Struggling to manage stock levels and satisfy customers using paper-based systems or spreadsheets? Here’s what you need to know about opting for inventory management ERP software.
Managing inventory is complicated. When your business starts to grow in size, keeping track of a large amount of stock via spreadsheets or paper-based systems is too risky and time-consuming. Inventory management software is key to operating efficiently and optimising stock turnover.
The best inventory management solution also gives you a joined-up look at your whole business. Without a clear view of how much stock you’re holding in the context of your sales, incoming supplies and cash flow—you’re vulnerable to under or over-ordering or losing sight of costs.
Companies seeking to improve inventory management are wise to consider an Enterprise Resource Planning (ERP) solution. But how do you approach the software selection process and what are the must-have features in your first inventory management ERP?
Which businesses need an inventory management ERP and why?
The way you move products from the production line to the market requires finesse given that today’s consumers are more discriminating and have a greater sense of urgency.
In particular, agility and precision in stock management matter more than ever before in the retail andwholesale distribution industries. Businesses that procure, store, sell and deliver finished goods are a cornerstone of the economy, but competition and consolidation are increasing.
For smaller companies that are growing into mid-market enterprises, streamlining and automating the flow of products to end consumers becomes critical to achieving your goals for continued expansion. That may include adding new product lines, opening extra warehouses interstate or overseas, or bringing more parts of the supply chain in-house.
Whether you sell a variety of products in different industries or have a niche, the inventory management challenges for growing retail and distribution businesses typically include:
Managing information and interactions with customers and suppliers.
Gaining clarity about your capacity to meet demand now and into the future.
Getting accurate data around the amount, location and cost of inventory.
Increasing the speed and efficiency of fulfilment processes.
You need to know what’s driving your sales pipeline, what’s happening in the warehouse, and how all of it affects your balance sheet. It’s all connected, but currently being managed separately—which is holding you back.
Rarely will spreadsheets, entry-level software, or a point solution be effective when inventory lies at the heart of your profitability. Instead, you need a comprehensive ERP solution that helps you manage inventory as part of end-to-end business process management.
What functionality do you need in your first inventory management ERP?
Keeping track of stock is a means to an end—the end being happy customers. Your new ERP solution should help you to provide an excellent experience, from the time a business or individual orders through to the delivery of their goods and after-sales care.
Your inventory management ERP should include functionality that allows you to:
Capture and use data about customers and vendors to improve sales processes, engagement, and long-term loyalty.
Plan with a clear view of your sales pipeline, shipping lead times, costs and supplier performance.
Automate re-ordering based on system-wide analysis of supply and demand.
Access real-time data on stock amounts and precise locations across multiple warehouses and within each warehouse (bin management).
Track stock by serial number, batch number, or expiration date for improved traceability.
See at a glance how much money is tied up in stock, apply different valuation methods andcosting methodologies, and analyse profitability by warehouse, product or location.
Easily see what’s ‘available to promise’ taking into account sales, forecast sales, goods storedacross multiple warehouses, on consignment, or in transit.
Analyse data to more accurately forecast minimum and maximum stock levels, and reduce wastage and dead stock.
Increase the precision and efficiency of picking and packing with pick lists, suggested routes and integration with technologies like barcode scanning and IoT.
Seamlessly manage dispatch processes, and support improved logistics or compliance with EDI requirements of large retailers.
Track and manage warranties and coordinate after-sales service.
In addition, in order to future-proof your technology investment it’s essential to choose a leading software solution that is:
Built on cutting-edge infrastructure and available in the cloud.
Intuitive to use and available on mobile devices.
Able to be implemented in stages and easily integrated with complementary technologies.
Made by an innovative, established company committed to ongoing development and support.
If you’re ready to benefit from adigital supply chain, pay close attention to how closely a solution aligns with the actual improvements you’re looking to make—both now and in the future.
Remember too that ERP solutions should be configured for your unique workflows, processes, and financial reporting requirements to deliver maximum value.
Do you want to talk to an ERP expert about improving inventory management? Feel free to call us on 1300 045 046 or email [email protected] for more info or to schedule a consultation.
Is your legacy ERP system starting to pose a barrier to functioning at your best or embracing new opportunities? This post will help you determine whether to upgrade or switch to a new software solution.
