Tag Archives: ERP Budget

Your 2019 ERP Software Selection Guide

Think it might be time to embrace an Enterprise Resource Planning (ERP) solution or upgrade outdated systems to give your business a competitive edge in 2019? Gain total insight into the ‘why and how’ of modern ERP software implementations to help you take action.

In just a short time there’s been momentous leaps and bounds in the way technology enables us to communicate, capture and use data, and lighten the load on our human workforce when it comes to manual tasks and complex analyses.

The business world has changed enormously as a result. Innovation in business models, products, and services is now seen as essential to maintaining a competitive advantage.

However, there’s still room for progress in many organisations, who aren’t yet fully benefiting from technologies that streamline and automate daily tasks and provide the insight required to improve decision-making and customer experience.

Which is why many savvy C-suite leaders will make 2019 the year they harness the power of Enterprise Resource Planning (ERP) software.

If you want to tackle digital transformation in your small to medium enterprise in 2019, this up-to-the-minute guide covers: why an ERP solution is necessary; how to choose the most effective ERP software; and what makes for a successful implementation.

A golden era for ERPs: why 2019 is the ideal time to upgrade

The two most likely triggers for CEOs and CFOs to consider a new ERP solution in 2019 include:

You’ve outgrown your basic accounting software: Your company has grown larger or more complex and your existing software doesn’t allow you to report in a timely way and provide high-level advice to the Board. You’re tired of manually compiling consolidated financial reports and manipulating data to reveal details of costs and performance at the regional or team level.

You have an ERP or bespoke solution that’s past its prime: You implemented a solution many years ago but your ERP hasn’t stayed current or hasn’t been well supported. Without the functionality you need now, your team is wasting time on convoluted workarounds (rather than benefiting from features that reduce duplication, save time and enhance productivity).

BONUS READ – 5 ERP replacement signals every growing business should look out for]

In the first scenario, you might wonder if moving from an accounting platform to ERP software is overkill or not a good fit for your industry or business type. In the second, you might be disillusioned with the idea of one platform that can ‘do everything’.

But in both cases, taking action to implement a robust, full-featured ERP solution in 2019 is a wise move. Here’s why:

2019 ERPs are a dramatic improvement

The breadth and depth of what an ERP solution can do has evolved significantly since the early days. In the 70s and 80s, the software was more limited to technical materials requirements/resources planning (MRP) functionality to support manufacturing and the associated management of shop floor, distribution and accounting tasks.

Infographic – A brief history of Enterprise Resource Planning Software

Today, leading ERP solutions provide a truly comprehensive way to manage whole-of-business workflows and data for every kind of business—often within a Software as a Service (SaaS) model that makes IT management more reliable and cost-effective.

Leading ERPs keep you up-to-speed with technology

Vendors like SAP, Sage and MYOB are examples of companies pioneering the digital economy by developing market-ready solutions that make the most of technologies such as cloud computing, data analytics, automation, IoT, machine learning, and more.

ERPs you can implement in 2019 touch on every aspect of your business including:

Financials
Sales
Purchasing
Production
Inventory
Logistics
Customer Relationship Management (CRM)
Warranty and returns
Business Intelligence and more.

Your data is readily available in the cloud, consistent across every office or warehouse you operate, and upgrades can be applied easily (and often automatically).

You can facilitate a remote workforce or do business via your smartphone while ensuring all employees are working with the same data regardless of where you operate across Australia or around the globe.

Tailored yet flexible: modern ERPs grow with you

One of the most compelling reasons to choose an ERP solution over software that is purely ‘web-based’, is the granular level of customisation that’s possible. Reputable ERP solutions have experienced reseller partners worldwide that work with you to tailor your ERP to match the specific structure, workflows and reporting needs within your enterprise.

ERP Software modules and functionalities to look for in 2019

Which ERP Software modules are key to your business? Tailor your ERP to match the specific structure, workflows and reporting needs within your enterprise.

Yet customisation isn’t constraining in the modern ERP solution. In 2019, world-leading ERP vendors offer more flexibility than ever before: you can pick and choose from modules that reflect what you need right now and add new functionality as you grow—whether it’s additional modules from the same vendor, affiliated third-party providers, or via seamless integrations.

You might start out with a focus on financial management to support the CFOs growing responsibilities for corporate performance, but then it’s easy to build-out your ERP’s functionality in following years—say, to include an HR management component—as your team expands.

As your business grows or business conditions change, modern ERP solutions can adapt.

Avoid these pitfalls when choosing an ERP in 2019

We’ve established that implementing a new ERP in 2019 is smart if you need greater visibility, insights and automated workflows within your organisation.

