The ERP Continuum

Going live with an ERP suite is the first step of a long journey. Learn how companies that understand this are leveraging the power of these systems to manage their businesses better.

Your company has gone live with its new enterprise resource planning (ERP) system. Think it’s time for a well-deserved vacation? Maybe. But when you return, be ready to begin the next leg of this long and dynamic journey as your business looks for ways to leverage the system’s power to manage the enterprise better and more efficiently. Unfortunately, not all companies recognize the need for the second leg of the ERP journey, particularly those that implemented ERP primarily to deal with Year 2000 problems. "There is a widespread feeling that — ‘Voila!’ — the system goes online, and the company will automatically begin making better decisions and operating more efficiently," says Tom Davenport, director of the Andersen Consulting Institute for Strategic Change in Cambridge, Mass., and author of "Mission Critical: Realizing the Promise of Enterprise Systems" (Harvard Business School Press, 2000). "But things are a lot more complex than that, and some companies have been slow to adapt and develop new processes to fit the system," he says.

That slow movement can be a mistake. Unlike many systems, ERP suites are designed under the assumption that an organization will modify its business processes to suit the software, rather than the other way around. ERP systems work most effectively in an organization that integrates processes across all parts of the enterprise, freely shares information, and uses common terminology. "You have to step back from ERP and realize that its success lies as much with business process reengineering and standardizing business rules and processes as it does with the software," says Mike Costa, director of finance information technology and controllers’ processes with The Dow Chemical Co. in Midland, Mich. "You are never really done."