When your legacy Enterprise Resource Planning (ERP) solution is letting your business down, it’s important to weigh your options carefully before you decide whether to upgrade to a new version or make the switch to different software.
Your ERP system unifies business process management and the flow of information across every part of your business, and the wrong choice can have serious consequences.
Why legacy ERP systems create problems for evolving businesses
There are a number of reasons your organisation might be reliant on older technologies or systems that don’t take full advantage of modern approaches.
Business-critical data may be stored and managed in systems that are now outdated, but still in working order. The effort and cost of changing software may not seem worthwhile at first, especially when it may necessitate establishing new processes and the change management work that comes with that.
But the issues that may eventually arise include:
Slow, lagging processes and lack of automation reduces a team’s productivity.
Cost and risk of maintaining legacy systems running on obsolete technology.
Growing skills gap when it comes to knowledge of working with legacy systems.
How to decide between an upgrade or a completely new ERP solution
Change is only worthwhile if it delivers business value: that means better performance, lower costs, or features that will improve your offering or competitive advantage.
If you’re torn between the idea of upgrading to more recent software offered by your existing vendor or switching to a completely new ERP solution—there are two important factors to keep front of mind:
Technology is changing at lightning speed: Some of the mostadvanced ERP software solutions may be relatively mature. All that really matters is whether vendors have progressed in line with changes in the available technology: cutting-edge software must provide powerful native functionality as well as enable your business to gain a competitive advantage through advances like cloud computing, machine learning, mobility, AI, IoT, e-commerce, and EDI.
Implementing a new ERP solution is a big investment: Implementing a new ERP solution requires careful planning, a significant financial and time investment, and internal resources, training and project management skill. It’s not a decision to be taken lightly.Implementing an ERP has long-term consequences, but that also means it has the potential to boost your performance over the long-term if the solution is right for you.
Leaning towards an ERP upgrade: the pros and cons
If an upgrade is available for your legacy ERP, you may feel like this is the simplest option. Sticking with your current software provider or re-seller means you can deal with people you already know, it may require less training, or prove to be less expensive.
Upgrading your current legacy ERP is well-founded when and if:
Your team is happy with the current system even though it lacks some capability.
The upgraded version of your software is up-to-date with current technology and functionality.
The technology vendor is reliable, keeping pace with emerging trends, and investing in research and development to improve the solution.
Your current ERP was implemented well, you’ve always received great support, and you’re confident that the level of support will continue.
But if all of those statements don’t ring true, that’s a red flag.
It doesn’t make sense to hitch your wagon to a solution that your team doesn’t like and has always been a mismatch with your business needs; has historically been poorly implemented or supported; and potentially won’t allow you to take full advantage of cloud computing, analytics and emerging technologies.
If upgrading doesn’t offer a clear path to improved cash flow, customer satisfaction, and clarity for better decision-making—you should seriously be thinking about switching to a new ERP solution.
Ask yourself if an upgrade of the ERP software you already have will actually see your business through the next 10-15 years: or is it a bandaid solution?
Is a new solution the best fix for your legacy ERP issues?
Switching solutions may be the best way forward if an upgrade won’t deliver the capabilities you need to run a better business.
The speed of technological change is astounding. The Internet of Things is real and will only become more embedded within the industry and our daily life. Already in distribution supply chains,smart packaging that contains sensors that generate data is being used to enable better tracking, engagement with customers and deeper insights into supply chain efficiency.
Machine learning and AI is already part of the waymodern ERP solutions deliver automation and forecasting dashboards that alert you to trends. If you don’t move to an ERP solution that empowers you to take advantage, and your competitors do—it could seriously impact your business’ viability in a short timeframe.
Carefully assess your internal needs, gaps and inter-dependencies around the legacy system, so you can judge new software options against specific criteria. Look for a vendor that is large and innovative enough to sustain the R&D required to remain at the forefront of technology so you’re always ahead of the curve and know your product will remain current.
And finally, pay attention to the experience, industry knowledge, methodology and personal approach of any re-seller or implementation partner—you’ll work with them closely to achieve a successful implementation.
