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“A proven methodology for better organizing a business, ERP is also a smart management tool to use as part of the succession management process” according to leading family business expert Don Schwerzler. “Used correctly, ERP application software is a valuable management tool. ERP will ensure that a family business has accurate and timely information needed to make the necessary changes for the family business to grow in size and profits – and to be a leader in the competitive marketplace.” Schwerzler has been studying and advising family business entrepreneurs for more than 40 years and is the founder of the Family Business Institute. One of the main problem for family businesses, when considering ERP application software, is to figure out which ERP system is the best system for their business. “Every family business is unique and complex in its own way,” notes Schwerzler. “Boiler plate solutions rarely work.” In 1995, The Standish Group published the benchmark “Chaos Report”:
The 2009 “Chaos Report” shows only 32% of ERP application software projects were successful.
“The biggest single reason for ERP application software failure is pretty clear – it is the improper preparation of the organization,” according to family business ERP expert Mike Roman. “Family businesses that are accustomed to being managed in a loosely organized manner are going to have a tough time adapting the ERP technology - because so much of the basic operational data has not been properly 'documented and improved' PRIOR to implementing ERP technology.” “Not having a well organized organization is probably one of the major reasons family businesses fail to grow – and in many cases, even survive,” observes Schwerzler. As part of the ERP application software selection process, Mike Roman recommends family businesses research how well other family businesses, in their industry, have fared with a particular ERP application. Ask the vendor to provide those references. Some of the questions to ask:
Unfortunately for many family businesses, the selection of ERP software is being made or influenced by in-house IT people who may not have any knowledge or “hands on” experience with the ERP software best suited for the business! Decisions are often made in terms of what might be the “easy way” rather than basing the decision on what ERP application software best meets the current and future needs of the family's business. ERP software selection should be developed by the entire organization, not just one or two department heads. It makes little sense to have a sophisticated ERP application in one department – and ignore the needs of the rest of the organization. Systemization is a crucial process for every element of a successful family business.
Check Out The Mike Roman Interview When family business owners ask us for help in dealing with ERP related issues, Mike Roman acts as an “ERP coach” – an independent expert not associated with a particular ERP system or vendor - someone who can help select which ERP application software makes best sense for a particular family business. If your family business is considering ERP, or wrestling with ERP issues, take time to get some smart advice from an experienced ERP family business expert. Mike Roman, a certified APICS trainer, will respond to your questions – just click on ASK THE EXPERT and Mike will respond.
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