What’s a smart ERP investment during a downturn?

  • Posted on April 30, 2020
  • Estimated reading time 3 minutes

This article was originally written by Avanade alum Martin Burden.

When business slows down – and this will be an immediate, current concern for many in the UK – leaders will seek to conduct a critical assessment of business priorities; of its commercial outlay and will seek to find a route towards stability during the downturn.

We think it’s important that businesses take a long-term, holistic view of their situation. It’s tempting, given the urgency with which news is arriving, to make decisions very quickly – too quickly – and this is entirely understandable when businesses are feeling an immediate commercial impact.

The priority, of course, is understanding how the business can stabilise. Leaders need to understand their current and future revenue streams, as well as how best to keep customers and employees happy.

They’ll think about their customers, and those customers’ priorities, so they can drive revenue by keeping them happy. Customers are likely to be going through their own difficulties and they’ll be looking internally – at how they can support changing times and changing needs.

This last priority brings us to systems. It’s important to understand whether systems are optimized to be able to support the business during the downturn. Perhaps there are inefficiencies which can help deliver cost-savings. The other side of that is whether they’re currently maximizing the value of their existing investment: can it drive new value that’s been overlooked?

This is a task where an external agency may well be very valuable. As the world’s leading Microsoft Dynamics partner, we’d recommend Avanade’s own services, of course. Often, people are too close to everyday operations to take a holistic view and see where changes might yield effective results. Your existing systems and processes become normalised – they appear to be the way things ought to be – and it requires someone with a fresh perspective to point out how changes could create a positive difference.

Don’t mention the ERP
Very often, this assessment of the extent to which ERP systems are optimised and helping drive the business forward has never been done. 

Implementation is, unfortunately, very often focused on how systems are installed, how to get them working, and then the project is ended with a discussion of support at a technical level. The whole implementation, in other words, is driven more from the perspective of getting systems working, rather than driven by the business and its ever-evolving priorities.

If this has been the case, it becomes important to review the extent to which the ERP system is delivering the expected value, which parts of the system are working well, and which need fine-tuning. Ideally, businesses should look at ERP implementation as a continuous improvement program of linking technology to their business and adapting systems to match industry trends and market conditions on an ongoing basis. This is especially the case with Microsoft Dynamics, which has rapidly evolved to become a platform offering considerable integration and many possible routes for extension, as opposed to discrete applications.

But the reality is that not many businesses have conducted this post-implementation analysis. It’s a difficult and time-consuming to implement ERP systems in the first place – and, as a result, many businesses are reluctant to revisit the experience, or feel it would occupy too much of their time.

Investing for tomorrow
So, returning to the theme of a business slowdown, one very appropriate way to potentially turn adversity into an advantage, in parallel to the critical assessment outlined above, is to conduct an appraisal of your systems while there’s perhaps less pressure to immediately deal with new orders and projects. 

Again, an independent view can be invaluable in helping businesses align their ERP systems with current and emerging priorities. Investment here can significantly de-risk a business’s ability to cope with changes in coming months and allow for greater agility in reacting to new circumstances. 

Changes to your systems are no panacea for major market downturns. But it is undoubtedly a positive response to adjust and optimise those systems to respond better to new realities. It’s likely that the technology you use can do more to support you in these difficult times, especially if the initial project was focused on technical rather than commercial concerns. So now may be the opportune time to take a fresh look at how your ERP investment might be exploited to the fullest.

Think you could be getting more from your Microsoft Dynamics AX/365 applications? Our advisory service conducts a comprehensive analysis to provide practical advice and plans to maximize your investment. Discover how Avanade can help by downloading our “Maximizing your ERP investment” guide and registering to attend our joint webinar with Microsoft, to learn how you can about supercharge your operations. Contact Martin Burden for more details.

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