ERP? SCM? CRM? HRIS? Having one system too many and seeking to integrate all of them together? This article explores four areas to help you map out your integration plans to meet both short and long term objectives.
Depending on the systems integrated and the infocomm system employed, some promised benefits include lowered costs, a more efficient workforce, a better view of business resources and a keener response to change.
Today, many existing businesses already have one or more of the following systems that may or may not be integrated with one another:
- ERP (Enterprise Resource Planning);
- SCM (Supply Chain Management);
- CRM (Customer Relationship Management);
- MRP (Material Requirements Planning); and
- Financial and/or Administration System.
For businesses planning to hop onto the integration bandwagon, four areas to consider when mapping out your system integration plans to meet both short and long-term objectives are:
- Deciding on integration goals;
- Drafting a plan;
- Selecting the system that is most appropriate for the business; and
- Implementing it successfully.
Businesses integrate for many reasons. It may be to remove a pain point or that the current systems have already hit the limit and need to be replaced. Businesses may also see the possible benefits from removing the coordination required across different non-interfacing systems. Another common motivator is the intention to free up resources, enabling employees to work more efficiently and focus on more value-added activities.
Thus, businesses have to be clear on the main reason for integration and prioritise accordingly. It would be useful to first understand the internal challenges. Start by having good conversations with the users and the infocomm managers (if available) to fully understand their challenges and the new system would not repeat these issues. Thereafter, prioritise by mapping the business challenges and needs to the functionalities of the system.
By under-estimating the impact, businesses often make the mistake of cutting back on costs when they implement systems that only meet present needs. They allow the systems to grow gradually, adding new equipment or software as the need arises.
This often leads to a confused mix of incompatible and inefficient systems. Ultimately, the systems may fall short of expectations, failing to meet the business objectives. In the long run, businesses may lose efficiencies and incur heavier administrative costs when the systems have to be replaced to meet changing needs. Thus, it is important to establish executive sponsorship to commit and/or invest in a comprehensive system when planning for integration.
Sometimes employees may not embrace new technology or change readily. As a result, some businesses are hesitant when changing the processes. However, business processes are critical to any organisation.
Only when a company is clear about them can it execute the infocomm systems successfully. Therefore, businesses need to be open to process changes and improvements, be it meant for automation or integration. Having good process owners to oversee the project would help to keep the team going while keeping the business objectives in mind.
Businesses can request their vendors for proposals as well as more detailed information like a cost breakdown or suggestions on the implementation process so that they know what to expect. A good practice is to review the system supplier's website for references and case studies. Dialogues with past users channels more feedback and generates greater awareness of the risks involved, equipping businesses with more informed decisions before investing on new hardware or software solutions. These practices will give a good indication whether the system is a good fit and worth the investment.
In terms of planning for the system and budget planning, businesses will do well by keeping the following in mind:
- Ensure that the system has 80 per cent fit, abiding by the 80/20 rule. Of the remaining 20 per cent, 15 per cent should comprise configurability of the system and the other 5 per cent provide room for customisation and amendments.
- Select technology based on industry standards that are consistent with the current and future skill sets of the team. Only when they know or are trained to use the new system, business operations will not be interrupted and they can make use of the new system as soon as it is in place.
- Consider infocomm as an ongoing capital cost. By mapping out various scenarios and setting realistic long-term goals, a company can come up with a contingency plan where an estimated 20 per cent to 25 per cent of overall computed cost is factored in for unforeseen occurrences. Allocating an estimated 15-20 per cent of the infocomm budget for system maintenance is important too. Besides correcting faults and errors found after the implementation, changes and enhancements are sometimes necessary to meet the new environment or new user requirements.
Keeping in mind the big picture, a company should whenever possible start the implementation on a small scale before rolling out the entire system at once. It will be able to identify potential problems at the early stages of the project to minimise the costs incurred. At the same time, it will also be ideal to manage employee reactions and get the buy-in by making small improvements from the feedback received and extending training to all the employees who have to interface with the new system.
Successful system implementation to some extent would also depend on the executive leadership of the business. Business owners can ensure a smooth transition by explaining the changes and showing the way. Presenting a strong vision to leverage infocomm and the commitment from the top management to follow through is critical to the success of any infocomm implementation, especially one of such scale.
- This article is contributed by a member of the Singapore Infocomm Technology Federation (SiTF).
- This article first appeared in The Business Times on 19 August 2008 and information is correct at the time of publication.
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