Fighting Global Recession - ERP Way

We are facing one of the worst global economicSome of the ways suggested are:
meltdowns. Everyone is scrambling for safeERP Optimisation: This lean period can be used for
shelter for his money. The first reaction of theoptimizing the ERP processes or introducing the
corporate to the economic recession is normallynew processes as per the present and future
cost cutting across the board.business requirements.
Enterprise Resource Planning(ERP) is a supportiveData Cleaning: This lean period can be utilized for
package for the business and is still considered byeliminating the duplication of the data and
many companies as a necessary evil rather thanremoving the data inconsistencies
an investment. So, if the business is down, theTraining of end users: Most of the end users could
need for the ERP seems to be down and the firstbe having some amount of idle time. So, this idle
reaction is to have a sharp cut on ERP expenses.time can be utilized for enhancing their ERP skills.
But, is the cost cutting, the only strategy forThey can be trained for advance functionality of
minimizing the impact of global recession, at aERP. This training could give very good returns
time when the corporate have already startedonce the business is again in full swing.
considering ERP as a good investment and aTraining of suppliers/customers: Some of the
booster for business growth?applications of ERP may also require training for
Global economy has its own cycle. After eachexternal agencies like vendors or customers.
boom, it also goes through recession and afterThese external agencies can also be trained in this
each recession it has to come back to the boomperiod.
period.Build Control: In a running business and high
ERP managers should therefore consider this leanprofitable years, the companies do not pay
period of business as an opportunity forattention to the control & risk areas in the
improvements in ERP and for increasing the ratesystem. This may someday cause big financial
of return on ERP investment in the long run.losses. We have many examples like 7 Billion dollar
Economic cycle has to see bright days again. So,fraud of Societe Generale SA, one of the largest
the wise man is the one who utilizes the bearbank of Europe, by a junior staff simply due to
phase to get ready in the bull phase. Cost cuttinginsufficient controls in the system.
without effecting the performance of the ERPSo, ERP managers should also concentrate on the
should only be a part of the strategy instead ofloop-holes/ risk prone areas in the system like
being the only strategy.excess or inappropriate access of the activities or
For survival in global recession ERP strategy canthe fields, to avoid any unforeseen disaster.
be broadly classified in 2 parts 1) Cost CuttingData Analytics: ERP managers should also analyse
without effecting the performance of ERP, 2)the data generated in the past years to find out
Utilising the lean business period for increasing theany data inconsistency or fraud through the
ROI for ERP investmentsystem.
Cost Cutting:Implementation of ERP or new applications for
ERP Support:There are 3 ways for ERP support:oERP: When there is no business in the market,
In-house supporto On-site support by externalyou can get the best deal in all respect. To
resourceso Internet-delivered remote supportsurvive in this period, suppliers give the best
The best approach could be the combination ofdiscount. Also, due to less number of projects,
On-site support and internet-delivered remoteyou can get the best resources which otherwise
support as 70-80% issues can be solved byare busy on more lucrative foreign projects.
remote support. Remaining issues can be resolvedSelecting ERP: When ERP is implemented in the
on site. Server Maintenance: Setting up andcompany, it becomes backbone of the company's
maintaining your own server can be verybusiness. It can affect your business in positive or
expensive, looking at various costs incurred onnegative way based on the quality and suitability
such items as Staff, Electricity, air conditioning,of ERP to your business. Yet, the companies
Space etc. Server outsourcing to a data centreselect the ERP like they are purchasing any other
looks a better option AMC and License Cost: Youproduct.
can also renegotiate with the ERP supplier forEvery company has a unique business model. So,
license fee and AMC based on the latest orbefore selecting the ERP, one should analyze the
forecasted headcountssuitability of the ERP to the business. There are
Utilising the Lean Business period:many ERPs available in market with very low cost
Normally the volume of business is reduced in theto very high cost. Companies should do the cost
recession period. With the reduced business,benefit analysis of the ERP based on the size of
availability of resources is easier. Due to reducedthe business before finalizing the most suitable
workload, management can also concentrate onERP.
the 'important but not urgent issues' which areTheir can be many other strategies for surviving
normally ignored when the business is in full swing.the recession period based on the individual
So, these resources along with managementbusiness. But, the approach should not only
attention, can be used in many ways to increaserevolve round cost-cutting, it should also be seen
the rate of return on ERP investment and toas an opportunity to strengthen the muscles of
prepare ERP in a better way for the comingthe business to gain the maximum and achieve
boom period.fastest growth once the boom period is back.