Leverage Technologies are highly experienced ERP solution providers with more than 300 successful projects to our name. Call us on 1300 045 046 for a no-obligation consultation or email [email protected].
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 butyour 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).
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:
2019ERPs are a dramatic improvement
The breadth and depth of what an ERP solution can do hasevolved 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.
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.
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 theCFOs 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 – 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.
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.
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.
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.
In this day and age, there’s a treasure trove of free information available online to help businesses research their software options. There are excellentblogs, 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 alwaysspeak 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 atrustworthy 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.
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 toappoint an internal project manager that has the authority, respect and communication skills required to guide your implementation. Otherinternal muscle should be engaged during your ERP implementation to manage the configuration, training and testing required to deliver a great end result.
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.
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].
The aim of this post is to highlight the sorts of indicators that may lead a company to consider looking at installing an ERP system. These are the “7 ERP readiness signals” to look out for.
There is a certain percentage of small companies that end up becoming larger companies with more complex operating environments. If this is the case with your organisation then it may be the case that your current accounting system may no longer be the right system to help you achieve your business objectives.
1. Data File Too Large/Large Number of Concurrent Users
Once the data file of a server-based small business accounting system becomes too large, the operation of the system can slow down considerably or even start crashing. This leads to user frustration as it takes them longer to complete routine tasks and lost productivity if the system needs to reboot. Similarly, once more and more users start accessing a small business accounting package its performance will start to slow leading to user frustration and lost productivity.
ERP systems are underpinned by a scalable database (usually SQL) and do not suffer from these limitations.
2. Large Inventory List/More Complex Inventory Handling Requirements
Once a company’s inventory list has become a certain size it will affect the running speed of small business accounting packages. In addition, companies tend to require more complex inventory handling procedures as their inventory list grows.
ERP systems are able to perform key inventory processes such as barcoding, serial number tracking, batch processing, automatic re-ordering; and cater for inventory sub-items, multiple pricing levels, multiple bins and multiple warehouses; features not available (or only available in a limited capacity) in small business accounting packages.
As companies grow they will tend to add additional software packages (such as CRM systems, Warehouse Management Systems etc) to their business to perform specific tasks. This can lead to what’s known as the “hairball” effect where there are several disparate systems requiring data to be double-entered (into one system and then also into the accounting system) and there being no acknowledged source of data truth.
ERP systems will combine many of the functions performed by disparate systems into an integrated whole-of-business system, eliminating the need to double enter data. The database underpinning the ERP system will also act as a single source of truth.
4. Reporting Done on Spreadsheets
One of the unpleasant side effects having disparate software systems is that it means that customers are quite often forced to resort to collating data on spreadsheets to report on various aspects of their business. Not only is this process time consuming but it is also prone to human error.
ERP systems have a comprehensive list of pre-built reports and also come with report writers which give customers the ability to produce custom reports so that they can report on any aspect of their business.
Small business accounting systems have been developed to cater for small businesses – which are usually single office entities. Once a business grows to take on multiple sites, collating data from these sites can be problematic for such systems.
ERP systems have been designed to cater for multiple offices and can consolidate the data from each of these offices for reporting purposes.
6. Dealing with Foreign Currencies/Overseas Suppliers
Foreign currency management tends not to be a feature of small business accounting systems necessitating the use of spreadsheets on the side for data manipulation and then double entry back into the accounting system. Similarly, importing goods from overseas mean that landed costs need to be accounted for which aren’t a standard feature of small business accounting systems.
ERP systems have in-built foreign currency and landed costs functionality.
Any sort of jobbing or project management requirement that necessitates the use of budgets; resource allocation, scheduling and tracking; sub-contracting, progress invoicing or timesheeting will not be able to be catered to by small business accounting systems.
Most ERP systems have job costing or project management modules which can cater to these requirements.
Leverage Technologies has a range of ERP solutions that cater to growing Australian businesses. For further information on any of these solutions please call us on 1300 045 046 or email [email protected] today.
Enterprise Resource Planning has evolved appreciably over the past decade or so. It’s very advanced today, and it continues to grow into a versatile, scalable, and multi-faceted resource that businesses of all sizes may leverage to catalyze performance enhancements in the value chain.
