Interview Chandrahur Datta, Partner, Vector Consulting Group
1. Why don’t companies take full advantage of ERP? What are the challenges in using ERP effectively?
A: ERP implementation is done without understanding the entire business – it is done as a single project, partially mimicking the process. The approach of gathering requirements from all departments and adding them all up is a silo approach, which is a real problem. Most importantly, there is limited understanding within the company of the functionality of ERP systems. The result is that the requirements become bloated and no one ends up using it. Implementation costs rise.
Over time, managers developed numerous customized reports, most of which were out of sync with overall goals. Instead of departments uniting and working together toward a common goal, gaps between departments widened.
To take advantage of ERP, you must remember that it is an enabler, not the solution itself. To improve operations, companies need to focus on the business problems they want to solve and understand the interrelated nature of these problems. Then they need to develop a business solution first. Next comes the feature or report. Managers need to agree on a solution. Once this is done, the requirements become very easy to define.
2. How can companies improve operations without changing or reimplementing ERP?
A: The answer to this question is quite simple – the solution must be “business first” rather than “software first”. The whole idea of enforcing software features in the name of “best practices” has to stop. Once the focus is on solving a business problem and developing a solution for it, the requirements become clear and constrained. It becomes very clear what not to do.
3. Customized ERP is expensive and time-consuming. How can companies overcome the limitations of standard ERP and deploy new solutions?
A: The urge to include all features or utilities in one package is an unattainable dream. Integrating custom plug-in components with standard plug-ins is a way to resolve conflicts. You may find that certain parts of the solution are not possible due to the limitations of standard ERP, so a non-standard custom-developed plug-in layer needs to be added on top of it. These should be organization-specific software, not standard software. This will enable one to implement ERP very quickly and efficiently while keeping costs low.
This approach of combining standard ERP with customized, non-standard software can also help enhance existing implementations. This custom software can be built to overcome the functional and implementation deficiencies of the current ERP rather than re-implementing it through reconfiguration.
4. Are there any real case studies of vector balancing standards and customized ERP for manufacturing companies?
A: For almost all implementations we have in operations, we find that the solutions we design are often “unimplementable” within the current ERP, so instead of re-implementing, we take the approach of building these custom plug-ins. In fact, we’ve named these custom plug-ins VectorFLOW. By improving business parameters such as delivery times, inventory, productivity and more, we are able to deliver real implementation ROI to our clients. To the extent that organizations can get the ROI they want from their ERP, and more after we intervene. We have nearly 100+ clients who have benefited from this unique approach.
