Aligning ERP with the Overall Business Strategy

Aligning an ERP implementation with a company’s overall business strategy is a difficult and often overlooked component of a successful project. The main thing needed is to take a top-down approach to defining business processes and then ultimately arriving at an ERP solution that fits the overall business.

In other words, before configuring a system to enable the desired to-be processes, one needs to define what these to-be processes look like. In order to understand the to-be processes, one needs to know their operational strategy. And before defining the operational strategy, the need to define the overall corporate strategy and objectives.

Steps to Ensure a Successful ERP Project is aligned with the Overall Corporate and Operational Strategy

Define the corporate strategy and objectives. Typically look at a 3-5 year horizon when helping clients through the process. Challenge them to answer the question: “where do you want the company to be in 5 years?” Also, “what operational strategy is required to enable this higher-level corporate strategy?”

Once the company Strategy is clearly articulated, then there is a need to define “to-be” business processes that will enable this corporate and operational strategy.

Then, establish the performance measures at the corporate, operational, and business process levels. These measures should help to identify how successful it has been in executing against the defined strategy. They should also align with reports that come out of the ERP system.

Finally, one can begin designing, configuring, and testing the system to ensure that it is aligned with steps 1-3.

The unfortunate thing is that most companies start with step 4 and skip steps 1-3.  By following all four, however, companies can be better prepared to ensure ERP alignment with overall company strategy.