I have been a part of many ERP implementations during my 12 year career. Although every customer’s business is different, many of the issues they face are the same. However, the solution to these issues is not always the same.
Because of the benefits that ERP can bring, and the long period during which those benefits may manifest themselves, ERP implementation is always a strategic investment for an organization.
ERP can increase productivity, reduce operating expenses, improve information flow and enhanced performance management and provide real-time ad-hoc reporting if implemented correctly.
Without informed selection and well-planned implementation there can be huge cost overruns, and unrealized ROI that can leave an organization nothing to show for their investment. The first thing an organization should do is determine if an ERP solution is needed at all.
I have listed some of the business requirements that can help you make this decision. If an organization is experiencing one or more of the following, it may be time to consider implementing an ERP solution or replacing the current one:
1. Multiples—multiple locations, multiple currencies, multiple cross-border vendors/customers.
Whether your business has grown to include multiple locations or expanded to sell or purchase in multiple currencies or your vendors and customers have multiple locations, it is important to be able to accommodate this new way of doing business with your business management systems. Look for a system that has the flexibility to manage and report on multiple locations of your own business along with the ability to manage national accounts for your customers and vendors. And further, if you do business in various currencies, look for a system that is able to accommodate business practices (invoicing, costing, and more) in multiple currencies.
2. Reporting - The most commonly used tool to get critical information out of the business is a manual, labor-intensive process.
Do you budget and track your projects and jobs outside of your current accounting system? Can you track work in progress and job completion percentages without heavy manual intervention? Times are tough. You need to be able to make good business decisions with up-to-date information, and you need to do this with little manual input so you and your team can focus on revenue-generating activities. If you can save five to 20 hours a week or more spent on getting this data in your hands, imagine what you can do with that extra resource. Perhaps you can roll that part-time payroll expense back into the business, or repurpose that person to another area of the business that will increase your ability to generate revenues.
3. Information Availability—you have more people within your organization who need access to important customer data, and the only way they can get that is through the users on your accounting system.
You started as the salesperson, but now you have expanded your list of customers and the team of people who support them. You have a salesperson or team, someone to handle customer service after the sale, and a group of people managing the invoicing, fulfillment, and accounting for your business. To retain customers and differentiate your company in this economic environment, you have to offer not just great, but excellent customer service and support. To do this, your team needs to be able to access customer information and history in a timely manner. So it is essential that your system is integrated and accessible to many parts of the team. Your system should incorporate seamless visibility to all of these groups in as real time as possible to get to those levels of service and support. The end result is happy customers, but there is an additional payoff: Increased sales.
4. Inventory Complexity—your inventory management requirements have become significantly more complex.
You used to have fairly simple inventory management requirements. However, as your business has grown, you find or suspect there have been some lost sales due to your current inability to track, forecast, and maintain inventory levels. Your inventory requirements have now grown to include multiple locations with specific costing and stocking needs at each warehouse. Or, you wonder if you really need to keep as much stock as you have, which may be driving up costs unnecessarily. You may now require bill of material assemblies or item kitting functionality. Either way, you need better visibility and management. Look for a system that has the ability to forecast, track and report on inventory as well as being able to use variable costing methods for inventory.
5. Software Dictators—your company cannot streamline or gain efficiencies in operations, as your software cannot facilitate the new processes.
You have grown your business to this point using processes that are typically dictated by the systems you use. This may be comfortable for your team, but is it necessarily the most efficient and effective way to conduct your business today? And if it isn’t, how can your current system accommodate changes in your processes? When investing in the future of your business, the systems you choose should have the ability to be tailored to how you need to do business today, and also have the flexibility to adapt to how you will be doing business in the future. Look for systems that have options and are flexible and scalable to help you streamline your current, potentially inefficient software-dictated processes.
By the time you realize your system is inadequate, it’s probably too late. Seriously look at your business and start tracking ineffective and inefficient processes. You may already have an idea of what these are, but are not sure what to do next, or where to turn. Start by contacting your current Business Partner, if they are not able to help, give BAASS Business Solutions a call, you may like what we have to offer.
