Is your business operating with faulty parts?

A car with a faulty part cannot go fast and far. However, some parts are more critical than others. An engine to a car

A car with a faulty part cannot go fast and far. However, some parts are more critical than others. An engine to a car is essential for it to move.

If your car engine breaks down, it risks the life of the driver and all passengers. Great drivers keep looking at the car dashboard, continuously for any alerts or red flags for a safe and uninterrupted journey. An enterprise resource planning (ERP) system for any business is like an engine to a car. If you are using an inappropriate ERP, your business risks stagnating due to high costs from system inefficiency, poor responsiveness to your business needs, as well as increasing risk of system offline.  Which means lost opportunities and money.

To meet the growing needs of your business, you need a robust enterprise resource management system that facilitates quick turnaround times, is secure, interoperable, and user-friendly. Above all, is scalable to meet the growing needs of your business.

However, some companies invest in business management system whose set up create some internal inefficiencies in respect to key functionalities like customer relationship management, sales and supply chain, inventory management and reconciliations, and overall data integrity issues. We have conducted a post-implementation review of ERP systems and noted with concern whereby some core modules of the system going offline affect sales at peak periods and causing avoidable losses, in terms of delayed stock distribution and reconciliations, lots of staff time wasted in manual reconciliations, among others.

To win, conduct an ongoing assessment of your system suitability to your business to win. The key areas to assess include:

The starting point is to conduct a Business Requirements Analysis (BRA). The objective of the BRA is to map your company processes to assess the adequacy of your existing current enterprise resource planning system, if any and other systems in use to meet business needs now and in the future as per strategy. The outcome of the BRA is a comprehensive report with practical recommendations on business needs, and the suitability of any existing systems gaps to be closed if any and recommended specifications of the new system that may help close the gap. The BRA report answers some of the following questions:

  1. Whether the current ERP, related modules, add-ins, and the environment adequately safeguard assets, maintain data and system integrity.
  2. Whether the current system provides relevant and reliable information.
  3. Whether the current ERP achieves organizational goals and consumes resources efficiently.
  4. The ERP has internal controls that provide reasonable assurance and that control objectives will be met, especially as far as revenue completeness in terms of reporting.
  5. And the most key, the security mechanisms within the ERP to proactively detect undesirable events that could lead to revenue leakages leading to fraud and misreporting.

The business requirements analysis review helps assess the current business needs, medium business needs and long-term business needs, and the current systems’ suitability to meet such needs. We have seen leaders who tend to change their systems every five years due to the inability of system scalability to grow with the business.

Such could lead to loss of competitiveness and market advantage.

Today, technology and leveraging automation is a source of competitive advantage.

Copyright Mustapha B Mugisa, Mr Strategy 2021. All rights reserved.

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