How to select the ERP system for engineering enterprise?

Owing to complexity of production processes on industrial enterprises in general and in the machine-building industry in particular and also an important role of ERP in competitiveness (and even viability) such enterprises process (and result) the choice of the ERP system based on which the complex enterprise information system will be under construction further is very important. Besides, and ERP systems for the enterprises with the discrete and mixed production, and process of their selection have the features which follow both from specifics of software solutions, and from specifics of the organization and business of the companies implementing them. At the same time, these features do not cancel the general reasons at the choice of ERP systems, and effectively supplement them.

It is natural that right at the beginning "there has to be a word", i.e. the basic decision of the top management of the company on implementation (or change) ERP systems. It can be dictated by the different reasons, objective or subjective, directly connected with production efficiency or to have the remote relation to it. Anyway after adoption of such solution it is important to specify at least two moments:

• What at the "political" level is expected from the ERP system right after its implementation?
• What at the "political" level is expected from the ERP system in the long term?

The answer to the first question will allow to judge whether the ERP system or effective objectives is necessary to the enterprise cheaper and can be quicker reached using one or several specialized solutions. Also, the acquired information will give the chance to formulate as a first approximation requirements to a specific ERP system which can be detailed and specified further. And these requirements can be used not only when choosing the software product for complex automation of the enterprise, but also to formulate implementation project objectives, criteria of success of its end and efficiency of the created information system.

The answer to the second question will allow to judge a vista shot of development of the ERP system and a possibility of its approval of the perspective plan of development of the enterprise that is directly connected with planning of future costs for IT and the analysis of their payback. Besides, assessment of perspectives of development of an enterprise information system will allow to specify the conclusions drawn according to the answer to the first question. For example, if the current "political" expectations do not require obligatory implementation of the ERP system, but in the short term its existence is necessary, most likely, it is necessary to implement it at once. Similarly, the current expectations can dictate some requirements to the ERP system while perspective — it is essential to expand them or even to contradict them.

One more important result of receiving the answer on the second question is assessment of complexity of maintenance and development of a system (that in mechanical engineering is important). In some cases comparison of results of such assessment to complexity (and cost) masterings, settings and supports of a specific ERP system and reliability of its work can lead even to failure from its implementation and to the choice of simpler, flexible and reliable solution. This assessment influences and at choice of approach to implementation and maintenance of a system — depending on its results it can be recognized reasonable "give" implementation of difficult and nonflexible Enterprise resource planning to specialists of the company integrator, and maintenance and development — to "outsourcers", or to provide training of own IT specialists and to include them in line-up of the team of the project that further development of a system to provide them with forces, or to implement some intermediate options.

Rather big number of staff of their IT departments in this case belongs to the known features of domestic engineering enterprises that often declines the management to the choice of implementation and maintenance of the ERP system by own efforts. And it, in turn, can lead to the fact that the IT service simply "will not cope" with a difficult system in setup and service (to what there are examples) therefore it is necessary or to change the ERP system for simpler in mastering, or to ask for the help the companies integrators. In both cases the enterprise will be forced to spend additional resources (and, most likely, considerable) for bug fix, connected with revaluation of own forces.

At a stage of detailing of requirements to the ERP system for engineering enterprise (if only a system is not implemented along with creation actually of the enterprise) the next specific moment will inevitably be shown. If to perform the generalized production planning, stocks and purchases still it is possible "by eye" (though it, certainly, is inefficient), then at design of products and management of technology processes and the equipment it is excluded. Respectively, practically at all enterprises these or those solutions CAD/CAM/CAE, PDM/PLM, SCADA, perhaps, the billigovy systems (for example, for accounting of own consumption of energy resources), the MRO/TORO systems and other solutions are used. As in many cases it is inexpedient to change their structure "to please to the ERP system", it is necessary to include the requirement of compatibility with the specific products used at the enterprise in the general requirements list to the ERP system. In particular, the question of compatibility of ERP and PDM systems is crucial (if, of course, to use ERP not only for accounting automation) as neither the modules MRPII, nor APS just will be able effectively to work without information communication with base of technical and technology specifications of products.

Thus, at a stage of selection it is necessary to exclude systems not compatible by default to a number of the products used at the enterprise, or to increase their estimated cost and an implementation time taking into account costs of time and money for development of "program gateways" between the ERP system and the corresponding customized applications.

Other unique aspect of the engineering companies is that such company (even not really large) can include not one plant. At the same time, first, there are two organization structures: structure of the company and structure of the specific plant; and, secondly, each plant is unique in principle (even without speaking about the used specialized software solutions) that can be reflected in requirements to the ERP system implemented at it essentially.

Respectively, the company faces the choice: or to implement different "production" ERP systems at the different plants, each of which as much as possible corresponds to their features and also a separate "managerial" ERP system at head office; or to implement one "heavy" ERP system using the industry solutions based on it for the different plants; or to implement the ERP system only at the level of the company, and at the plants to manage MES systems; or to resolve an issue somehow still (for example, to consolidate data at the level of the company by means of solutions of the class CPM/EPM).

Thus, in similar cases it is necessary to speak more likely about the strategy of implementation of ERP and to seriously handle this issue taking into account factors, important for the company, which can treat tactical and strategic, economic, technical, etc.

Also the economic aspect of the choice of the ERP system is very important for engineering enterprises (that, naturally, has an impact and on problem solving, described above). It is known that the domestic engineering industry is today "not in the best form" and, actually, only it begins to be recovered (there is even an opinion that it — only visibility, and crisis in the domestic industry only goes deep). Thus, costs for IT projects which mining industry, the banking sector, a telecom or trade is able to afford are available only to the largest industrial associations, but not most the enterprises. Respectively, budget restriction when choosing the ERP system by the companies of the industry can play very important if not defining role. Therefore, it is possible to say that domestic engineering enterprises in the majority will refuse "difficult decisions" for benefit of solutions of "the second level the" ('Tier 2') offered as foreign (Infor, Microsoft, Epicor, Lawson, QAD, etc.), and domestic (Galaktika, Parus, Compass, "Informkontakt", "KST", etc.) suppliers.

Except above-mentioned (most likely, not only domestic) it is also possible to refer to features of engineering enterprises "non-standard" of production organization on each of them. At the same time the specified "non-standard", as a rule, is the source of competitive advantages of the company reached as a result of the evolutionary and revolutionary changes in production organization happening over all history of development of the relevant enterprise.

It is natural, that in similar conditions "business process reengineering", which is often imposed by developers of ERP systems and integrators in order that "adjust the enterprise to a system" is unacceptable. This moment shall be considered at ERP system selection as many solutions just have no that flexibility which is necessary for accounting of all features of the enterprise doing by his leader in the industry. In such cases, most likely, it will be more reasonable to refuse insufficiently flexible system, even despite all its advantages in other areas.

If it is decided to implement a system using the company integrator, the ERP system, actually, is selected together with integrator (i.e. or a system, and then integrator is selected, or on the contrary — at first integrator). At the same time presence at integrator of experience of implementation of ERP systems at other engineering enterprises and also existence in a project team of the specialists understanding production specifics is crucial. Ideally control automation by production should be performed in parallel with its technical and economic optimization (financial value analysis — FSA), however even without such optimization understanding data domain (and in questions of implementation of ERP systems) specialists can reduce essentially costs for the subsequent operational development and corrections of a system which can arise because of incomplete understanding by a project team of production organization and its specifics. In this case it is more logical to enterprise of mechanical engineering "experiment on himself", implementing the ERP system by forces of own specialists, than resorting to services of the company integrator with insufficient industry expertize.