As the global economy continues to digitize, industries across the globe are investing in software development solutions to help them achieve high efficiency. With different software targeted for various aspects of the business, there is an increasing need for a comprehensive enterprise software strategy.
According to Statista, 33% of the enterprise resource planning implementation projects in 2020 have incurred more costs than expected. This proves that this process takes a lot more effort than commonly anticipated.
This article discusses the suggestions, recommendations, and valuable tips to develop an enterprise software strategy. Additionally, it also provides a detailed analysis on how to implement an enterprise software strategy effectively.
The purpose of Enterprise Resource Strategy and planning is to spare business from using multiple programs or processes that take considerable effort and consumes significant time to complete tasks.
All these processes eventually slow down the organizational performances and result in bottlenecks. However, with enterprise strategies, external and internal operations are integrated and collaborated using sophisticated tools and technologies, and as a result, the business experience easier management.
Undoubtedly, with the pace the world has been moving toward innovation, it is not a matter of whether to implement enterprise software strategy or not? Instead, the burning question is how to implement the strategy with optimum efficiency.
An informed and optimized enterprise software is only possible when we have concrete answers to the following questions.
Is the existing ERP software effective enough to satisfy the current and expected project needs? And how long will it be productive until becoming obsolete or outdated?
Is it the right time to upgrade the current ERP software considering the current number of deficiencies?
What other business operations can be integrated into the ERP, and what other enterprise applications are there in the market that can replace ERP with better functionality?
Before you answer these questions, there is a dire need for an adequately designed Enterprise Software Strategy plan. Without a proper strategy, fixing the delay and eliminating business application deficiencies will be close to impossible.
Due to the lack of resource planning, many firms fell victim to delaying fixing business deficiencies and eventually faced damages that could have been easily avoided.
Moreover, since they are not fully optimized, they tend to overlook opportunities and get late in executing crucial application projects.
When compounded, this lack of planning turns into a business application environment that is considerably exhausting to maintain and breeds unnecessary difficulties.
On the other hand, developing a resource planning strategy on time can go a long way and allow the business to seek and benefit from potential opportunities.
The Enterprise Software Strategy is crafted to determine whether to implement a new ERP system or keep going with the existing ERP with some improvements.
More than that, it also answers the question of when would be the right time to either replace or improve the ERP to get the most benefit out of it.
Moreover, the plan typically involves strategies for integrating business applications with the ERP or suggests which applications could replace ERP to optimize the business processes.
Furthermore, this isn’t anyone’s plan for all approach. Every firm is different, with a different set of challenges and strengths. Therefore, every step of the plan is designed for a particular firm for a specific situation and point in time.
The comprehensive process of developing an enterprise software strategy plan generally consists of the following stages. However, the sequence and the implementation of these stages/processes can vary from firm to firm.
This stage mainly includes educating employees, team members, and all the relevant stakeholders about the current ERP system, potential risks and benefits of using cloud ERP, and comprehensively improving ERP functionality, keeping its costs and risks in mind.
This stage consists of the following processes and steps for the business function that is most relevant to the ERP:
When sufficient data is collected, in this stage, it is further developed and organized to use in the Enterprise Software Strategy strategic development.
The data collected from interviews, detailed discussions, and other sources are then transformed into valuable information to perform in-depth analysis.
Next, the results obtained from the analysis are carefully compiled and stored to be used for future re-engineering of ERP systems or any other business process.
Next, strategic goals are developed and made sure that they align with the Enterprise Software Strategy plan. Furthermore, these goals are categorized as enterprise goals, and all the related business areas are instructed to work towards achieving these goals.
There are two common approaches to implement an enterprise software strategy:
The best-of-breed approach allows the business to select vendors that are best suited to their requirements. On the other hand, the integrated approach combines all the business operations and functions under one platform.
Both of these approaches have their respective benefits and drawbacks.