Following the steps outlined further within this post will help CEOs and CFOs gain greater clarity around the factors to consider in selecting the right ERP and what to expect at each stage of the process.

But first, it pays to quickly cover where many people go wrong, so you can avoid common pitfalls.

What leads to choosing the wrong ERP software solution?

Factors that contribute to choosing the wrong ERP software in 2019

Factors that contribute to choosing the wrong ERP software – here is what to look out for

Delaying implementation despite an obvious lack of speed, capability and reporting finesse within your business (and growing internal frustration among your employees).
Failing to effectively consult internally in order to comprehensively define your technical requirements for each department and team.
Not weighing up the pros and cons of cloud versus on-premise early in the process.
Thinking in terms of costs alone, rather than how to best enable business process improvement and growth.
Not defining a budget in order to narrow your search parameters and establish clear expectations internally and with your third-party provider.

[FEATURE ARTICLE – Five mistakes that lead to choosing the wrong ERP]

Choosing the right ERP in 2019 in eight steps

Here are the essential steps to follow to make a well-considered choice as you explore your ERP options in 2019.

1 – Define what success looks like for your business:

Start by imagining your future state.

How will you know if you’ve chosen the right ERP and had a successful implementation in 12 months from now?

Asking this question is designed to help you elucidate the operational improvements you expect and need your ERP to facilitate, for example:

faster reporting timeframes;
a reduced debtor days ratio;
or less machinery downtime on your production line.

In this early stage, it’s also important to reflect on the processes and structures within your business that must be mirrored in the ERP solution you set-up. It can be helpful to examine your current systems (digital or otherwise) and generate a list of the advantages and drawbacks for each—to help you identify gaps, and the functionality you want to retain.

2 – Explore your technology ‘must-haves’:

Always start with the business process improvements you need to address, but once those are clear in your mind—it’s time to consider the technological factors that will make your business run better. For example:

Do you need the scalability of cloud-first software? In comparison to an on-premise system, software hosted in the cloud is delivered via a subscription-based licensing model which means no large, upfront capital expenditure. There’s also no need for expensive, onsite IT infrastructure and ongoing support to maintain security.
Is mobility essential? Interfaces that can be easily accessed via mobile devices support a productive workforce now and into the future, with the rise of remote work and telecommuting. Also, handheld technologies are increasingly being used to support workers in the field, on the shop floor or in a warehouse to do their jobs better—which should connect to your ERP.
What kind of database do you need? Is big data management a current or potential future concern for your business or industry? What level of security, support and scalability do you need in relation to the database underpinning your ERP?
Are there tools you’ll be using that must be integrated? Identify any essential programs that you will continue to use that should be integrated with your ERP software, e.g., MS Office.
Will you be adopting IoT, AI, AR, VR etc. within your products or systems? When you consider the emerging technologies that may become commonplace in your industry, your choice of ERP is affected. An enterprise connected by a powerful ERP solution with automation and machine learning capabilities that can leverage data from multiple sources.
Is e-commerce and geolocation marketing important? Is being able to trade online seamlessly or implement location-based marketing tools like beacons vital for your future growth? Your ERP should allow for e-commerce, customer relationship management, and EDI integration.

[FEATURE ARTICLE – Cloud ERP or On-premise? Answering the million dollar question]

3 – Prioritise specific functionality:

Modern ERPs have the potential to provide your business with a mind-bogglingly vast array of features and functions. Before you delve too deeply into researching software products, prioritise the functionality that matters most. For instance, if you’re a wholesale distributor, you might focus attention on finance, inventory and purchasing functionality. If you’re a food processor, manufacturing functionality is key, but you might specifically be keen to improve your ability to manage traceability. Some tips for prioritising functionality:

Refer back to the notes you created in step one—was there functionality from the systems you currently use every day that must carry over into a new solution? What were the gaps?
Ask a ‘functional head’ from each department to review and document requirements based on their day-to-day activities.
Use your business structure and planning documents to help determine features you need: for example if you operate in multiple countries or have multiple ABNs, you need functionality to support cross-entity consolidation.
Don’t focus on features that you only might need. If you don’t currently have complex manufacturing management needs, don’t prioritise that functionality. You can grow into your ERP solution and add new functionality as needed.
Refine your notes into a high-level checklist (1-2 pages) that you can use to drill down into the detail as you know more about what’s possible within different software.

