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Issue Date: February 2001

Optimising an ERP investment

1 February 2001

If a company only uses its Enterprise Resource Planning (ERP) system as a financial system, it is missing out on the true potential of its investment. "It is time for organisations to begin using the power of the system they have purchased," says Rob Knowles, Sales Manager at Engineering Informatics.
The power of an ERP system is its inherent ability to share data between its applications. Product Lifecycle Management (PLM) is the management of product data throughout its entire lifecycle - from its creation to its retirement or destruction. PLM thus encompasses critical elements such as lifecycle data management, including document management and all its facets; program management; change and configuration management with workflow automation; and lifecycle collaboration where such terms as 'concurrent engineering' and 'work sharing' are integral. PLM requires the collaboration of many seemingly discrete applications and, by sharing the data they produce, increased efficiency and reduced overheads are guaranteed benefits. "This is where ERP comes in," emphasises Knowles.
Different users will require different 'views' of the data. Finance wants to see costs and expenditure, whilst engineers want to see systems and components. Management tends to be more interested in overviews and roll-ups of the detail. Yet, through the ERP, everyone is looking at the same data.
The ERP gives everyone access to a single source of truth. Not just for viewing and reporting, but also for modifying or updating the data. It is important to remember that, when allocating resources to a project, a holistic approach needs to be taken: one that looks at manpower costs, material costs, time management, process costs and the like. Without an ERP, there is no practical way to assess the implications of change.
There are also functions required for lifecycle management that sit outside the normal functionality of an ERP. These include data and document archiving, scanning subsystems and external document creation systems (office applications and CAD).
Data creation and document archiving are an essential element of PLM as they directly relate to the performance of the ERP. Since the different functions of the ERP use the same data, careful planning of the archive process is required or data moved to secondary storage by one application may degrade the performance of another ERP application. The PLM approach also requires that data created by general office applications, such as word processing, spreadsheets and e-mails, be captured and linked to the relevant objects in the ERP.
"If companies are to make proper use of their ERP investment, formally implementing a PLM strategy is critical. Most ERP systems have all the elements mentioned above, but their activation is not simply a matter of switching them on," says Knowles.
An ERP system requires proper planning. It is also clear that PLM can be a complex combination of many functions of the ERP and that expert assistance is required in its implementation. However, it is also clear that without PLM a large portion of the ERP will remain unused and, more importantly, the considerable benefits of PLM will be negated.
Engineering Informatics specialises in SAP R/3 product data and document management solutions. Concentrating initially on Enterprise Resource Planning (ERP) for the engineering, manufacturing and process industries, the company has broadened its scope to include full enterprise PLM solutions to the general marketplace.
Engineering Informatics
(011) 791 1028

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