementation process can be complex, and integrating all of the individual solutions into the ERP software may take more work upfront than simply buying software that isn’t integrated, it will save your company time and money in the long run.
SalesPad offers ERP solutions that accommodate postmodern ERP strategies, both in the cloud and on-premises. To learn more about how we can help facilitate your postmodern ERP goals, contact one of our Client Account Managers to set up a demo.