ERP necessary but insufficient for world-class finance
Staff -- Manufacturing Business Technology, 8/1/2004 6:00:00 AM
An ERP package has little significance for achieving world-class finance performance, according to research last quarter by The Hackett Group, an Atlanta-based business advisory firm. Functionality is so similar between systems that companies are better served focusing their attention on business process improvement and configuring the system of choice to support best practices.
"Many companies delude themselves into believing that ERP packages will solve all their problems and automatically help them cut finance costs and improve effectiveness," says Beth Hayes, IT practice leader for Hackett Group. "This is understandable given the millions of dollars they're spending to implement the software, but the reality is, to a large extent, when it comes to [financial processes], ERP software simply doesn't matter."
The Hackett Group found—according to its standards of what constitutes world-class performance in finance—that only 4 percent of the companies implementing ERP actually achieve world-class financial performance status. "If companies are focused on getting to world-class in finance, they need to improve how they do things, not simply change the tools they use to get things done," Hayes says.
The Hackett Group recommends a three-step approach to finance performance improvement: fix problems, pick software quickly, and integrate.
"Companies can reap tremendous benefits by taking an ERP implementation approach driven by best practices," says Richard T. Roth, chief research office, Hackett Group.