[FEATURE ARTICLE – Define your ERP implementation and functionality checklist]

4 – Clarify your budget:

How much should you spend on ERP software in 2019? What’s the typical investment required for a company of your size? The answer will vary depending on your businesses requirements, number of users, customisations, integrations and your implementation needs. However, ERP investments tend to range from between $20,000 to more than $1 million for a larger corporation with more than 1000 employees.

ERP Budget guide

[INFOGRAPHIC – ERP Budgeting: How much should I spend on ERP implementation?]

5 – Research possible ERP software:

In this day and age, there’s a treasure trove of free information available online to help businesses research their software options. There are excellent blogs, comparison sites, and case studies that can help you understand the ERP market and differences between products. Remember though that the information available online is general in nature, and pricing will not always be transparent. That’s because each company’s instance of ERP software licensing and implementation will be unique to them. If you have questions you can always speak to an experienced ERP consultant from Leverage Technologies—we’re genuinely interested in helping you find the best solution to function better, and we’ll be up-front if we think the ERP software we support isn’t right for your business.

6 – Obtain and interpret proposals for ERP implementation:

So, you’ve got a shortlist of products you think might be a good fit. The next step is to seek a proposal from a trustworthy ERP implementation partner, like Leverage Technologies. Because you’ve done the work to define what you want in terms of business process improvements, technology and functionality—this should help ensure you receive proposals that match your needs, which you can assess based on the investment budget you’ve allocated. Keep in mind that if you obtain multiple proposals, there can be differences in price depending on: the software and its licensing model; the providers’ understanding of functionality and customisation required; support options; implementation methodologies and process; and team size and expertise. Some providers may incorrectly scope a project or make assumptions that reveal their lack of experience, which means their proposal doesn’t accurately reflect the true time and effort required for a successful implementation.

[READ NOW – Tips for comparing different ERP investment proposals]

7 – Establish an implementation ‘dream team’:

Implementing new ERP software in a timely way, and within your budget will rest heavily on project management. Your ERP implementation partner and your internal project management team need to work in unison to ensure decisions can be made quickly, scope changes are minimised, and issues can be addressed through internal channels. It’s important to appoint an internal project manager that has the authority, respect and communication skills required to guide your implementation. Other internal muscle should be engaged during your ERP implementation to manage the configuration, training and testing required to deliver a great end result.

[LEARN MORE – Elements to include in your internal ERP software implementation project plan]

8 – Plan ahead for happy end users:

If you adopt a new ERP solution in 2019, user acceptance testing represents a key milestone in your implementation process. You can’t skip testing or do it sloppily and expect a smooth transition to your new ERP software. It’s important to consider:

When will you start and how will you phase testing in order to be ready for ‘go-live’?
What kind of test scenarios are required to understand if the system is up-to-scratch?
What different test environments are needed to replicate the product environment?
What will you measure and how will your record and present test results?
What is your change management plan to address issues that arise in testing?
Have testers been chosen, and is there a commitment to allocating the time required?

In 2019, ERP software is key to digital readiness

It has become unavoidable to use technology to support business process management in one form or another. Even if you don’t consider yourself a ‘digital business’, it’s likely you already use a wide range of software and hardware solutions.

The problem is these technologies are often applied haphazardly, creating a hodgepodge of infrastructure, data, skills and understanding across your business. That leads to increased risk, costs, confusion, information silos, and lack of visibility for senior executives.

According to a survey of more than 2,400 CEOs and risk managers, the top threat for businesses worldwide in 2019 will be business interruption. A simple example: one misplaced purchase order can lead to backlogs in your production schedule that cost you dearly.

Lack of continuity in the systems, data and supply chains you rely on to operate your business can bring things to a standstill when what you actually want is to accelerate and grow.

That’s why implementing ERP software in 2019 is worthwhile: especially for businesses experiencing rapid growth that are crying out for a more integrated, coordinated business landscape.

Start by examining your business, software and implementation needs step-by-step. Prepare to make this your year to transition to a more integrated, high-level ERP solution that will bring significant benefits to your business in both the short and long-term.

Want help to navigate the world of ERP software to ensure you reap the benefits of digital transformation in 2019? Call 1300 045 046 or email [email protected].

A beginner’s guide to choosing the wrong ERP software in 5 steps

Leave a reply

We often write about Enterprise Resource Planning solutions and what businesses should be looking for in terms of budget, functional fit and other technical aspects.

After having implemented ERP software for more than 250 businesses we can surely say that choosing an ERP software solution requires a strict process, clear team responsibilities and the expertise of a trusted third-party advisor.

But what if you are at your first attempt and want to speed up the ERP selection process? What are the risks that you should be aware of to avoid implementing the wrong solution?