Our predictions for the top ERP trends to track going forward
After having implemented ERP software for small and medium-sized businesses for over a decade, we believe that the top innovations will come in the following areas.
#1 – The Internet of Things (IoT)
IoT is the digital connection or networking of otherwise independent devices or systems, such as cars, assembly lines, and electrical equipment. By feeding real-time data on product usage, performance, or technical problems into a centralized ERP database, IoT provides the insights required to improve quality, streamline production processes and lower costs, customize the customer experience, or manage logistics more efficiently.
IoT lends itself to various outcome-oriented service models. In consumption-based insurance, for instance, the provider uses vehicle-installed software to track mileage and monitor their customers’ driving habits. The system sends the information to the insurer’s business management solution autonomously, enabling them to calculate monthly car-insurance premiums for a customer based on usage and risk assessment.
#2 – Software-as-a-Service ERP
Many businesses are no longer finding in-house legacy ERP financially or operationally tenable. They’re progressively shifting to SaaS ERP to reduce the total cost of ownership (TCO). The approach eliminates the bulk of capital injections associated with acquiring major tech solutions for business.
SaaS enables companies to deliver a host of ERP applications to end users, such as employees and suppliers, via the cloud. It provides access to data and user interfaces or portals through any internet-connected device. With the ability to work from any location with internet access, employees can build greater adaptability and responsiveness to dynamic demands of their official positions.
The model allows companies to scale, upgrade, and switch between applications without investing in new hardware. They may introduce new software to the mix as needed, including CRM, talent management, or inventory control, and still, keep the benefits of cloud ERP integration.
#3 – Artificial Intelligence (AI) and Machine Learning (ML)
Through machine learning, ERP solutions can become smarter to the point of predicting future business opportunities and risks without human intervention or explicit programming. For example, ML algorithms may incorporate real-time data from various internal and external sources, enabling organizations to work out production costs and avoid setting loss-making prices for their products.
AI will play a critical role in enabling ERP solutions to make decisions autonomously. It’ll reduce human intervention to just passive supervision, allowing decision-makers to commit more time to value-added workflows.
To make it work, an intelligent ERP first records user input and the ensuing sequence of actions. Its built-in ML capabilities enable it to draw from historical data and to provide viable recommendations. With time, the system learns to make the right call every time without user input.
#4 – Big Data
Primarily, ERP utilizes a centralized database to support a broad spectrum of business functions. However, companies need much more than structured data to understand their markets, personnel, and customers better. Big data analytics helps these organizations decipher the sheer chunks of structured and unstructured data flowing in very fast from both internal and external sources.
For instance, in customer relationship management, big data enables marketers to extract and analyze data from sources such as social media, contact centres, and sales to enhance customer service, predict demand trends, and calculate ROI on several marketing initiatives.
ERP with Big Data capabilities can also help recruiters with talent acquisition and management. Such a system extracts invaluable job market insights from job boards, social media, and HR systems, enabling employers to meet their staffing needs.
Is your organization well-positioned to leverage ERP systems of the future? Powered by ML algorithms, AI, and IoT, the business management solutions are getting smarter and more versatile. Talk to us today about implementing best in class ERP software for your business!
In this article, we are going to review some of the common ERP myths & misconceptions that often come up during our consulting sessions. If you are going through an ERP selection/evaluation process for your business, we hope that this article will help you shed some light on what ERP is, what it’s not and what your options are.
After having implemented Enterprise Resource Planning software for more than a decade, we have come across a number of situations where the perception about these solutions is far from reality.
Enterprise Resource Planning is only for large businesses
ERP is only for manufacturing companies
ERP is too expensive
Here is our view on why Enterprise Resource Planning software is misinterpreted in these instances, backed by real-world scenarios and articles that we have written in the past.
#1 ERP is only for large organisations
The top misconception about Enterprise Resource Planning is that only large organisations have the necessity for ERP solutions.
From Finance to Inventory, Manufacturing, Reporting and more. ERP gives you a “single source of truth” that is used across all the areas of your business to consolidate disparate systems and eliminate manual processes.
From our experience, businesses that are turning over $2M+ and are still using a basic accounting package, typically start seeing the “ERP readiness signals” that lead to the implementation of a new system.
