Recently, in an interview, I was asked this question:

 

How often do you find that insufficient financial and operations management software represents the weakest link in a firm's ability to grow and increase profitability?

 

Here was my answer:

 

These days, the straight answer to your question is, “Almost never.”

 

When I started in this business, the PC (personal computer) had just been introduced and I was helping most of my clients move off paper-based systems onto their first computer-based accounting system. I also help with automating other areas like digital estimating systems and more.

 

Today, however, most business entities we touch have been through at least one ERP implementation. Some have been through several.

 

That’s why, a few years ago, I created a new acronym for “ERP.” Traditional ERP, I say, was an “Everything Replacement Project”—a wholesale renovation of how an organization works, reports and captures historical data. Most companies today will benefit little—if at all—from another whole renovation.

 

“The New ERP is ‘Extended Readiness for Profit,’” I tell folks now. We are no longer looking for ways to cut costs (even though that is likely to happen as a side-effect), we are looking for new ways to increase Throughput and profit.

 

My answer has an even broader impact for supply chain managers. Increasing Throughput and profit means increasing the demand-driven flow of products from raw materials through production and into the consumers' hands. Cost-cutting and a vain effort at improving forecasts will not get most firms far down the road toward really making more money. Cost have already been cut and forecasts have been honed. It's time to focus on Throughput!

 

Supply chain integration and collaboration technologies are pretty much useless if there does not already exist in the supply chain real and effective collaboration between the trading partners or if there is no effective operational integration or cooperation on the principles that increase the flow of products to the consumer based on actual demand.

 

Technology supports what is in place, for the most part. "Pouring in" technology doesn't magically create collaboration and integration.

 

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