Why is it so hard to capture project cost in ERP?

Four reasons why your enterprise resource planning software can come up short on cost management in complicated manufacturing processes.
  • Reason #1: Disparate Systems

  • Reason #2: Multiple divisions/locations

  • Reason #3: Multiple modes of operation

  • Reason #4: Usability

  • The Solution

Carrie Ghai, IFS North America

Carrie Ghai, senior business software consultant, IFS North America

Reason #2: Multiple divisions/locations

Companies with multiple divisions and locations often have difficulty capturing project cost. Any industry that has a lot of global locations, or people working in very remote locations, will be hindered in this regard. This is often a hardware-related issue. If a company lacks the technical infrastructure to offer true global ERP, run on a single instance of the software, a single database and a single server, they will not have real-time visibility into project cost.

Reason #3: Multiple modes of operation

Some businesses, like manufacturers that operate in make-to-stock, make-to-order and engineer-to-order modes, are always running in multiple modes of operation with multiple business models. Others, including mining, utility or oilfield service and machinery companies, may run in different modes of operation at different points in a business or asset lifecycle. With a single business application not designed to handle this diversity, it can be difficult to manage multiple modes or multiple stages of an asset lifecycle.  This means that many of these businesses are running multiple ERP products to suit each mode. This in turn throws up the barriers that make it difficult to track project cost.

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