ERP in Mexico – What is an ERP and what is its evaluation process?
An ERP in Mexico (Enterprise Resource Planning) is a widely used information management system that integrates and automates many of the business practices associated with the operational or productive aspects of a manufacturing company. Such systems are routinely employed in the maquiladora industry.
ERP systems are characterized by being composed of different modules that are integrated into a single application. These modules are of different uses, for example: production, sales, purchasing, logistics, accounting (of various types), project management, GIS (geographical information system), inventories and control of warehouses, orders, payroll, etc. An ERP in Mexico can be defined as the integration of all of these distinct modules. The Enterprise Resource Planning system integrates everything necessary for the maintenance and operation of a company’s business processes.
The main objectives of ERP in Mexico are:
- Optimization of business processes.
- Access to all information in a reliable, accurate, and timely manner (data integrity).
- The ability to share information across all components of a Mexico manufacturing organization.
- Elimination of unnecessary and superfluous data and reengineering operations.
The fundamental purpose of an ERP in Mexico is to provide support to customers, fast response times to their problems, as well as to serve as an efficient information management that enables timely decision-making and lowering total operating costs in Mexico.
Once the ERP in Mexico has been considered and its objectives are defined, it is important to ask the following questions:
- Is the company willing to invest in an ERP in Mexico?
- Is the company willing to change work processes in order to make itself more efficient?
- Will the management or board of directors commit to acting on the basis of information provided by the Enterprise Resource Planning system?
- Is the Mexico manufacturing company willing to commit the time and resources required to implement the system?
Once the above 4 questions about implementing an ERP in Mexico have been answered positively, an organization can continue with the process of evaluating Enterprise Resource Planning systems. Two things must be considered, in particular:
- Which ERP system to choose from.
- The consulting firm that will carry out the implementation process.
The ERP in Mexico to choose from
There are a number of ERPs that can be chosen, from the best known (SAP, Oracle) to the lesser-known. At this stage, the maquiladora manufacturer will have to choose the type of ERP that suits its needs. Several points must be considered:
Information needs (For clients, managers, and operators)
It is recommended to consider a series of reports that are used before the implementation of the ERP. These reports can be compiled using “old Software” or can be produced manually. The important thing is to be clear what the current needs of information of the company are. If this important point is not considered, the company risks choosing an ERP in Mexico that does not adequately address organizational reporting needs.
Also, at this point the company management, as well as all information users must define what other reports are required that the current software does not provide, so that they can be effectively provided.
Budget for the acquisition of the ERP in Mexico
It is important for a company be clear about the budget it has set aside for the acquisition of the system, as well as, for the contracting of the consulting company that will carry out its implementation.
As for the price of an ERP. It is recommended that a company that intends to acquire one analyze all of the versions of ERP systems that exist in the market. Currently, ERP systems can be acquired at a cost of US $10,000 to millions of dollars.
In order to determine which ERP in Mexico to choose a cost-benefit analysis must be conducted. Sometimes an ERP that will serve a particular company’s purposes may be slightly less complete but much more economical. Paying more for a more robust system may not be worth the difference in additional cost.
Vertical or Adapted ERP
Today there are endless software options that are available to meet the needs of a diversity of companies. For instance, there are ERP software companies that produce specialized products to be used in hospitals, hotels, chemical distributors, etc.
When choosing an ERP in Mexico to be utilized in a manufacturing environment, however, it is important to consider buying a software product from companies specialize in this segment of the market.
The consulting firm that will carry out the process of implementation
It is important to be familiar with the team that will carry out the implementation of the ERP system in Mexico. If possible, check the background and reputation of the consulting company from some of their customers. It is especially important here to define the scope of the implementation of the ERP in Mexico, from two points of view:
- As far as the consulting company has responsibility for any problems that may arise.
- To the extent the company that acquires the ERP is responsible for any problems that arise.
Acquiring and implementing an ERP in Mexico is not a complex or difficult task. Many manufacturing companies have done it successfully and to their lasting benefit. It does, however, require an adequate allocation of time, as well as monetary and human resources to be able to carry out such as project. Going through this exercise successfully will result in your company benefitting in the following particularly important ways:
- Automating and streamlining business processes.
- Responding to market conditions with greater agility and effectiveness.
- Acquiring the ability to improve strategic decision making.
- Reducing overall operational costs
- Enhancing customer satisfaction and loyalty.