In today’s article, we give an overview of what (from our experience) typically leads businesses to implement the wrong ERP software solutions.

#1 – Overlooking the “ERP readiness” signals

The first (and easiest) way to start your journey to a new ERP software solution with the wrong foot, is to delay your ERP implementation. Not implementing an ERP software when the time comes can be a costly exercise for the whole business.

In the article “6 ERP readiness signs growing businesses are likely to encounter”, we identify the main readiness signals as:

Your business has outgrown the current accounting software;
Your business is using too many manual workarounds;
The current solution is running too slow;
Your capabilities to expand a geographic expansion are limited;
You need new tools (eCommerce, EDI, AP Automation,…);
You need better reporting (“A single source of truth”).

When these six signals start showing themselves in your business, it’s time to start looking at a new ERP software solution.

#2 – Not defining your technical requirements (In details!)

ERP requirements should be defined prior to commencing any research and selection process. The requirements list should come from every department and area of the business including finance, warehouse, logistics, manufacturing and customer service to name a few.

The requirements list should define the purpose and goals of the new system and answer the question – “how does the perfect environment look for my various departments and for us as a business?”.

It is vitally important to structure the ERP selection process according to your requirements list to ensure success in the short, medium and long-term.

Businesses that don’t have a clear idea of what the new ERP system should possess are likely to encounter a number of challenges post-implementation.

Our advise is for you to take enough time to write a requirements checklist for the new system or to work with an experienced ERP provider to guide you through the process.

#3 – Not considering Cloud Vs On-Premise

Cloud ERP or On-Premise ERP? If you haven’t asked yourself this question, you probably should. ERP software solutions are rapidly shifting to a Cloud deployment model for several reasons – cost-effective implementation, fully managed and maintained, low OPEX, enterprise-grade security, and more. On the other side, an On-Premise ERP setup means that you have to implement and maintain the technology environment to host the software.

There is no right or wrong answer when choosing between the two. However, you should be aware of the advantages and disadvantages that these solutions present. Ultimately, you should look beyond the 5-year ROI to truly understand the benefits that one setup will give you over another.

#4 – Overlooking to capabilities of a modern ERP

Think about your new ERP software as an enabler, rather than a cost centre. New technologies available to businesses of all industries and sizes mean that you can unlock further efficiencies for your business.

Large high-tech companies are already pioneering disruptive technologies, so you don’t have to. Big Data, Artificial Intelligence, IoT, Customer Experience Platforms to name a few. When choosing a new ERP software, keep in mind these new technologies.

#5 – Not defining your budgetary requirements

How much should you spend on your ERP implementation? Have a rough idea of the budget available to the implementation of a new ERP for your business. This will help you narrow down your research and avoid wasting time researching the wrong solutions.

The budget is a critical part of any ERP implementation; it should be discussed internally and with your third-party provider upfront in order to set the right expectations.

Conclusion

At Leverage Technologies, we have implemented ERP software for more than 250 Australian businesses since 2005.

Over the years, we have developed a deep understanding of how different ERP solutions serve the needs of various businesses, from any industries and size.

For more information or to start your journey to a new ERP software solution, call us on 1300 045 046 for a no-obligation consultation or email [email protected].

Template ERP Requirements: Defining Your Implementation Checklist

Leave a reply

Your ERP requirements have to be clearly defined prior to commencing the research and evaluation of your various ERP options.

If you have been tasked with gathering information about possible ERP options for your company and you are about to begin the research phase, follow the instructions below.

You can use this sample ERP requirements checklist to get an idea of what businesses like yours look for and what the ERP research process looks like.

Defining your ERP requirements starts with understanding the vendor selection process

If you are evaluating ERP (Enterprise Resource Planning) solutions you will no doubt be bewildered by the number of choices available in the ERP market. Questions about Cloud vs On-premise, Tier 1, 2 and 3 products, web, E-commerce, EDI, paperless warehouse, choices of the database and a whole lot of other questions will need to be answered.

When evaluating ERP solutions, it is important that you have a process in place for vendor selection.

This process should include a structure that has an emphasis on running a complete evaluation including:

Online investigation of potential solution providers;
High-level requirements analysis;
Demonstration of capability;
The high-level scope of works;
Assessment of implementation methodology;
Interviews with implementation team members;

More information about the appropriate ERP selection process is available here.

Let’s assume you are running the suggested ERP selection process. This is a somewhat formal structure to ensure downstream implementation success. However, you will still require a level of detail associated with defining the functional and technical ERP requirements.

