As a company or company representative explores manufacturing software options, the ultimate system is one referred to as ERP.   The term ERP means Enterprise Resource Planning.  The Term “enterprise” is the reason for using the phrase “ultimate system” because Enterprise means the entire organization.  ERP systems are built around ERP software, which is modular in nature.  This modularity can be both strength, and a weakness.

All ERP systems are built around a central core, which contains data, which is central to the periphery processes, and is shared with those processes.   Around the central core are modules for various enterprise wide processes.  These include accounting, customer management, quality, human resources, payroll and others. ERP systems are flexible in that the central core can be integrated with third party modules.  The difficulty of the integration depends on the central core platform (ERP Software) and the various modules and their vendors.  This is one of the aspects to keep in mind with ERP selection planning.
The modules and implementation plans are important to review since ERP implementation often goes with, or should go with Enterprise restructuring. This is compounded by the dynamics of the ERP software vendor approach to selling the system.

Often, the prospective client will go to a demonstration of the ERP software by a vendor, often concurrently with other prospective clients.  These demos may be daylong or even multiple days in order to properly showcase each available module.  This is where the prospective client needs to pay close attention.

ERP systems can be sold as complete packages or groups of modules.  The end purchase decision may be based upon the budgetary constraints, reorganization timing or both.

For budgetary constraints, the buyer will often buy “most” of a system with a current budget with hopes of upgrading as future funds become available. This is a dangerous gambit for 2 reasons.  First it requires the Enterprise to go without a module that it actually has identified it needs.  This can be phased in however it runs the risk of the future funds never materializing.  This leaves the enterprise with a hybrid system, which ultimately means the original goal of the enterprise failed, leaving a weakness in the missing module. The attending lower performance may then in fact make it harder to get the future funding, and the enterprise will just live with the result. Worse yet, the Enterprise may be planning modification or elimination of the function that is now left high and dry without the relevant module.

This strategy of stepped purchase/implementation should only be employed if the Enterprise makes a structured financial commitment, and never as an undisclosed attempt to build the ultimate system.

The person responsible for the selection and implementation of the manufacturing ERP system should do a thorough analysis of the enterprise, including financial constraints, planned reorganizations, and implementation timeline to have a successful and profitable implementation.