With the growing complexity of modern business, combined with an ever-changing landscape, it is imperative that companies harness the best technology available to assist them. They need a system that is able to manage the multiple aspects of their enterprise effectively, to provide access to timely and accurate data in order to make decisions, and identify opportunities for future growth and process improvements.
The most effective way to achieve this is to implement Enterprise Resource Planning (ERP). This will provide you the necessary tools to perform the functions described above and many more.
Many companies are already using ERP effectively and have reaped the rewards it can offer. Countless more, however, still have yet to embrace the technology.
Below we’ll break down the ERP implementation process to ensure yours is as painless as possible.
Select a System and Vendor
The first challenge is to do research on the various vendors available and the range of systems, features, and benefits offered. There are a number of vendors offering quality ERP products (more than 500 ERP applications exist) and services. As a result, competition is fierce and the good news is that this has resulted in aggressively competitive pricing.
Ensure the system you select is highly stable, has the features necessary for your environment and the requisite integration capabilities. You also want to ensure it is as future proof as possible and can be scaled and upgraded with ease.
Look at the reputation of the vendor. You want to know that they are competent, knowledgeable and provide great after-sales service. It is also important that the ERP implementation services they provide are fast and efficient.
This will hinge somewhat on whether the vendor you decide to go with is a cloud ERP vendor or an on-premise provider. Software Advice details that the major differences between cloud and on-premise systems are that one is that cloud systems are considered an operating expenditure because they’re typically priced on a subscription (monthly or annual) basis whereas on-premise solutions is considered a capital expenditure due to their large, one-time cost.
ERP is a significant investment and (ideally) you will have a long-term relationship with your chosen vendor. You want it to be a happy one, so do your homework on which style of ERP and vendor suits you best.
Implementing the System
The majority of people are, by nature, averse to change. With the current pace of change of business, this will be an ongoing challenge for business leaders. Being aware of some of the potential challenges you are likely to encounter, will make the process easier, faster and ultimately more effective.
Let’s take a look at a few issues you might encounter:
Commitment from Top Management
Any significant change will only be effective with a commitment from senior management. Sadly, and surprisingly, this does not always happen. The best way to ensure their commitment is education. Once they understand the benefits and appreciate the value it will add to the business; they will champion the project.
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Orientation and Training Reign Supreme
It is essential that all departments buy into the concept. Without internal commitment, the project is doomed from the start. To achieve the team’s adoption of the new system, education, orientation, and training are necessary.
Without adequate training and education, a perfect system will be of little value, since it will not be used correctly or to its full potential. It is imperative that you get buy-in from all parties that are involved.
It may require a bit of initial handholding to allow staff sufficient time to ease into new processes and applications. Don’t breeze through this process. Once the staff begins to see the benefits, they will happily accept and appreciate the ERP system.
High staff turnover is a reality of modern business, particularly with Millennials. And it’s likely the Igen will be even more likely to change jobs frequently. Factor this into your planning and ensure new recruits are brought up to speed on the system when they start.
Timing of Implementation
Effective ERP implementation does not happen overnight. Normally, it is a step-by-step process that evolves and matures over time. Be aware of this and ensure you sufficient budget time and staff involvement to prevent other aspects of the business from suffering.
Top Project Management
You want your best people involved in the implementation process to ensure a smooth, painless rollout. The vendor will obviously be heavily involved, but it is vital that your internal teams are involved from the start and are as knowledgeable as possible.
A large part of the final cost of a new ERP system is the customization cost. It is highly beneficial to have it entirely customized for your specific needs, just be aware that it is going to cost money and take time.
Another cost to factor is the ongoing maintenance costs. If you opt for an on-premise solution, your ERP system will require maintenance from time to time. If neglected, it will have a detrimental effect on your systems. On the other hand, cloud ERP applications usually provide support and assistance as part of the monthly or annual subscription fee you pay.
ERP is a complex and powerful tool. You want to ensure that you test all aspects of the system across a variety of situations and circumstances. Failing to do this correctly will cause unnecessary issues down the line. Get it right from the start to get the maximum ROI.
ERP has the power to provide many advantages to your company, such as highlighting inefficiencies, improving overall company productivity and through that, enhancing customer satisfaction. It is a worthwhile investment or operating cost that, if done right, will revolutionize every aspect of your business. However, it is imperative that it’s implemented and managed correctly to benefit from the full potential it has to offer. Keep the above aspects in mind as you vet ERP providers, and remember, the more thorough you are, the better.