ERP systems are some of the most comprehensive enterprise software packages of all. They cover myriad different business functions, from accounting and finance, to sales and marketing, to human resources and payroll, and they enable the seamless sharing of information between these different functions. As such, they streamline and automate manual processes, reduce error, enhance customer relations and ultimately support business growth.
All this sounds extremely positive. So why doesn’t every business have an ERP system in place?
As with any major software project, deploying a new ERP system can be costly and complex. It involves a substantial investment, not just of time but also of human resource. It’s not just about installing a new software application – it’s about integrating with any other applications, migrating across all of your data, testing and training your staff on the new system. It is a major undertaking, and not one to attempt unless your business is truly ready.
But how can you tell if your business is ready?
Understanding ERP readiness
There are two dimensions of ERP readiness you need to consider. First, you need to be sure that your business is at a point where the benefits of an ERP system are going be worthwhile. Very early-stage start-ups might benefit from similar process efficiencies and enhancements to any other business – but those benefits might be dwarfed by the disruption and investment required, and provided that their manual processes are slick and well thought-through, an ERP system may not even make a huge difference.
Second, you need to be sure that your business is able to deploy an ERP system effectively and efficiently. This means being absolutely clear on your budget and resource, both financial and human. It means having a very clear plan and approach to project management. It means understanding the benefits you are expecting to achieve, and how you will evaluate them.
Let’s take a look at these dimensions in turn.
Signs an ERP system will be worthwhile
There are various signs that your organisation is ready to deploy an ERP system, but all are broadly to do with business growth and evolution. You have outgrown your existing systems or processes, whether that is an entry-level software application you purchased many years ago, or a collection of manual processes which were appropriate for your business at one size, but not anymore. Here are some of the signs to look for:
Speed and efficiency restrictions
Are your current systems becoming slower and less reliable as you add more users, and more information? This is a common symptom of simply outgrowing an existing software solution or process, particularly when using entry-level systems which don’t have a comprehensive database architecture sitting underneath.
Are you having to use manual workarounds and elements like Excel spreadsheets to get what you need out of your existing systems or applications? These are a clear sign that your existing approach is no longer fit for purpose – and they risk errors and productivity flattening as well.
Are you unable to move into a new country or market which your current systems do not support? That is a clear sign that you need a broader system, which can simply be localised for the country as appropriate.
Similarly, are you trying to open up new channels such as ecommerce or social commerce, and worried that your existing systems will not support them? Once again, a broader system, which offers both out-of-the-box functionality across a range of channels, and options for integrating with more specialist applications, is a must.
Signs your business can carry out an ERP deployment
You have identified, then, that your organisation is in a place where it will benefit from evolving to a single ERP system. But how can you be confident that you are able to do so effectively?
These are less signs, more a checklist of factors which you should ensure are in place before you begin an ERP deployment.
Clearly, you need to understand how much an ERP deployment is going to cost your business, both in terms of software licenses, installation and integration, training and ongoing licensing, monitoring or maintenance. You need to be sure that you have the budget available – and you also need to understand how you will measure the return on investment (ROI) – that is, how you will know whether the budget is reasonable.
Moving to an ERP system is a major undertaking. You need buy-in from all levels of the business – from the senior leadership who will drive the project forward, to the most junior members of staff who will need to evolve their working practices as they move onto the new platform. In larger organisations, a full-scale internal communications programme is likely to be required to support and enable an ERP deployment – that’s how complex an undertaking it can be.
Whilst it is perfectly possible to outsource all of the technical aspects of an ERP deployment – and this may well be the best choice for your business – you will still need an internal project team to take responsibility from start to finish. This team will be responsible for vast amounts of coordination – between the different departments and functions of your organisation whose processes and data will need to be inputted into the new system, between the people responsible for all forms of internal communication, between the business leads and managers who need to plan the deployment into their own strategies, and more. As with any major IT project, it is vital that ownership of the project is clear and agreed from the outset.
Your ERP system will be a major addition to your IT infrastructure. You need to understand precisely how it is going to fit in – where it needs to integrate with existing systems, where it is replacing existing systems, and what the new workflows and data flows will look like. This requires a really comprehensive understanding of your current infrastructure and work processes.
Security and compliance
Any new technology introduced to your organisation needs to bolster your security and compliance, not restrict it. You must therefore consider carefully both the technology underpinning your chosen ERP solution, and also the new workflows and data flows which you are going to create by deploying it. Security technologies such as firewalls, antivirus and anti-spam protection may also need to be considered afresh.
An oft-neglected part of enterprise IT projects but nevertheless essential – you need to know from the start what success looks like, and how you will know if you have achieved it.
My business is ready for ERP!
Congratulations! Deploying an ERP system can help turbocharge the next phase of your business’s growth, creating seamless flows of information between disparate business functions and helping you do everything from communicating with your customers to planning your procurement more efficiently, more accurately and more quickly.
It is a major project, but with intelligent project management, split into manageable milestones and with careful documentation and checking off of each milestone, it genuinely can run smoothly and straightforwardly. From there, the sky is the limit.
For more advice on ascertaining whether you are ready to deploy an ERP system, get in touch with us today.