In a century where changes in society are taking place at a dizzying pace, as well as where globalization is a great challenge, managing information in real time becomes vital for any company, allowing it to react or Anticipate any outside interference that threatens your trading market, in other words plan your corporate strategy. This article aims to open the minds of the reader to think of strategic alliances based on technology as a good opportunity to reduce the cost of inventory management, thus expanding the profit margin.
Content
In today's world, every company is directly or indirectly affected by globalization, every cause has an effect and unfortunately it is reflected throughout the world and usually covers all markets and industries.
Growing up and going ahead with the appearance of new companies, in addition to new sales channels, require the search for new ways to increase income. There are two ways to do it: one is to sell more and the other is to decrease operating costs, seeking to maximize profits; Because the second option is easier and it is exclusively up to you to achieve it, it is a great idea to consider investing in information technologies to achieve this end as part of your business strategy.
In the 1980s, the integration of all the departments of a company was sought through computer software to have information in real time, this concept had the limitation of being located in the same physical area, or otherwise a Great investment for other expensive as were the private networks based on EDI (Electronic Data Interchange).
With the appearance of the Internet, in the 90's the idea of integration with other companies in the same market (vertical) took more force, with which the value chain (suppliers-company-clients) was streamlined and optimized to real time.
The vertical integration based on information technology allows to recompose the value chain of companies since it reduces the human presence to make orders or fill orders, allows an exchange of information with suppliers, etc., with which it is achieved reducing the cost of doing business (Thomson & Strickland. 2002).
The technology that allows the reorganization and integration of all the areas of a company is known by the name of ERP (Enterprice Resource Planning), which although it is a software, allows to concentrate all the information that is generated in a digital medium, updated and available at any time with what is known the status of the company in real time, which can serve as a basis for decision-making and thus support the company's competitiveness strategy.
The main characteristic of ERP is to serve as a means of linking and concentrating the information of all the departments of the company (or a part) by means of software (Sales, Accounting, Production, RH, Marketing,.etc) without need. that these areas are in the same physical area. To achieve this goal, he relies on e-Business, and the use of the Internet allows him to eliminate distances quickly and economically.
Before any investment in technology and more of the ERP type, there is always a resistance to change which must be foreseen and planned with the corresponding corrective or preventive actions (contingency plan) as the case may be to allow this solution to truly be of value to the enterprise.
The way to acquire it can be by buying or renting it, the decision is the subject of a great meditation since vital points such as the degree of integration, the way of implementing it, the selection of software in general, all the support that must be taken into account The service provider offers and the most important thing to consider is the organizational change that implies an investment of such magnitude.
The time of implementation of an ERP varies from the number of business areas that will be in it and ranges from six months to a couple of years of hard work to change organizational behavior, it is said that approximately 66% of the ERP's implemented fail Because the companies cannot fully adapt to them, the problem comes from the origin; a bad choice of software, so it is convenient to invest a great deal of effort to analyze the difference between the processes offered by the ERP with those carried out by the company, and plans should also be made regarding the quality of the work they will carry out users (Carlo, Mike, 2003).
Because ERP's are based on e-Business, there is a mutual relationship to determine which segment or areas of the company will be enabled with said technology.
Fig a) ERP / e-Business matrix taken from (Norris, Hurley, Hartley, Dunleavy, Balls, 2000)
| No e-Business Capacity | Channel Enhancement | Value Chain Integration | Industry Transformation | Convergence | |
| Greenfield | |||||
| Non integrated System | |||||
| Limited / Single Function ERP | |||||
| Integrated business Unit ERP | |||||
| Integrated Enterprice ERP |
To better understand the previous figure, suppose that a company wants to enable a sales channel via the web (Channel Enhancement), we proceed to determine with which ERP technology the company currently has, in addition to what types of backoffice systems it is working, thus determines how much effort is expected to be invested (human, monetary and possible time) to implement the ERP.
Although ERP is a magnificent technological strategy to achieve corporate goals, unfortunately at least ten typical errors can be cited when implementing an ERP (Weightman, Clive. 2003), among which are:
1. Ensure that the entire ERP implementation process will be backed by the business. (It is essential to establish the mechanisms so that all the necessary updates are included in the budget and not fall short in estimates).
2. Treat it as a technical project and not as a project that balances people, processes and technology. (ERP is more than a technical tool, it has an influence on the way the entire company works, including people and processes).
3. Try to create a solution incompatible with the organizational culture. (It should be foreseen by the CEO with second-level managers, how much the ERP will affect the way they have worked and with what effort this task can be achieved).
4. Select a strong integrating system and ignore its warnings. (Compatibility, event log, investigate and determine if it sticks to the industry, etc.).
5. Start without an effective senior manager (all strategies must be implemented from top to bottom to be truly effective).
6. Fail with the choice of team "A" by the company. (It is due to a poor selection of employees with critical knowledge by the company).
7. Late start for the data that will be handled. (There must be a concordance with the data currently handled with those that will be entered once implemented, it must be now and not a few months before the end of the implementation).
8. Failure in the needs and the capacity of integration in the search for a quick impact on the business. (Results should be expressed now and not within 15-20 months to fully install.)
9. Do not plan or minimize internal changes. (It is common for the business to undergo an internal change in the way it is carried out, making it difficult to recondition the ERP module to have such an effect).
10. To think that the work is ready when it is already in production. (Frequently, there are errors and doubts on the part of the users, which makes the flow of information difficult, since the consultants and the people who installed it are no longer physically present).
The current trend is to expand the ERP of the company to transform it into Extended ERP, the idea is that it covers the entire value chain of the business suppliers-company-customers or what is the same to cover the SCM (Supply Chain) and give it better customer service through CRM (Customer Relationship Management) with which a company "A" has access to the ERP of company "B" and so on, with which it can obtain inventories, follow orders, invoices, etc..
With this, there is a great elimination of time and physical inventories, with which the company gets the benefits of working online and in real time, reducing costs and becoming more competitive.
conclusion
ERP's are a very good option for all the aforementioned, unfortunately they present a limitation that makes it exclusive to certain companies, which is the amount of monetary outlays necessary to implement it, software, people, training, hardware, which without doubts implies modifications to the organizational culture.
It is also said that one of the great gaps of ERP's is that they do not contemplate certain hierarchical relationships between employees, which causes an inconsistency and uncertainty on the part of the company's workers.
Undoubtedly, before acquiring an ERP solution, it is necessary to consider who will be our technology provider and who will be in charge of the implementation since all the involved elements will be literally married to the project for several months or perhaps years. You always have to think ahead and consider that if the best solutions on the market (different vendors) were taken for each module, this would have a high monetary cost, and if you buy from a single provider, you will sacrifice functionality. It is worth mentioning that many vendors combine different ERP and e-Business solutions through a single portal, which makes this proposal very attractive since it has a standardization that reduces implementation time. With that,The three main beneficial impacts that the company will obtain according to PeopleSoft, are general processes for all business needs and not individual applications; secondly, it allows applications from different providers to be integrated online in a portal environment, and lastly, it is guaranteed that business processes are always active (Cortés Alejandra, 2003)
As you can see there are many aspects to consider to develop or implement an ERP, but it sounds very interesting and promising for any company to align its technological infrastructure with the corporate strategy seeking integration in the vertical market, always thinking about the final product as well as the acceptance by the client in addition to optimizing resources.
In Mexico, only 4% of companies use SCM applications mainly for the financial and distribution sectors (Reforma, Feb-19-2003).
The success of the ERP depends on the clear definition of the success or goals that the client has with what is being achieved, likewise it should be noted that the benefit is not the same for all the areas it covers.
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