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ROI of ERP – Part 2 of a 4 Part Series

Posted on 23 April 2014 by Louise Thompson

Selecting a ERP System

Before Selecting a System

In the early 1980s “experts” on Japanese management were isolating distinctive practices that seemed to account for Japan’s remarkable economic success. The ‘Ringiseido’ decision-making practice was one of these. It offers an opportunity for equals to participate in the decisions that the executives will have to take. The purpose was to adhere to the Japanese cultural desire of harmony among people.

To maximize ROI, certain aspects of the practice of ‘ringiseido’ should be applied to the mission-critical steps required to be taken before the process of selecting an appropriate ERP system and supplier begins.

  1. Clear decision-making authority: Who is going to make the final decision on each key issues? “Input welcomed, but the final decision on this issue is X’s.” Doing this quick exercise eliminates a raft of interpersonal problems. It is best done in open discussion with everyone who will be affected, and based on objective criteria.The criteria for the choice of the final decision-maker could be technical skill, experience, or a clear corporate responsibility. “If we go over budget the FD’s head will roll, so she needs to have the final say on costs.” The key is open conversation and agreement, ringiseido-style.
  2. End user participation: In whatever form works in your context, ensure that the voices of end-users are heard. Really heard. The enthusiastic embrace of the new system will never be achieved without up-front participation. Many a good idea has been rejected only because the recipients of the final product had no input. People have a heightened level of commitment when they have been part of the selection process.
  3. The business processes you require: In 1993 Hammer and Champy wrote the bestseller, “Reengineering the Corporation” after watching companies implement technologies to automate processes that were no longer required. Two decades later, companies still make the same mistake, in different but no less serious ways.

Before you move to selecting the appropriate ERP, use SYSPRO Process Modeling, to do an end-to-end mapping of your business processes and involve all stake holders – sponsors, as well as end-users. Do the full exercise; it would be valuable even if you were not thinking of implementing an ERP.

PREVIOUS: Taking Ownership of Your ROI

NEXT: Selecting the Right System and Vendor

Learn how to apply inventory optimization to your business


Topics: Business software, ERP systems, Selecting ERP

Louise Thompson

Louise Thompson, Chief Executive: Product Services, joined the company in 1985, and has been closely involved in SYSPRO’s product development and international expansion.

Louise obtained a Certification in Production and Inventory Management (CPIM) to compliment her extensive knowledge of the enterprise resource planning (ERP) industry, from Support Services to Implementations, Quality Control, Technical Communications, and Product Marketing.

As Director of Corporate Services, Louise is responsible for the provision of product and technical support, including training and certification; and corporate, product and relationship marketing.


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