The Need To Maximise ROI. Over the last few years, a large number of companies, which have implemented Enterprise Resource Planning (ERP) systems, have realised that quantifying their Return on Investment (ROI) has been difficult. As a consequence, many firms have become disillusioned with and even questioned the value of implementing ERP in the first place.
We believe that too few enterprises have, from the inception of the ERP programme, recognised that the benefits of an initial ERP implementation can increase beyond the initial implementation and plan for the applications life cycle. As a result, operational costs are not optimised and further exploitation of the ERP application is not realised. This missed opportunity is only magnified when ERP is viewed as part of the larger e-commerce paradigm.
This has not been helped by press reports that ERP has not lived up to its promises and become a financial sponge to many firms, soaking up investment funds and giving few benefits in return.
It would seem that the crux of the matter is that many companies have failed to understand that 'go-live' is only the beginning: the project must continue to evolve and extend long after the initial implementation.
The current economic climate is placing firms under even greater pressure to achieve productivity and cost improvements in all areas of their business. By optimising their ERP system, firms can typically achieve dramatic increases in their enterprise-centric ROI issues, and gain maximum leverage from their investment.
Transforming investment into value ERP Optimisation projects would be applicable to businesses, which seek to: • Increase the business benefits they derive from their ERP system • Achieve short and long term cost savings • Improve the effectiveness of business processes supported by ERP • Ensure ERP continues to support changing business needs in the most effective manner • Ensure they are making the appropriate on-going investments in ERP • Improve the quality of their planning and decision making • Improve user satisfaction • Streamline processes to enable rapid execution of customer transactions • Become an e-business with an integrated value chain that optimises the efficiency and speed of every process.
Delivering comprehensive solutions IBM has a highly experienced team of business consultants, ERP functional experts and change management consultants who work closely with the client's staff to identify opportunities at all levels of the business:
1. Strategic -How can ERP support my future business direction? What on-going investments should I make? What is the business case 2. Decision support - How can I improve the quality of my planning and decisions? 3. Operational - How can ERP improve my operational effectiveness? What cost savings can I achieve? 4. Functional - How can ERP be more user friendly? How can it make the jobs of my staff easier? 5. Technical - How do I make the system more secure? How do I improve performance? 6. Application support - How can I improve the effectiveness of my application support? How can I respond to issues faster and provide better service?
IBM consultants have the skills and experience to help your company optimise on all levels - processes, applications and IT infrastructure. We help you select the right process to optimise in order to meet your e-business objectives and can handle every stage of implementation within your organisation. We can work with you to leverage your ERP investment and extended solutions to deliver value-added solutions. The ERP Optimisation review does not just consider system configuration or technical architecture, but the whole range of business functions including: strategy, process, people and organisation.
We are careful to consider the change management issues, which may surround the recommendation of particular opportunities: looking at likely sources of organisational resistance and working with key stakeholders to overcome this resistance. By taking a holistic perspective, we address the elements necessary for implementing successful business performance improvement and do not leave a set of recommendations that cannot be realised.
Providing an effective action plan We use a series of highly structured and intensive workshops to maximise business input and identify end-to end business process opportunities for increased ROI. Such opportunities typically include: • Improving business processes • Aligning systems more closely to business needs and strategy • Identifying systems that could be decommissioned • Identify opportunities for ERP to be used instead of purchasing new solutions • Replacing non-standard ERP components with standard functionality
At the end of the project, we conduct an executive workshop to review the team's findings, recommendations and business case, and agree to an implementation plan going forward. By doing this, we enable a seamless transition from review into implementation and into the realisation of hard business benefits.
In this way, our recommendations do not sit on a shelf gathering dust, but can be put into action by the client organisation. We can assist you in coordinating internal resources and giving each aspect of your project the same level of expert attention to reduce risk and maximise return ROI. Throughout the project, we work in close cooperation with your team, providing extensive knowledge transfer to enable your organisation to harness the combined extension and ERP solution to its full potential.
Extending the value of ERP Our experience with clients has shown that ERP Optimisation can deliver significant business benefits, both "soft" and "hard". Typically, the benefits identified by an ERP Optimisation review include:
• Reduced operating costs: • Reduced purchasing spend by better control of suppliers and parts used, better management of discounts and greater aggregation of purchases • Reduced labour costs by elimination of many manual tasks • Reduced system support costs by replacing non-standard ERP components with standard ones • Reduced system support costs and licensing costs by identifying systems that can be decommissioned and replacing disparate systems with ERP functionality • Reduced working capital • Reduced cash requirements by better forecasting and management • Reduced stock holdings by streamlining planning and ordering processes and implementing advanced supply chain planning functionality • Improved customer service • Reduced cycle times • Improved service levels by improving supply chain visibility • Reduced fixed capital • Identifying opportunities for ERP to be used instead of purchasing new solutions • Other benefits • Increased ease of use • Improved user training and support.
For more information on ERP Optimisation or value creation contact Henrik Scheel at HSch@ch.ibm.com or H_Scheel@yahoo.com
Henrik Scheel is the author of the Express Value Creation and ERP Optimization. As a response, to shift in Midmarket clients' buying behaviour moving towards more value- and risk-based selling, Henrik developed and deployed the “Express Value Creation” and "ERP Optimization". A consultant-led approach aimed at helping C-level executives to prioritize and align IT investments - to realize values that matter the most. This concept has proven to be a clear differentiator in competing in the Midmarket. H_Scheel@yahoo.com
HSch@ch.ibm.com | 