Here are some ideas to get your thinking started with the ERP requirements definition process for your business.

Defining your business’ ERP requirements: sample checklist

We need to start our ERP selection process by looking internally within the business to answer questions about what functionality our business requires from the ERP system.

This starts at a high level and then drills down into each functional area of requirement:

What do we want to achieve by implementing a new ERP solution? It’s always worthwhile to ask the question – what does success look like for our business? In 6 or 12 months’ time, when we have successfully implemented a new ERP solution, how will our business look like?

Improved cash flow. Debtors days reduced from 75 days to 50 days for example;
Automation of tasks. List examples of tasks that you want to automate and how much time will be saved through automation;
Improved customer service. List how you plan to improve customer service through the implementation of an ERP solution. Examples might include giving your sales teams mobility devices and access to CRM for access to customer information before account management visits or the ability for a sales person to instantly access information associated with customer orders, delivery dates and stock availability for customers.
Automated reporting for quicker reporting timeframes. Month-end accounts to be finalised and published within 6 days of month-end. Timely information for better decision making.

When considering a new ERP solution, you will want to prepare your ERP requirements list. The below items (whilst not comprehensive) represent the sort of functionality you might be looking for.

Technical requirements

Consider Cloud vs On-premise, mobility and other technical requirements. A sample list of technical questions includes:

Cloud vs on-premise
Choice of database
Client computing requirements
Integration to MS Office
Server requirements (if you choose an on-premise solution)
Operating system
Development platform
E-commerce integration
Mobility options
Software development kit details
Updates and upgrade process and frequency
Bandwidth requirements
Third party integrated Solutions / complementary Solutions list
Client access with specific reference to remote access requirements – web client vs Remote Desktop
MS outlook integration

Finance requirements

Your ERP questions as they relate to the financial modules should focus on financial reporting, ATO compliance, management reporting, timely processing of information and automation of tasks:

Financial reporting with drill down to source transaction
Cash flow analysis and cash flow forecast reporting
Flexible chart of accounts
Dimensions and cost Centre accounting
Budgets – including the ability to load multiple budgets
Multi-company and consolidation reporting
Payroll integration
ATO reporting requirements – BAS
Fixed assets module
Cash management functionality

Distribution requirements

Focus your questions on purchasing, inventory management and logistics.

Warehouse management options
Bin location functionality
Scanning / paperless warehouse options
Purchase planning and forecasting
Serial number tracking
Batch traceability
Kitting Requirements
Stock take
Goods receipting
Freight management integration
EDI Requirements
Purchase orders with workflow and approvals
Multiple units of measure
Back to back orders
Price lists
Stock ageing reports
Stock expiry dates

For more information on how Enterprise Resource Planning is typically used in the wholesale distribution industry, check our video case study.

Manufacturing requirements

Focus on manufacturing planning and resource allocation. Consider the following sample ERP requirements for manufacturing businesses:

MRP (Material Requirements Planning)
Scheduling
Bill of materials with sub-assemblies
Works orders
Routing
WIP tracking
Shop floor data capture
Resource planning

For more information on how Enterprise Resource Planning is typically used in the manufacturing industry, check our video case study.

Customer Relationship Management (CRM) requirements

Focus on the sales and marketing process. There is a wide range of CRM and sales functionality available, from the very basic to the complex.

Sales force automation
Activities and task lists
Marketing automation
Newsletter emailing
Sales workflow
Reporting
Pipeline management
Mobility
Marketing campaign management
Service
Service management
Allocation of Support tickets
Service scheduling
Mobility capabilities
Service contracts
Timesheets
Warranty management

Reporting requirements

Reporting and analytics are key for most businesses looking to streamline their decision-making process and become proactive about their strategy. Consider reporting requirements such as:

KPIs
Dashboards
Real-time analytics
Pre-built data sources and “cubes”
Pre-built reports

Conclusion

It’s important to run a structured process of ERP selection to ensure success for your business. To do this, you need to define what success looks like for your organisation in the short, medium and long-term.

In this article, we have given some recommendations on what to consider when choosing your ERP requirements. This is a key step that businesses looking to implement a new system should take prior to beginning the selection process.

A Leverage Technologies we have been implementing helping Australian businesses choosing and implementing Enterprise Resource Planning for over a decade.

For more information or to speak to a consultant near you today, call 1300 045 046 or email [email protected].

ERP Budgeting: How Much Should I Spend on ERP Implementation?

1 Reply

How much budget should a company of your size allocate to your Enterprise Resource Planning implementation project?

Before you even start researching your options, you may want to get a high-level understanding of what ERP actually costs.

