The role of core systems in companies and key points for building a successful system
Business success is highly dependent on information systems working smoothly behind the scenes.
Core systems play a central role in effectively managing a company’s data and business flows and optimizing operations.
This article provides a detailed explanation of the definition, functions, benefits, and key points of implementation of core systems.
Learn more about our approach to core system development here .1. Main functions of core system
Judging from the definition of the term “systems that support a company’s core business,” the target business/functional scope is thought to vary depending on the industry. What they all have in common is that core systems provide the following key functions to support businesses in response to the various challenges that companies face on a daily basis.
1.1 Data management
Support data-driven decision-making by efficiently managing large amounts of data and providing each department with the information they need quickly and accurately. This includes the ability to centralize a company’s business data, such as customer information, sales data, and inventory data, making it easier to access and analyze.
1.2 Business process support
The core system automates and optimizes business processes ranging from accounting to manufacturing and sales to improve operational efficiency. Improve your company’s productivity by reducing errors, reducing work time, and optimizing the allocation of resources.
1.3 Information sharing and collaboration
By centrally managing data in the system, information sharing within the organization becomes smoother and cooperation between departments is strengthened. This allows different departments to make decisions based on the same data, keeping the entire organization aligned.。
With these capabilities, core systems strengthen a company’s competitiveness and help deliver value to stakeholders.
2. Type of core system
There are several different types of core systems depending on their functions and characteristics. There are differences in the scope of work and company size that each type supports.2.1 ERP (Enterprise Resource Planning)
ERP systems integrate a company’s various departments (such as finance, human resources, manufacturing, sales, etc.) and allow these departments to share a central database, ensuring data consistency and optimizing business processes. . It is especially suitable for large companies and companies with complex business processes. This is a system that aims to comprehensively manage in-house data in an integrated manner.
2.2 CRM (Customer Relationship Management)
CRM systems help businesses manage and optimize their relationships with customers. Centralize customer data across sales, marketing, and service areas to enhance customer communications. For companies whose main business is to provide services to customers in BtoB, the CRM system can be called the core system.
2.3 SCM (Supply Chain Management)
SCM systems efficiently control all processes from production to supply. Optimize the entire supply chain, including inventory management, supply planning, logistics, and procurement, to help businesses deliver goods and services quickly and cost-effectively. In the retail, manufacturing, and wholesale industries, this area is considered to be the core system.
3. Key points for implementing core systems
Introducing a core system can improve a company’s business efficiency and data management, but planning and consideration are essential for its implementation. Below are some points to keep in mind when implementing it.
3.1 Organizing business needs
Clarify the purpose and expected effects of system implementation, and thoroughly organize your business needs. By understanding which business areas you want to optimize and which processes have issues, you can determine the direction of system selection and customization.
3.2 Building a project team
System implementation is not just a project for the information systems department. It is important that members with on-site business knowledge and IT specialists work together to ensure that the system is suitable for the business.
3.3 Communication with vendors
Communication with system vendors is also an important element. Get them to understand your company’s business model and work flow, and make sure the system is built and implemented in a way that meets your business needs. Since this is often a long-term commitment, be sure to confirm each other’s stance and contract type.
3.4 Planning data migration
Migrating data from an existing system to a new system is a very delicate process. It is important to plan and test your data in advance to ensure a smooth migration while maintaining data integrity.
3.5 User training and support
After the system is introduced, adequate training and support must be in place to ensure that end users can use the new system effectively. The benefits of implementation are maximized only when users understand and utilize the system. Introduction of a core system is an important step in realizing business evolution and corporate growth. By taking a well-planned approach and keeping in mind the key points, you can enjoy many benefits and increase the competitiveness of your business.
4. Hurdles and solutions for core system construction projects
There are many benefits to implementing and operating a core system, but many companies also face hurdles. Here we discuss common problems and their solutions.
4.1 Difficulties in selecting an appropriate system
Hurdles : Finding a system that perfectly suits your company’s needs can be difficult. With so many packaged software out there, there are countless options, such as which system to use or whether to develop from scratch for your own company, making selection a difficult task.
Solution : First, if the execution method is common in a general business area, list the packaged software and persistently research and consider a system with more functions and a price that meets your needs. It will take shape. On the other hand, in business areas where the business area or execution method is highly unique, modifying the package or trying to match the business to the package can actually increase costs. In that case, it would be desirable to develop the system from scratch and combine it with packaged software to assemble the system configuration.
4.2 User resistance
Hurdles
There is often resistance from users to introducing new systems.
Solution
It is important to involve users from the early stages of a project and improve the system while incorporating their feedback. To this end, it is important to position system construction projects as a management issue and encourage collaboration among related departments, rather than having the information systems department or the business department in charge independently draft the project. We will also provide you with sufficient training and support to help ease your adjustment.
4.3 Over-customizing the system
Hurdles
Excessive development and customization can complicate the system, making it difficult to update and scale in the future, or significantly exceeding budget and schedule.
We identify as many mismatches between business processes and systems as possible at the initial stage of the solution
, clarify the scope and direction of execution, and plan to keep development and customization simple but effective.
4.4 Cost and time overruns
Hurdle
There are many cases where projects end up over budget and schedule.
Solution
We ensure a clear project scope, frequent communication, and progress monitoring to catch and deal with risks early. If the project is a long-term project, it is necessary to set detailed milestones and conduct quality and delivery inspections as appropriate.
4.5 Data quality issues
Hurdles
Data quality issues may arise during data migration and operation.
Solution
company, we conduct thorough verification and identify a system that reliably maintains data, and then perform detailed data verification with that system to eliminate uncertainties (such as irregular response logic). It is important to go. Rather than comparing all data with one system, it is also important to determine comparison targets for each data item.
4.6 Throwing everything to the vendor
Hurdle
IT vendors may be system professionals, but they are not internal operational/business professionals. If a system construction project is abandoned, the quality of the system may deteriorate due to lack of confirmation, and in the worst case, the project may fail.
Solution
It is necessary to clearly decide on the division of roles with the outsourcing company. In addition to deciding on the major division of roles, it is also necessary to clarify the division of tasks as specific tasks in the schedule. Additionally, in daily communication, it is necessary to coordinate work exchanges and constantly seek the optimal method that is easy for both parties to work together.
