Choosing and implementing an Enterprise Resource Planning (ERP) system is a big decision and investment for any business and making sure you get the right returns from this can be challenging. The business case for this investment is often based around increased productivity and efficiency across the business. Delivering this and a system that supports the business for the long term is key.
There are 10 essentials to consider before you invest in a new ERP system.
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Don’t buy just for today
Make sure the system you buy can support your changing business. Many ERP systems have a wide range of features and functionality, much of which you might not need when you first put in the system but in today’s climate businesses change all the time and having a system that can support this is a critical success factor. This includes acquisitions, the growth of your business or moving from B2B to needing ecommerce capability. All of these can change the modules you use within your ERP and the number of users you require.
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Give the cloud serious consideration
We know many businesses are still nervous of the cloud but we always encourage businesses to look at the benefits. The cloud gives you the ability to scale your use of the system as your business grows and can save you both time and resource as you no longer have to support servers, maintenance and security. If fully moving to the cloud is too much, there is always the hybrid option. You still have some of your system running on an on-premise server but you move large parts of your operation onto the cloud. With systems like Microsoft Dynamics 365 this is all done with Azure as part of the service.
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Ensure top-level sponsorship
Implementing an ERP is more than just a technology change – it’s a business change. The success of your ERP system is measured on the basis of process improvements and operational efficiency. If all you do is replace your current system with the new one, you won’t see the required improvements across your business. Without senior management support to free up resource during the implementation and take on the required business changes, the business case is doomed to failure.
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Strictly manage the scope and budget
ERP implementations are large, complex projects that require a deep dive into your business processes. It can be easy to let scope creep if another requirement is identified. This will ultimately lead to extra costs and a delay in launching the system. Going live with the essential requirements to start with allows you to see the improvements as quickly as you can. You can then follow this with subsequent phases that contains extra requirements.
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Shift the culture
As mentioned, this is not just a technology change but a complete business change. Having the right culture and support from users within your organisation is key to embed the new processes and help drive those ongoing improvements. Engaging staff upfront about the changes coming, providing them with the resource and creating a change management process to support is key.
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Carefully consider the need for customisations
Customising your ERP comes at a high price. It means you won’t be able to update your system to a newer version as easily. You are effectively anchoring yourself to the version you are on. The risk of this is you won’t see the benefit of any new features realised on the product and you will be risking your version going unsupported. Many businesses will have historically went down the customisations route but modern ERP systems are much more configurable and so don’t need customised as heavily. There is now a whole market place available for custom made additional modules where you can buy these out the box. The added benefits of add-on’s rather than customisations is that this doesn’t complicate updating your system.
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Make sure you can commit time to the project
A key part of any ERP implementation is working with your implementation partner to understand the inner workings of your business, every process, system and database. This requires internal resource with the correct knowledge base to provide this. Without this resource the project will become challenging and won’t provide the same level of success.
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Ensure high data quality
‘Garbage in garbage out’ is a common expression used when talking about data and this applies to your new ERP system. A data cleaning exercise as part of an ERP implementation is essential to get the most out of your ERP and the capability within the new system you need to ensure the integrity of your information. This is something that should also be an ongoing focus – continuing to improve data quality can continue to drive improvements.
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Remember the project isn’t over when you’re live
Once you have cleaned your data, mapped your process and implemented the new system it doesn’t stop there. The new system will likely have functionality to help you continue to improve your business by reviewing processes and using your data to identify areas of improvement. The companies that are most successful are the ones that continue to treat this as an ongoing business change project.
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Choose the right partner
Remember you aren’t just choosing a technology solution but an implementation partner as well. Both will have an impact on your business and to make your implementation a success you will need to find a partner that not only knows the solution but gets to know your business. Investing the time upfront to allow this will be crucial to your implementation.
When it comes to choosing and implementing a new ERP system there is a lot to think about and a lot to do to really drive business value. If you do manage these though your business will be unrecognisable, with huge efficiencies across your operation and a range of sophisticated tools to make your data more accessible.