Optimizing Your ERP Blog Image

Optimizing Your ERP System

This post is a recap of the webinar presentation provided by Jeff Nelson and Darrin Morgan of Key2Act.


Many companies utilize an enterprise resource planning system (ERP), a single massive database solution to manage a business’ core processes. Traditionally, accounting is a core function that utilizes an ERP system. ERP systems manage processes such as purchasing, payroll, accounts receivable, accounts payable and stores all of that valuable data. Most importantly, ERP systems, like any technology, solve problems. But are they?


The Business Triangle

Central to any change or transformation is the Business Triangle in which people, process and technology are all equal and essential parts.

Business Triangle
Source: Synergy 2019 Presentation by Key2Act


Every business has and will always have people. Regardless of how much automation is available or how much work will be left to robots, people will still be needed. However, people are also the most significant variable in this equation. People all have different perceptions, personalities, and motivations that affect productivity.


According to the Oxford English Dictionary, a process is a series of actions or steps taken to achieve a particular end. For example, in an accounts payable process when a vendor invoice arrives, an accounting staff member evaluates the invoice accordingly. Once the accounting clerk enters the vendor in the system and confirms that the amount is correct, he or she applies it to the appropriate job and issues payment. There is a defined process of entering the invoice into an ERP system and the output of payment to the vendor.



When we look at technology in the accounting world, it is quite a storied history. We start with the tally sticks had notches were carved on bones or sticks to record amounts, and that evolved into the pencil and paper system of documenting numbers. In the late 1800s, Dorr E. Felt invented the comptometer, which was a simple mechanical device that allows for simple 4-function math. The adding machine took the comptometer to the next level by adding a paper for the machine to print out the functions. Transitioning from mechanical device to an electronic machine, the comptometer and adding machine evolved into the current 10-key electronic calculator, which sits on most people’s desk to this day.


In the modern era of computers, the accounting team was the lucky ones to utilize those first computers in the office. Many accounting people used Lotus 1-2-3 and Excel to accomplish many tasks. Large enterprises traditionally used database and ERP systems. However, when those systems became accessible and affordable for small to midsize businesses via personal computers, it became a game changer.


A New Triangle

Today, when discussing technology, it is a combination of hardware and software. However, technology is simply a process accelerator tool. Given that, is the business triangle still an equilateral triangle? Which becomes more important – people, process or technology? Technology is the least important. The main thing that technology is capable of is speeding up a business process to make a person’s work more productive. Therefore, if you have a bad business process implementing technology to do it faster does not benefit your company.


According to Bill Gates, principal founder of Microsoft, “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.”

New business triangle by Key2Act
Source: Synergy 2019 Presentation by Key2Act

Focus on Process Improvement

Interestingly enough, to determine requirements for any system implementation, a thorough review of current workflows and processes is vital. Once you document existing processes, you will be able to identify process bottlenecks. Technology may help to reduce this time and improve this current process. However, you will not know where technology can benefit unless you analyze the process through a thorough system review.


There are several business process improvement methodologies. Six Sigma is one process that follows the following guidelines.

D – Define
M – Measure
A – Analyze
I – Improve
C – Control


Defining the process in a thorough system review allows you to establish benchmarks. These benchmarks measure and track key performance indicators. Teams can then analyze if their processes are as efficient as they can be and identify areas for improvement. Once the areas of improvement have been made and measured, the organization can set up controls. This ensures that the company can maintain those levels of improvement. Six Sigma is not a linear process. It is cyclical because organizations must continually reevaluate and strive for ongoing improvements. There is always room for improvement and ways that organizations can make minimal adjustments to become more efficient.


Another business process model and notation is the swimlane flowchart. A swimlane chart outlines an entire process and shows the connections between different areas or departments. This is critical because it allows everyone to see how vital his or her function is to the overall process. For example, many mechanical contractors have a call-to-cash process. Delineating the process in detail from when a customer makes a request for a service call, a technician is scheduled and dispatched to the customer, the technician to complete the work, and the company to get paid, allows everyone to see how important the data that they are entering might affect other users to complete their job.


Systems Reviews and ERP Systems

Because ERP systems are single database solutions that define many business rules, organizations rely on this data to make crucial business decisions, so it is crucial that the information is consistent and up to date at all times.


However, not everyone uses the system as intended and enters the data correctly. That is why system reviews must be conducted regularly to ensure that the system is continuing to meet the needs of its users and improving current processes.


The Key2Act professional services organization collectedly boasts over 150 years advising customers in project and field service organizations. Their charter is to help customers maximize the investment in their software. The professional services team conducts comprehensive systems reviews where the consultant spends time with customers to assess an organization’s use of their software and provides an objective view of the people, processes, and technology across the business. Click here for more information about Key2Act.