ERP systems don't get you off the hook with management!

Do you work in a business that hoped that deploying an ERP system would solve most management challenges?

Or, are you hoping that this might be case when you deploy a system?

We have seen this problem too many times before. Putting in an ERP system won't negate your need for management.

You can't abdicate responsibility

I'm sure that you are aware of the difference between delegation and abdication.

Delegation is passing on the activity but retaining the ownership and responsibility of the task.

Abdication is passing on the activity and hoping that the responsibility is picked up elsewhere.

In most cases we have witnessed, abdication usually leads to some kind of crisis in the business at some point. It isn't a recommended strategy.

Discipline is still required

Businesses require discipline. There are tasks that need to be done that people don't want to do, but they need to be done nonetheless.

ERP doesn't remove the need for discipline. It removes the effort and complexity of specific business tasks.

There is still work to be done. This work includes 'boring' tasks that many people try to get out of.

In particular, ERP systems require housekeeping and maintenance to ensure they keep working properly and producing useful information.

There are two main options here:

  1. Ignore the issue, hope it goes away and watch as your system slowly slips out of control.
  2. Work in a disciplined fashion and continuously keep your data in good health.

Option 2 is our recommendation.

Having processes means process management

Businesses have processes and, based on the above, that means that process management needs to be in effect.

Every process has an input, an activity and an output. If you define what each of these items are for each of your processes then you have an agenda to make sure your business is working the way it should.

Let me give you an example for the sales order process:

  • The input is a customer enquiry.
  • The activity is building up a quotation and submitting it.
  • The output is the closing of the enquiry (as either won or lost).

If you don't keep an eye on the output (i.e. just leaving enquiries as open) you might end up with a clogged up enquiry log and not be able to understand what your order book is actually worth and what your pipeline is valued at.

Over time this can lead to confusion, delays in decision making, frustration and then workarounds. Your ERP system then takes a back seat as a less efficient method is deployed, just to compensate for a lack of discipline.

You can repeat this activity for any of your business processes. Each failure leads to a similar conclusion. The results then repeat as people move from a 'contaminated' system to a new system, each time hoping that this time will be the last time.

The pattern must be broken if you want to have an effective ERP system that actually makes your business more productive.

Piggy backing your daily team catchup

Knowing what your key business processes are, and determining what key tasks need to take effect in order to keep the system running smoothly, is paramount.

Creating a list of questions that will help you to understand your position on each key task then becomes a simple task.

The challenge is then to ask these questions on a regular basis so that you can act appropriately should something fall out of kilter.

A good way to get this habit to form is to append the questions to the end of a daily team catchup. Examples of questions include:

  • Are the quotes up to date?
  • Have all of our material deliveries arrived on time?
  • Have our manufacturing operations started on time?

If you have a daily production meeting, for example, then you can tag these questions to it. Any deviation from your desired process outcomes can then be logged as improvement actions and dealt with outside of the meeting.

Move to exception reporting

Many businesses fall into the trap of getting sucked into discussing the detail of their business during a team meeting, making these kinds of process management agendas bloat with unnecessary detail.

Focusing on the exceptions, rather than everything, is an efficient and effective way to handle this. Do you really care about the 97% of your production orders that have no issues? Do you really need to focus your energies onto the 3% that look like they are going to cause you a headache?

You know the answer!

Ease of accessing data is key here. If you can't distinguish between the items with a problem and those without then you cannot move to exception reporting. Exception reporting is an excellent management approach to minimise the time taken to effectively manage your organisation's key processes.

This is where Fraction ERP comes in.

Managing the Fraction way

We built Fraction ERP to allow you to quickly assess these exception situations, so you can spend more time running your business than running your ERP system.

Let me give you some quick examples.

If you want to see if your manufacturing capacity is overloaded, it just takes one quick glance. From here you can move your production orders, or flex your capacity, to manage this situation.

Checking on overdue manufacturing operations is, again, just a couple of clicks to review. From here you can reschedule, or organise overtime. It takes just a couple of clicks to determine and this is a good example of the information that might need to be shared with your colleagues during a daily production meeting.

Keeping a track on 'open' quotes is a simple way to assess whether you need to chase up customers for decisions or whether you can leave it a little longer. Either way, this can help you to keep your order book tidy and well managed.

The same goes for purchase orders. "What is overdue?" is a good question to ask, and in Fraction it is just another click away. From here, effective expediting can take place.

We hope you can see, from these examples, how simple and quick it can be to run your business by exception if you have the right tool. You can't get rid of the requirement to manage your business, when you deploy an ERP system, but if you choose the right one then you can certainly lessen the time required!

If you want to learn more about how Fraction ERP can help your business to become more efficient and more effective, then sign up for the free demo using the form below.

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