How to do an ERP Assessment to find out!

An ERP Assessment is a review of the current footprint your systems. It should include ERP and all the associated integrated and interfaced systems which comprise your Business Systems Footprint. How often should this occur? Based upon how systems and their footprints grow and change today, it should be every 3 years and not longer than 5 years. It should be run by someone who independent of the system, not the main managers from the IT or User Community. Having an outside Project Manager will help with this independence, but is not always required, especially in larger organizations where there is a Project Management Office (PMO) where experienced Project Managers are available.

Licensed Products

How do you start this? The first step is to identify what you own and whether it is being used. This sounds easy, but usually is not. We suggest reviewing your last detail invoice (there may be many) of all the software companies that you are paying maintenance on and that is what you own. Unless of course you are using software that you paid for, but have dropped support. Tasks include:

• Identify your footprint by what you are paying for or did pay for
• What are you using?
• What are you not using?
• What are you using, but not licensed for?

Based upon the list of what you are using, find a key system user or decision maker on every module or major process. For example, General Ledger would have a specific person who is usually different than the Accounts Receivable decision maker. In some organizations, it could be the Order to Cash process is owned by Customer Service and so the decision maker would be in that department.

Major Process Flows

We start the review by reviewing the Process Flow Diagrams for all major processes like Order to Cash, Procure to Pay, Build to Order, MRP, etc. If there is no documentation for this, then the decision makers can demonstration what is being done. This identifies what is being done within the system. We start with the following.

Review Processes and not modules initially.

• Start with the big processes like Procure to Pay and Order to Cash
• Then move on to:
  • Manufacturing Processes
  • Payment Processes
  • Capital Expenditures and Fixed Assets
  • Cash Receipts (Lockbox, Credit Cards, Paypal)
  • Human Resources and Payroll
  • Service
  • Support
  • CRM
  • Financial Management
  • Travel Expenses, Approvals, and Reimbursement
  • Project Management

Documenting Processes

Documenting this is critical to the review process as it states what the current footprint and processes are. The best way is to do a high level flow chart and then a writeup of what is happening in that process. During this initial phase of review, high level flowcharts and one page descriptions of the activities will suffice to get the project going. More detail flows and descriptions can be done at a later time for the processes that are necessary to be reviewed in that manner. This will present a good view of the systems installed and running for your organization.

Interviewing Key Decision Makers

The next step is look back and then forward by interviewing the key decision makers. The look back is to ask what issues they are having currently and how is that effecting current operations. The look forward is finding out what they hope to do in the future by enhancing the system. Both of these are loaded questions, but start a conversation as to where we are and where we are going. All of these issues and enhancements need to be logged and identified for the entire group of decision makers to review. This is because most issues and enhancements effect more departments than the one requesting them.

Investigation Phase Completion

We now have completed the investigation phase of the Assessment. My next blog will be reviewing all this information, and then collating it to turn it into an Assessment.

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