A decade or more ago, anybody who had anything to do with technology talked in three-letter acronyms. To everyone else, these acronyms conjured up pound signs; multiple pound signs, in fact.
One of the most discussed of these was ERP – which became so well-known that it’s now difficult to remember what the initials actually stand for (Enterprise Resource Planning, if you remember). Yet it’s safe to say that ERP didn’t always receive good press at the time. There are some 20-year old statistics that suggest that around 70% of ERP projects failed.
However, we are living in different times now and inevitably many situations get turned on their heads. Competition in the industrial gas sector is now so fierce and the need to streamline operational processes in order to cut overheads and maximise assets has become acute. Yet, there are also ever-increasing demands for regulatory compliance, for the reduction of delivery times, and for greater flexibility to meet changing market conditions. The pressure to overcome these challenges is intense.
Meanwhile, ERP solutions have evolved and their functionality developed significantly. Over the years, expertise surrounding these solutions has also grown, so there’s a greater understanding of, not only the technology, but also the business challenges that the industrial gas industry, for example, must address.
Is it time to take a fresh look at ERP – even for those organisations that already have a solution in place? There are certainly still too many organisations in the industry that run separate and independent planning systems such as project servers to get a project-centric view, but cannot tie these into their existing back-end ERP or accounting systems. A group of project managers probably get together, say, once a month to view the overall current position of the installation and identify any programme deviations, but this doesn’t enable a fast response to a margin variation in order to remain competitive.
After all, today we live in a world where reactions need to be quick-fire. But often, not only is information kept in departmental silos, it is also held in spreadsheets where a mistyped figure or missed formula can skew an entire strategy. Many organisations exist on a spider’s web of data from a collection of different solutions, from the supply chain to production to finance and beyond, but with no homogenous view of all these inter-linking strands of the business. On the other hand, if cross-organisational information is integrated and updated in real-time, giving a 360º view, reactions can be agile, accurate and proactive.
The statistics for the success of ERP projects have improved. But the latest figures from the research firm Gartner still suggest that 40% hit problems – enough to deter many cautious organisations in the first place. But to use this as a reason to do nothing is missing a point – and an opportunity.
So how can organisations avoid being on the wrong side of these figures? The answer probably lies in the complexity of today’s multi-disciplinary organisations, especially in such challenging industries as gas production. Most ERP solutions on the market, especially the industry standards, are robust, rich and dynamic. However, it will take a consulting and implementation partner with in-depth expertise of the technology, of business and of gas manufacturing to understand the exact needs of each individual company.
It could be that they need to go beyond the footprint of a standard solution to fill in the gaps and tailor the technology to fit, for example, a complex mix of contracts or assets. This will demand a broad understanding, experience and knowledge.
However, in the safe hands of a reliable partner, ERP can help reduce operational expenditure, maximise capital utilisations and generally ‘shake up’ processes to enable more insight, more control, more transparency and improved agility. In other words, it can provide everything that’s needed to survive, and even thrive in today’s ultra-competitive environment.
About the author
Gavin Oberholzer works at HSO, a leading provider of innovative enterprise business solutions.
Founded in 1989, HSO specialises in implementing, integrating, optimising and maintaining enterprise solutions and works with multinational enterprises in industries such as distribution, retail, manufacturing, and services.