Just as every business has its own needs and challenges, every ERP system meets those needs and challenges in different ways. When a company starts researching ERP software, it wants a solution that will begin reaping benefits as soon as possible and serve it well for years to come.
This article outlines the key steps organizations need to take to ensure they choose the right ERP system and implementation approach – software and processes that are tuned to their problems, needs, skills, resources, and industries.
Identify problems and pain points
When a company plans to implement a new ERP system, they likely know why that implementation is necessary. But, at this early stage in the process, even the most well-informed may not anticipate all the problems and pain points their organizations really face. This is especially true if those organizations rely on cobbled-together stacks of outdated, disconnected programs that create data silos and prevent teams from effectively collaborating.
Choosing an ERP system without mapping out the business’s current and projected future needs is a risk that can leave firms saddled with an expensive, time-wasting ERP implementation that fails to address root problems. But this doesn’t have to happen.
The key to the long-term success of an ERP implementation is effective – and early – communication. While researching available systems, it is critical to speak with employees about the issues they’re facing with the company’s current business management processes.
To better understand and pinpoint these issues, IT and business decision-makers should meet with department leads one-on-one or even in a ‘focus group’ setting. They can also consider administering a companywide survey, so everyone – regardless of rank, department or length of tenure – can share their current pain points and suggest remedies.
Organizational buy-in is critical to ERP implementation success. So, it is important to make sure that employee voices are heard, root problems and pain points are reviewed and recorded, and the chosen system can address those issues in a consistent, meaningful way.
Revisit the existing tech stack
This falls closely in line with identifying problems and pain points. At this stage, businesses should carefully examine their existing tech stacks, asking questions like:
What works, what doesn’t work, and where are the weak links and silos? (Employee knowledge gathered from the abovementioned interviews/survey will help here.) Do these programs have the functionalities the company needs now and will need in the future, and can the technology scale up or down with the business? What security issues need to be addressed, and how much tech support is provided? Are the programs modern, agile and flexible, or are you looking at software that’s been discontinued or labelled as unsupported by the vendors?
The answers to these questions will help companies determine which programs in their tech stacks should be kept and which should be replaced. It’s possible that all the programs will need to be replaced for the company to stay ahead in today’s fast-paced, rapidly changing market. Don’t be surprised if that happens – and prepare in advance to use resources accordingly.
Review resources and set a budget
Before embarking on the ERP implementation journey, companies must take account of their resources: talent, time and money.
Organizations should consider which employees will be part of the ERP implementation team and the amount of time that can be devoted to completing the ERP implementation life cycle. Cost is also a major factor, and companies should calculate how much they can comfortably spend.
This last consideration is critical. Before committing to a specific ERP solution, count the costs. Break expenditure into two categories: the base price of the ERP software itself and any ongoing costs that could result from the implementation. These may include the costs of hardware and facilities changes, security and maintenance, staffing and onboarding, and third-party applications.
Business leaders will also be interested in the return on investment (ROI) that the ERP implementation can provide. After delineating projected costs, it is a good idea to estimate that ROI ahead of time. This will give everyone a fuller picture of the monetary benefits the ERP investment can bring, and, ultimately, it will help determine what ERP system is best for the company.
Choosing ERP hosting and accessibility options
When designing budgets and making ROI calculations, an important question to ask is: ‘How will the ERP system be deployed?’ ERP software is generally hosted in one of three ways.
SaaS (Cloud-based): The software vendor is responsible for securing, maintaining, updating and storing the ERP system on its own servers.
Private-cloud (On-premises): The company that is implementing the ERP system is responsible for securing, maintaining, updating and storing the software on its own servers, in its own physical facilities.
Hybrid: The ERP vendor and the company implementing the ERP system share the responsibility of securing, maintaining, updating and storing the software.
The deployment option a business chooses defines the ERP system’s ongoing costs. A SaaS license eliminates most ongoing costs because much of the responsibility rests on the vendor’s shoulders. But, in a private-cloud situation, the company implementing the software must pay to keep its data secure, to maintain its physical servers, and to hire, onboard and train enough IT employees to keep the software running smoothly.
Different ERP systems also come with different levels of data accessibility. For businesses to function in today’s marketplace, they must be agile and connected. And, for businesses to be agile and connected, every employee – whether front-office, back-office, field or remote – must have access to the real-time and historical data they need to do their jobs. Keep this in mind when researching and evaluating ERP options. If a business management solution doesn’t offer this level of data accessibility or charges extra fees for access to historical data, then it’s probably not the right solution for a modern, digitally transformed company.
Remember industry-specific needs
No business is an island. Each one is tied to the regulations and requirements of its industry. Take these needs into account and choose an ERP system that has tools to help the business maintain industry-standard regulatory compliance and has built-in functionalities for managing, streamlining and communicating with supply chain touchpoints.
It is also advisable that the chosen ERP system is designed to provide a 360° view of an organization – including data for each of the company’s brands, locations, entities, suppliers and customers.
Preferably, such an ERP system would be designed specifically for the industry in which its users operate. Many ERP vendors have developed industry-specific editions of their software suites. Reviewing these specially designed options can help companies narrow down the list of available ERP systems and choose software that is tuned to their workflows and processes.
Free resources for decision-makers choosing ERP
Choosing the right ERP system can feel daunting, and so it can be helpful to research with industry-specific ERP handbooks, whether for manufacturing, distribution, construction and retail-commerce, that are designed to help companies cut through the cluttered market and find the software that best fits their needs.
By defining the standard features to look for in any ERP system and discussing the functionalities and industry-specific features companies need, a business’ software implementation can manage shifting industry requirements and gain an edge over the competition.
This is a sponsored article by Acumatica.