There's nothing simple or cheap about adopting an ERP solution that fits into your current business model. Successfully implementing a job order costing system module as part of your ERP solution requires more than an out-of-the-box solution. Yes, the software product is an integral part of the overall equation, but unless you have an equally fitting implementation model to match, your deployment efforts will be in vain.
Despite the plethora of articles, blogs and whitepapers on job order costing systems for MRO (Maintenance, Repair & Overhaul) and Manufacturing, organizations still find themselves out of tens of thousands of dollars with only a failed implementation to show for it. Is this because content regarding large IT investments tip toe around the topic of failure? Or is it because a heart wrenching $100,000 dollars causes organizations to look on the "bright side" and naively turn their back on....hush...failures? Start gripping your arm rests ladies and gentlemen, because we're about to lay it all on the table.
Critical Issues Affecting Job Order System Implementation
With Enterprise Resource Planning being one of the fastest growing sectors in the software industry, it's no wonder vendors are jumping at a chance to get a piece of the pie. With this being said, at some point in your research and development phase you're going to come across vendors that are willing to cut you some awesome deals. However, what you save in software you pay in re-implementation fees. Only a few contenders are committed to assisting MRO and Manufacturing companies with industry knowledge in implementing an appropriate job order costing system.
We’ve decided to help you out by presenting the top four considerations you should take into account before developing an implementation plan.
1. ERP Solution: A good ERP product should include a competent, large database, a unified interface, and numerous applications that can be used across the entire enterprise. One of the best solutions for supply chain enterprises specializing in product manufacturing is Microsoft Dynamic AX. This solution is capable of integrating each department in one system while still managing to address manufacturing, accounting, sales, distribution and supply chain management.
Benefit: Microsoft Dynamic AX comes with real-time, open client/server architecture, giving you the opportunity to process information remotely and share new inputs with your customers, partners, and employees almost instantaneously. Furthermore, this job order costing system includes the most functional modules and advanced technologies to help you reengineer your business practices.
2. Reengineering Business Practices: When you implement a new ERP solution, you actually rebuild your organization's way of doing business by modifying current practices in order to achieve the best possible manufacturing standards. Although rebuilding business practices isn't always complicated, extreme caution is recommended if your organization includes unique processes. In this case, the best approach is to preserve the processes that make your company distinctive and customize the ERP solution to ensure its perfect integration with your existing business model. If the system can’t adapt to your business needs, then your organization must adapt to it by changing its procedures. Note: This is why it is important to work with partners that have deep industry experience in manufacturing and MRO business practices to ensure success.
Benefit: Although reengineering your business practices implies some costs, these are much lower than the costs of customizing an ERP solution to meet the needs of your organization.
3. Management Commitment: It’s already been proven that management support is critical for any IT project to succeed. Implementing an ERP solution is no different. That’s because implementing this solution isn't only a matter of replacing a software product with a new one, but also a matter of having team members who are ready to comply with special requirements. Therefore, job order costing system implementation is more about people than technology and processes. Since your organization is about to go through a major transformation, meticulous management planning is a necessity.
Benefit: A functional management team can help you enjoy a smooth ERP implementation process because it's able to “fund” your project with useful ideas, while playing an active role by solving conflicts, building cooperation, and even leading the change.
4. Partners and Consultants: Approaching reliable, knowledgeable, and skilled vendors and consultants is as important as implementing a new job order costing system. One of the best things to do is to look for an organization whose employees have worked in this field for many years.
Benefit: Although finding the right people who are ready to assist you in implementing an ERP solution into your business is a major challenge, it’s well worth the effort knowing that these professionals can help you succeed.
Two more factors to consider are the implementation period and costs. Regarding the implementation period, it’s advisable to follow a phase-in approach by implementing and testing one module at a time. Coming down to costs, don’t forget that job order costing system implementation costs rise as the level of customization increases.
With these considerations in mind, organizations can objectively approach ERP implementation in a smart way. Did we forget to mention proximity? Sometimes peace of mind is knowing your partner is a call away. Check out Clients First locations to see how each office strategically serves 8 regions across the continental U.S.