The cost of an ERP implementation depends on multiple factors such as:

Size of your business
Number of ERP users
Requirements and integrations
Deployment options
Customisations

In this infographic, we will try to give you an indicative reference price chart that you can use to scope the size of your ERP project and allocate a tentative budget based on the size of your organization (employees and turnover).

ERP implementation budget: How much should a business of your size spend on ERP implementation?

The following illustration breaks down ERP implementation cost by business size. This is based on our experience in implementing ERP systems for over 180 companies since 2005.

A more accurate estimate can be obtained by contacting our staff.

ERP budgeting explained

For simplicity, let’s consider three main category groups:

Tier 3: These are small businesses with up to 75 staff and $80 Million turnover. These organizations typically look at small office software and lower market ERP software. Prices may vary anywhere from $25k to $100k+ depending on the number of users, customisations and specific industry requirements.

Tier 2: For growing SMBs and medium-size organisations with approximately 75 to 500 staff the ERP implementation budget is around the $80k to $1M mark. Once again, the project scope and costing will vary significantly on a case by case basis depending on the requirements.

Tier 1: This is the larger end of town and more geared towards an enterprise software option. Business with 501+ staff and $250M+ turnover typically fall into this category.

Conclusion

If you want to get an idea of how much an ERP implementation will cost to your business you need to consider the number of users, Cloud or On-premise deployment, customisations and maintenance costs.

In this infographic, we have provided a breakdown of the indicative ERP implementation cost you can expect according to your business size in terms of the number of users and annual turnover. This may vary significantly depending on your specific requirements and circumstances.

Leverage Technologies have implemented ERP systems for more than 250 businesses since 2005. For more information or if you would like to get an exact estimate contact 1300 045 046 or email [email protected].

The Secret Cost of Not Implementing an ERP System Revealed

Leave a reply

While the cost of implementing an ERP solution can be scoped out, it’s the cost of NOT implementing an ERP that you should be worrying about.

What do we mean by that?

Using your outdated ERP software, basic accounting package or running your business on spreadsheets can be a dangerous business. In this post, we are going to review the key reasons why the cost of not implementing an ERP system should be top of mind for your organisation.

Why the cost of not implementing an ERP solution should be part of your ERP ROI equation

Companies often ask, “what will my Return on Investment be when implementing an ERP solution?”

There are multiple different methods for calculating ROI including:

Increased cash flow
Staff retention
Better customer satisfaction

An often overlooked calculation and discussion is ‘what is the cost of doing nothing?’ When companies go to the market to find and implement a new ERP solution they do so for a number of reasons:

Islands of information – multiple solutions that are not integrated. This creates risk associated with separate silos of data and information. It becomes difficult to get a consolidated view of operations.
Reporting – manual or limited reporting options in legacy systems is often cited as a reason for considering a new ERP solution
Support – companies using an older ERP application have concerns associated with business continuity and support
Company growth – high growth companies outgrow their existing ERP solutions and go to the market to implement an ERP solution to cater for and assist with rapid growth.
New technology – wanting to make the most of technological advancements (mobility, cloud and big data analytics are a few examples).

Other key reasons for implementing an ERP system include things like functionality requirements, legacy systems and more.

From our experience in assisting Australian organisations chose and implement ERP solutions, we found out that:

When first entering the market for an ERP solution companies underestimate the budgetary requirements and the work required to implement ERP. This leads to organisations deciding to “do nothing”.
When companies make no decision (do nothing), they regret the decision and re-enter the market for ERP soon after making an initial decision to do nothing.

The question to be answered is “when it comes to ERP – what is the cost of doing nothing?”

The answer to this question will depend on your company’s current systems, growth patterns, geographies and plans. Consider the following scenarios:

1 – Considering ERP because of high growth and the fact that your business has outgrown your current solutions

Companies in this scenario often delay implementing an ERP solution because they are so busy growing their business that they can’t take the time to implement a new solution. This is a false economy.

As your business continues to grow your requirements for better reporting, faster decision making and a more holistic view of operations will increase exponentially. The longer you leave it, the worse the situation will become. The best-run organisations I have seen implement ERP ahead of the curve – before the business grows to a point where the business is desperate and crying out for better systems.

2 – Wanting better support for your ERP solution

Poor or limited options for your ERP support will put your business at risk. There are two elements to this – day-to-day business continuity and missing out on the advantages of a well-supported, modern solution. Business continuity is easy to quantify – not having a good support process and structure in place is like not having an insurance policy for your business.

