19.12.2012

Tips for consolidating the ERP landscape

Due to decentralized technical autonomy, past IT strategies or mergers, ERP structures with solutions from different manufacturers, for example, have frequently arisen in companies in the past. These heterogeneous software relationships usually stand in the way of the goals of increasing efficiency and improving cost-effectiveness in IT, which is why more and more companies are considering consolidation strategies in the area of business management applications. Actinium Consulting has developed conceptual tips for this derived from numerous consulting experiences:

1. Start with impact analyses of the different ERP systems: Each software has its own performance profile that cannot be determined through general evaluations. Not infrequently, the processing of operating orders takes place with just as many media discontinuities and idle times, duplicate work, incomplete information and susceptibility to errors as in the initial situation before the introduction of the ERP system.
2. Develop clear consolidation criteria: A streamlining of the software infrastructure can only be successful if it follows a pragmatic objective. This includes, in particular, clarifying which criteria should be used to select the applications that are to be dispensed with in the future. A practicable assistance offers for it a matrix, in which parameters are contained as for example the respective benefit quality, operating and support costs, the modernity degree and the conditions of the advancement, the integration ability etc.

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3. Make a higher degree of standardization the core objective: In the past, decentralized autonomy has often led to a different software policy being pursued in each of the different locations of companies. The best-of-breed approach has also often contributed to a very heterogeneous software landscape. However, as tempting as this approach may be, it is also costly in terms of the administration and further development of the software landscape, which is characterized by numerous manufacturer products. The functional differences, which are often only minor in terms of practical benefits, do not generally justify keeping an overly extensive coexistence of ERP software products in operation from an economic perspective. Therefore, the central goals of consolidation should always include greater standardization.
4. Be careful of starting a project without a sufficient repository: A change in software consolidation is not a static matter, but accompanies a company continuously. This requires a repository with representation of all software including its release and implementation specifics as well as mutual dependencies. In the context of a consolidation strategy, this necessity becomes even greater if the overview is not to be lost. For a structured approach, the entire information must be available at a central location at all times, and continuous and differentiated data maintenance is also required. If not already available, a repository must therefore be built at the beginning of the project, Excel lists can not meet such a requirement as a rule, however.

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5. Conduct a software-oriented process analysis: A respository with determination of the current situation of the software infrastructure alone is usually not enough to reduce complexity in a project. After all, these applications are at the service of business processes, which is why it is also necessary to determine which software supports which business and production process. Only by analyzing the links between applications and processes can precise statements be made about the functional effects of dispensing with certain applications for the business processes concerned. Likewise, the concrete requirement to look for alternative solutions is derived from this, if in the course of consolidation, individual business processes no longer obtain sufficient software support.
6. Structure the consolidation process intelligently: Every change in the ERP landscape is felt by users and strains their acceptance, for this reason alone, oversized steps should be avoided. Thus, a roadmap with sufficient depth of differentiation should be created that precisely describes the replacement process of defined applications in its methodical procedure structure and at the same time ensures continuity in the support of business processes. In this context, project management is an extremely critical element for success. Due to the complex requirements, it must be characterized by a high level of conceptual quality and process expertise.
7. Do not forget the change management: The changes associated with an ERP consolidation must also be constructively supported in particular by the employees who were previously in the system responsibility for the applications to be replaced. To achieve this, it is not only necessary to create a continuously high level of transparency of the goals and project methodology, but also to actively involve their skills and experience. However, change management also absolutely includes to identify the expected resistance due to a possibly limited willingness to change as project risks and to develop solution scenarios for it.

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