The best-of-breed strategy is like making a dish by getting the best ingredients from several different sources. Many businesses prefer this approach as it allows them to have more flexibility and only the best of applications. Companies may have five or even ten different apps, from workflow systems to BI platforms, and all of them are working and interacting under a single business system.
For instance, if a business aims to have Google Apps and use Gmail for email, Microsoft’s SQL Server for corporate data handling, and Basecamp for software development project management, in this case, the Best of Breed strategy is the most suitable.
Despite the growing popularity of best breed strategy, there are some drawbacks of using it.
When you have applications from different sources, it generally means some difference in how to use them. Therefore, businesses have to train employees for various applications and use them to achieve maximum productivity. This can be a hassle.
The changes and inconsistency of different application interfaces may result in loss of productivity and make the implementation more challenging.
When you have all the apps from one source, you deal with one vendor only. This allows you to manage your relations more smoothly and also provides you a space for negotiations for a better custom development price.
On the other end, with best of breed approach, you deal with numerous vendors simultaneously, and since you don’t buy much from them, you don’t have substantial bargaining power. Therefore, in most cases, you incur more costs.
In case of a situation or a service error, the troubleshooting gets excessively difficult because now there are different vendors if you would have only one vendor, so you know who to call when things go south. Still, first, you need to spend valuable time finding out which vendor is at fault and then asking them to fix it.
More than that, you are not their valuable customer since you have only bought one or two applications from a vendor. They might not be in a hurry to solve your problem as they will be busier in catering to big clients.
Lastly, the thing that, according to many, is the more fearsome is the security breach. When you have five or more vendors, this means you need to keep your system secure by having five or more passwords and authentication measures.
This leaves the security at risk because you don’t know which application is more vulnerable to threats and has weak security.
The integrated approach is considerably more convenient among the two methods, as it is everything under a single umbrella solution. The enterprise resource planning system (ERP) integrates all business applications under one roof to allow the organization to work more efficiently.
The format and the capacity of the ERP system vary from vendor to vendor. For instance, some ERP systems have the feature of the direct installation. All you need to do is buy the software and get it installed to your organization’s system, while some ERPs are cloud-based, which don’t require installation.
However, the most common issue with ERP systems is that one department finds it challenging to implement it thoroughly.
No matter which approach you choose, the key to success is to make the right decision at the right time. When you make a crucial decision early, you have time to estimate the timeline, cost, resources, and vendors for the project appropriately.
No matter which approach you to choose (e.g. SCRUM, etc.), you need to have ample time for all the essential estimation and calculation. Therefore, we suggest you weigh all the pros and cons of both the approach without being biased.
Moreover, don’t neglect or discourage an approach if you don’t have the right resources. Have some time to analyze and find ways to have enough resources to implement the best-suited strategy for your business. You can do that by hiring, training, and outsourcing.
As statistics reveal, more and more businesses are adopting and adapting enterprise resource software because no firm wants to feel left behind in the technology race.
They are integrating their operation by implementing enterprise-grade apps. They use enterprise systems to pave the path for more growth and development.
The Enterprise software strategy development process is not a one-time task. Instead, it is a never-ending process. The way the world is evolving, new and more innovative technologies will keep coming in and make the current technology obsolete. Therefore, this race of running toe to toe with the technology will always be on.
In this case, businesses need to be more vigilant and more open to innovation. Self-assessment is the key to implementing a business enterprise software that takes the performance to a new level.
There is no perfect approach to this, only the one that suits your business better and fulfills all your system integration requirements efficiently and effectively.
We hope that this article has provided sufficient information to kick start your enterprise resource software strategy.
However, to successfully integrate your business applications, you need to assess your goals, make sound strategies, be more flexible and open to change. Last but not least, choose the software that is not best based on your requirements and preferences.
Ryan is the VP of Operations for DEV.co. He brings over a decade of experience in managing custom website and software development projects for clients small and large, managing internal and external teams on meeting and exceeding client expectations–delivering projects on-time and within budget requirements. Ryan is based in El Paso, Texas.