You might not need the ERP support for many months or even years but, when something goes wrong you could put your entire business at risk. Remember that your ERP solution controls your debtors, customer relationships, suppliers, staff and more – ERP runs your entire business. Even if you do not have a major system failure that requires urgent support think of the day-to-day costs to your business of not having an ERP partner that you can trust to help streamline your operations. A good ERP support partner will be able to offer new technology enhancements, streamlining operations and financials and helping save time and money through the use of technology.

3 – Moving away from islands of information

As businesses grow so to do the number of systems that they use internally. Think of the core accounting system and multiple third-party solutions for CRM, manufacturing, estimating, reporting and more. As your business grows so to do the requirements for information to make faster, better decisions. Growing product ranges, new geographies and additional staff add to these complexities. The more your business grows the more you will want a single source of truth – one single ERP solution that consolidates information across all business units.

4 – You require better reporting for decision making

Modern ERP solutions offer integrated reporting platforms. Integrated KPI, dashboard and analytics to analyse large data volumes is only part of the picture. Modern reporting and analytics including in-memory technology allows two very important advantages –

Sorting through large data volumes to deliver instant reporting
Automated reporting – pre-written data analytics to allow users to write their own reports without the need for advanced technical knowledge or experience.

Delay implementing a modern ERP solution and you will almost certainly not have access to modern reporting platforms for instant decision making.

5 – Technology changes – take advantage of IT

Technology is advancing at a rapid pace – faster than ever before. Modern ERP solutions take advantage of these advances. Think of recent ERP developments including:

Cloud
Big data analytics
Mobility
In-memory technology

If you want to take advantage of these and other developments in technology you will need to act and implement a modern ERP solution.

6 – Missed opportunities

Modern businesses are changing the way they do business – at an ever-increasing rate of change. Marketing, sales, reporting, logistics and manufacturing are all evolving as technology advances. If you don’t implement modern platforms for the change you risk missing out on new opportunities. After all, you don’t implement an ERP solution purely for the new technology. You implement new systems for the advantages that the solution can deliver. Once again, think about:

Improved cash flow
Better customer service
Staff retention

Conclusion

While the cost of implementing an ERP solution can be scoped out, it’s the cost of NOT implementing an ERP that you should be worrying about. The reason is simple.

For growing businesses, using basic management technology may result in performance issues with clear repercussions on operations and cash flow. in addition, poor or limited support options for your outdated technology can really put your business at risk.

Consolidating your dispersed technology systems into one ERP platform can also help your business overcome information asymmetry and reporting/forecasting challenges, giving you the tools you need to gain a 360-degree view of your operations.

To find out more about how we can help your organisation leverage Enterprise Resource Planning call 1300 045 046 or email [email protected].

ERP Software Implementations – making the implementation plan work from start to finish

1 Reply

When implementing ERP software we all know the importance of the ERP project plan – let’s take a more detailed look at what should be included in your ERP software project plan.

This article has been specifically written for small to medium-sized businesses looking to implement ERP software.

Template ERP Software Implementation Plan

It pays to have an individual serving as the internal / company Project Manager for the ERP software implementation.

Project managers have many responsibilities during an ERP Software implementation and one of the most important is the design and updating of the ERP project plan. The most commonly used tools for ERP project planning (for small to medium-sized companies) is MS Project or MS Excel.

An ERP Software project plan: (Click to enlarge sample)

This ERP Software implementation plan might serve as the basic guide for the project managers, ERP implementation consultants and you – the customer. Note the elements of the project plan –

– Planned start date of activity,

– A description of each activity,

– The hours allocated to each activity,

– The status (started, in progress etc.),

– The customer time allocated to each activity,

– The role of the customer in each activity,

– Who has responsibility for each activity and a general comments section.

It is important that the project plan is updated on a regular basis and those roles and responsibilities are clearly defined. It is important that completed tasks are tested and verified. It is no use ticking an item off the project plan as completed to find out later during the project that the item has not been completed to specification or to the desired outcome. This is one of the major tasks of a project manager – verify that the items marked as completed are actually ready for go live.

Conclusion

There are a number of different roles and responsibilities during an ERP Software implementation. The ERP Software implementation plan should highlight these responsibilities and “required by dates”. Let’s not forget that as the customer you have a number of key responsibilities during implementation.

Make use of a good, updated project plan to manage your ERP implementation and to ensure that all parties are aware of their roles and responsibilities.

Need help planning and implementing your ERP? Call 1300 045 046 or email [email protected] to speak to one of our consultants in Sydney, Melbourne or Brisbane.

