How to Champion a New Manufacturing ERP

Market conditions will likely be changing rapidly in the near term, and manufacturing organizations of all sizes will need to improve operational efficiency in order to remain competitive. You may not have final decision-making authority in your organization, but you can provide process leadership that can strengthen your business and your career. In this ERP guide, we will introduce general strategies for selling change to senior leadership and then provide a specific action plan for proposing an ERP transition.

In such a volatile economic environment, championing a new ERP system within an organization can be a daunting task. However, it's also an opportunity for individuals to demonstrate leadership and contribute significantly to their organization's resilience and growth. An ERP system can streamline operations, improve efficiency, and provide valuable data-driven insights, making it a strategic tool for navigating economic uncertainties.

To successfully champion an ERP transition, it's crucial to understand the current economic conditions and how they impact your organization. This involves staying informed about manufacturing industry trends, monitoring key economic indicators, and understanding the specific challenges your organization faces. It's important to align the benefits of an ERP system with your organization's strategic objectives. This could involve demonstrating how an ERP system can help manage supply chain disruptions, reduce operational costs, improve productivity, or enhance decision-making processes.

It is tough to achieve long-term, sustained organizational change and extraordinary planning is required to mitigate the risks involved. There are two common reasons why organizations can be hesitant to embrace a business transformation. The first is resistance to change. Selling change to senior leadership involves presenting a compelling business case for the ERP transition. This includes detailing the potential return on investment, outlining the operational improvements, and demonstrating how the ERP system can help the organization navigate the current economic challenges. Comfort levels with established processes—even as they become outmoded—can put businesses at a strategic disadvantage. The notion that something must be wrong before it can be fixed precludes an agile, ongoing approach to business improvement.

“We’re too small” is another common refrain for some manufacturers when it comes to digital transformations. There’s no denying that a new ERP can be a costly and time-consuming process, but today’s modern ERPs offer features and functionalities that can be added as a company grows. The size of your company shouldn’t determine the sophistication of the tools you use. Small and medium-sized businesses actually benefit even more than larger organizations from tools that streamline business processes and facilitate growth.

The following steps will help you to overcome expected objections, including concerns that existing processes may be sufficient, a new ERP solution will benefit only certain functions, managing the transition will be costly and problematic, and the investment is too expensive to justify at the present moment.

Describe the reasons for your proposal
This step begins with interviewing leaders from each business department and finding out their respective difficulties, pain points, and needs for process streamlining. Ask each of these leaders to conduct their own research on how new ERP systems would improve their efficiency, better connect their department to other business functions, give them actionable insights for smarter decision making, and make them more competitive in the marketplace. Prepare a full report that outlines exactly how the ERP will eliminate each business pain identified and details how stronger efficiency within each department and better collaboration between departments will strengthen the business.

Walk them through the implementation process
Leverage the experience of best-of-breed ERP solution vendors in your industry for insights into the implementation process. Describe the various steps including assigning an ERP evaluation team, champion, and support team, evaluating options, the internal RFP process, migrating data, customization; change management, training, testing, go-live, and ongoing support. Your executives may be concerned that this new initiative will be an expensive, drawn-out process, with unforeseen problems. Talk with vendors about common problems with ERP transitions, so that you can quickly dispel the concern that such problems will derail the process, disrupt business, or prove too costly.

Stress the tangible and intangible benefits
An ERP solution improves just about every aspect of your business including employee productivity, work-in progress, efficiency, process times, collaboration, costs, ability to compete on price and quality, foresight into new markets, and talent acquisition and retention. Above all else, your customers will be more satisfied and loyal to your business. Conduct online industry research and cite recent and relevant statistics to make your case. Conclude this step by demonstrating how every benefit distills into an improvement in the customer experience. Best-of-breed manufacturing specific ERP solutions enable manufacturers and job shops to deliver consistent quality, meet shipping deadlines, and offer more competitive pricing. The net result is a business designed to quickly build and maintain a portfolio of satisfied clients.

Spotlight cost savings
Offset the concerns of initial expensive outlays with specific details about cost savings. Work with each departmental manager to quantify the extra costs of maintaining the status quo in their respective business functions. Describe the cost savings in reducing hard costs such as on-premise hardware, software, and the IT resources necessary to keep them running (assuming you make an advised move to cloud-based ERP). Quantify the value of lost customers due to inefficiencies in your business processes, manual processes that take days and could be automated to be completed in minutes, or product quality issues that could be rectified with a new ERP solution. Cite case studies that vendors can provide that show specific reductions in these cost areas.

Demonstrate projected return on investment
The vendors under consideration should be able to show you case studies that demonstrate how client companies have streamlined formerly manual or inefficient processes, automated workflows, cut labor hours, and saved thousands of dollars. Some common results of implementing a new ERP solution are decreases in payroll processing times, business insights that help determine the most profitable market segments, and daily/ weekly/monthly reports that can be compiled automatically by the system, rather than requiring hours or days of valuable staff time. Cloud-based ERP solutions typically raise ROI by saving substantially on hardware and software investments, as well as the IT resources necessary to maintain them, perform system updates and upgrades, and provide cybersecurity.

Discuss data quality
Case studies show that a leading cause of manufacturing and job shop business failures are due to poor data quality and access. Legacy systems are notorious for not integrating well with the new applications your business needs, which create data inconsistencies. A new ERP solution that integrates all of the applications your business relies upon will reduce your need for time-consuming data quality assurance processes and eliminate the errors that lead to bad data.