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Fast Track ERP for SME (ERP)

Do you find that your current business applications and manual processes are barely able to support your current operation and continually hinder you from execute on your growth strategy effectively?

For many rapidly growing small and medium enterprises, the current organization, business operation and transaction volume have out grown the support of their existing legacy business applications which are often obsolete in functionality and no longer support by the product owner.  Many functions areas are working through daily routines by navigating through a web of tangling workarounds and manual processes using tools like Excel spreadsheets, hard copy forms and physical log books.

With the rapid emergence of new application development platforms and great perforations of ways to deliver and deploy business applications, the total cost of ownership for core business applications such as the Enterprise Resource Planning (ERP) system has become more feasible and justifiable for small and medium enterprises.  Even in smaller ERP packages specifically targeted at SME’s, a wide range of feature rich modules are provided from Inventory & Product Management, Sales, CRM/Call Center, Warehouse & Logistics, Assembly and even Service & Delivery Management and Point of Sales. 

These products are also highly configurable, bundling in powerful tools for customization and reporting that will allow even the end users to manipulate data and information at the field and screen levels, as well as create and modify menu items and work flows according to security access rights granted.  Some even provide multi-company, multi-site, multi-currency support which can now be found in even the smaller software packages while providing a variety of licensing and deployment options including leased licensing agreement and service level based deployment approach such as Software as a Service (SaaS) or ASP model.  Making the right choice can be difficult and management should to be aware of what are the main categories of software and select the one that best suit your needs and investment. The following are the different categories and examples of ERP packages available today.

Commercial License – Software packages available to general public under commercial licensing from product owners or licensed partners.  There are 3 sub-categories, Tier 1, Mid-Market, and Entry Level.  Tier-1 software packages such as Baan, JD Edwards, Lawson, Oracle, PeopleSoft, SAP and are normally used by large multi-nationals and global companies with large multi-million baht budgets.  Mid-Market are packages targeted at medium to large size companies that require much less investment.  Some vendors in this category are Sage, Epicor, Microsoft and Exact Software.  Lastly, there are entry level packages that are more appropriate for small enterprises that has very little budget for this type of investments. Some examples are Quickbooks and Peachtree.

Open Source License – Software packages developed and supported by non-profit organizations and communities of developers in cooperatively and are made available to the general public at no charge.  Some leading ERP open source ERP packages are Openbravo, Compiere, Apache OFBiz, xTuple and OperERP and are generally available for download over the Internet.

But with so many choices of platforms, licensing and deployment options, available functions and features, making the right choices and ensuring that the implementation properly supports the business today and in the future can be a complex and perplexing process.  Therefore, when planning to undertake an ERP implementation project, management and the project sponsors should try to keep the initial implementation scope to the necessary modules by focusing on the function areas where ERP will have the highest benefits on the operation.

The following are some key success factors to consider when management of SME’s decides to undertake the investment to implement an ERP system:

1.       Full management support and user participation

Management must be willing to allow users in each function area sufficient time away from day to day work to fully participate in requirements discussion sessions as well as testing and training sessions.

2.       Identify Key Functional Gaps & Show Stoppers

Gaps in key functional requirements and show stoppers must be identified as quickly as possible to ensure enough time for solution development and customization if required.

3.       Interface to Accounting System

If an interface to a legacy accounting system is required, the in interface specifications and T-Account mappings should be developed, validated and tested as soon as possible to allow sufficient time for necessary testing of transaction posting, reporting and necessary customization.  Often times show stoppers will be found in this area as this is an area that relates closely to government agencies like the Revenue Department involving compliance to laws and regulations.

4.       Data Conversion & Mapping

Get well qualified resource to start data extraction, consolidation, conversion and mapping from other systems or document as soon as possible.  Ensure that the test conversion and mappings are loaded and tested in the development system as soon as possible.  This can take up to 6 or 8 weeks to get initial loading and testing completed in the development system.

5.       Minimize Customization & Source Local Talents

As much as possible, simplify and consolidate complex business processes through Business Process Reengineering and/or leverage the ERP application internal process flows by changing your current process to match the flow within the application.  The processes built into the application are usually the result of process optimization by the product owner to incorporating  industry standards and best practices in order to ensure relevance and effectiveness of their product in serving the clients’ requirements and operational needs as best as possible.

With careful planning and allocating the right resources, an ERP system can be implemented and deployed in as quickly as 8 weeks and can take up to 24 weeks depending mainly on the number of modules and level customization required.  But even at 24 weeks, this time frame is still orders of magnitudes quicker than the traditional 12-18 months that would be required to put such a full feature ERP system in place a few years ago.

Furthermore, management and the implementation team should also take into consideration other factors which can have significant impacts on the success of the project.  Factors such as organizational and operational readiness, technological maturity as well as availability of the human resources and skills can have detrimental impact on the implementation efforts, timeline and costs, hence, risking the overall success of the project.

Finally, if necessary, seek qualified help from external experts to assist with your planning and implementation. If budget is a limiting factor, there are provisions made available by the Thai government through various non-profit organizations that can provide budgetary assistance to qualified SME’s.  For example, a qualified SME can receive as much as one million Thai baht subsidy for using external consulting services to help with projects relating to manufacturing including business process improvement and business system implementation such as ERP.

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by Asanee Isarowong (B)

Director at DMJC Group (Thailand)

www.dmjcgroup.com

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