4 Tips to Avoid ERP Budget Overrun Nightmares

Leave a reply

If you are considering implementing an ERP solution you might be asking yourself which are the major implementation risk areas that might lead to ERP budget overrun?

After all, you will have a budget and you will want to stick to it!

The board of directors approves a budget for software / cloud, implementation and on-going support. As the project manager or project sponsor you do not want to ask for more budget to complete the ERP project. At the same time you can’t risk to incur in a dramatic ERP implementation failure.

Imagine the scenario – the project scope has not changed but you need an extra 20% of the original budget allocation to complete the job – not a great scenario!

Here is how to avoid it…

Keep an eye out for this 4 high-risk ERP budget overrun areas

There are multiple elements to managing an ERP implementation and the associated implementation budget.

It all starts with having a realistic budget, good internal processes, a solid implementation methodology and the right resources (internal and ERP implementation partner).

Assuming you get all of these elements right, what can go wrong?

Let’s consider the four areas that typically have the highest risk of ERP budget overrun.

Data Conversion

Very often the most under-quoted part of an ERP implementation.

The challenge with data conversion is two fold – the amount of time that your ERP implementation partner has to spend on data import and reconciliation and the amount of time that your internal resource has to spend on data preparation, testing and data “confirmation”.

It’s never as easy as clicking the button and your data appears in the new ERP system.

Items that influence the ERP budget include

The number of different data sources
Current data formats
How “clean” is existing data
The amount of data to be converted
How well your internal team understand the data formats
What, if any, historical data is being converted.

The process should look something like this:

Decide on the data to be converted (master data, transactional and historical)
Use data templates to upload data into the new system
Export data in text format from existing systems
Perform test uploads
Do user acceptance testing, check the results, reconcile.

How to avoid ERP Budget overrun due to poor data conversion management

Depending on the outcomes of the test uploads you might perform additional testing before your final go live data conversion. If your business uses inventory then a stock take at go live is recommended.

To keep control of the data conversion budget make sure that you spend some time planning the conversion requirements during the scoping process. Allocate sufficient resource to testing.

Reporting

Yes, most modern ERP solutions offer standard reports and the ability to write your own reports but, you can’t underestimate the importance of specifying your reporting requirements and containing the scope and budget associated with report writing.

It is a great shame that so many ERP implementations fall short when it comes to true value add reporting, dashboards and KPIs.

The reason very often is either:

A lack of budget allocation to reporting
Assuming that the standard reports will suffice or
Not specifying your reporting requirements.

Avoiding ERP budget overrun

In summary, when it comes to reporting make sure that you specify your requirements, define the scope, allocate budget and “ring fence” the spending.

Most importantly do not assume that reports will be standard out the box and don’t assume that you can write your own reports.

I will add that most modern ERP solutions are now incorporating better, easier to use report writing tools that have pre-written data flows to allow users to create their own report selections and configurations. This is making life somewhat easier for reporting.

Integrations

Looking to integrate your ERP solution with a third party application?

E-commerce
billing engine
In-house solutions

Integration work can overrun substantially if not correctly scoped and managed.

Avoiding ERP Budget overrun

A well defined scope, careful project management and realistic budget and timing expectations will help.

Work closely with your ERP implementation partner upfront to scope in details all the integrations with third party platforms your new ERP system will have.

Development

Very similar to integration requirements, development work can be a source of major frustration for implementation teams and Project Managers.

Think of the steps involved to complete a development inside the ERP application:

Functional scope
Blueprint
Technical scope
Development
User acceptance testing
User training
Deployment
Go live
Go live assistance
Handover to support.

Development projects should be managed as their own “mini projects” within the broader project framework.

The challenge with regards to development and project overruns is that many development projects are a blank canvas – tell me what you want me to build and I will build it for you. As a result, there is a substantial reliance on getting the scope of works correct.

If not contained within a scope the development team will continue building and developing with no end in sight.

Avoiding ERP Budget overrun

The key to budget containment within a development framework is:

Careful scope (both functional and technical)
Comprehensive project management
Clear communication between client, functional consultants and development team
Realistic budget and timelines.

Conclusion

Technology is improving.

Cloud, mobility, analytics and other technological advancements dictate that customers want more value for money.

Careful management of an ERP project can deliver on time, real value to your business. Plan, co-ordinate and structure your project to manage all aspects of the implementation with specific attention on the data conversion, integration, development and reporting to guarantee an “on budget and on time” implementation.

Have we missed something?

Let us know in the comments below! What are other areas of your ERP implementation project you are particularly considered about to avoid budget overruns?