#2 ERP is only for manufacturing companies
Manufacturing businesses have without a doubt a large degree of interest in adopting Enterprise Resource Planning solutions. It is no secret that industries such as food & beverage but also discrete manufacturing see ERP has the key to success.
However, a common misconception is that unless your business has a manufacturing component to it, ERP has no reason to be adopted.
From our experience, this is certainly far from the truth as our 250+ ERP customers span across virtually every industry! From Wholesale Distribution to Professional Services, Construction, Healthcare and many more, we have seen ERP software work beautifully in a range of different situations.
To further disrupt this common ERP misconception, check the following case studies:
Budgeting for ERP software is not an easy task and requires involvement from multiple parties. The good news is that there are multiple price points to choose from according to your business size, budget availability and desired outcomes.
“ERP is expensive” – Our response to this common ERP misconception is:
There are multiple tiers of ERP software solutions to accommodate the needs of businesses of multiple sizes. If you are a growing small business, look for “entry-level”, Tier 3 ERP software solutions to start with.
ERP shouldn’t be looked at merely as an expensive exercise! In fact, ERP systems are often implemented when your actual internal systems are limiting your business. By removing the limitations of your current system, you open up to a new way of moving your business forward to better operations, enhanced capabilities and growth. For more information, read our recent article about “the cost of not implementing an ERP solution”.
Modern technologies have transformed the way you use and pay for ERP software. Long gone are the days of costly, ERP implementations. The advent of Cloud Computing technologies means that your ERP software is now delivered to your organisation “as a service” and the CapEx model is being disrupted by an OpEx alternative. The result? Learn all about Cloud-based ERP and what it means for your business in this article.
Conclusion
If you look at the common ERP myths, it is clear how most companies might be missing out on a true opportunity for growth.
If you still think that ERP is only for large organisations or enterprises, likely in the manufacturing industry, that have access to massive implementation budgets, think again!
Today’s ERP is Cloud-based, adaptable and scalable, which means that any organisation with a growth mindset can step up to a whole new way of running their business.
ERP investment proposals can vary greatly even for the same project.
If your business is considering implementing an Enterprise Resource Planning (ERP) solution you might be wondering why there is such a substantial difference in price between the ERP investment proposals provided by different companies.
Here is our advice on understanding the differences between ERP investment proposals from various solution providers so to always compare apples for apples when it comes choosing the best fit for your business.
Receiving the perfect ERP investment proposals: It all starts with your requirements
First of all, it is highly likely that you will be considering multiple different ERP solutions and possibly different providers, including resellers and implementation partners of the same solution. Analysing different solutions gives you the ability to compare what’s available on the market:
Let’s explore the key reasons why you might get very different proposals, at very different price points from alternative ERP solution providers.
#1. Are you comparing similar ERP Solutions?
ERP Solutions vary greatly in complexity and functional “footprint”. The more functional the ERP solution the longer and more expensive (consultancy) will be to implement the solution. Greater “standard” functionality is a double-edged sword – more functionality to use and more to implement.
More functionality requiring implementation will stretch out the time to deliver and will cost more in consultancy dollars to get the job done. Generally speaking, ERP solutions are available in tier one, tier two and tier three markets. Make sure that the solutions you are comparing are fit for purpose (there is a strong functional footprint that aligns closely with your requirements).
If you are not comparing similar solutions you are likely to see a substantial difference in investment required. This is particularly true of implementation pricing which varies vastly between tier one (Enterprise Solutions for large multi-national organizations), tier two (Mid-market ERP) and tier three solutions aimed at smaller businesses. We are often contacted by companies comparing five different ERP solutions, two from the mid-market (tier two) space and three from the small end of the market. This is not comparing “apples with apples”. In summary – when comparing investment summaries make sure that you are comparing ERP Solutions from the same “tier”.
#2. Implementation methodologies vary greatly
Is the ERP implementation partner offering a fixed price or a “do and charge” implementation? These two different approaches will yield quite different investment requirements. A waterfall approach assumes a fixed scope / fixed price implementation. An agile methodology is a “fits like a glove” build and consult on an “open budget” basis. Two very different approaches that will yield two very different budgets and ERP investment proposals.
#3 Assumptions are being made
When providing a proposal for the implementation of ERP solutions, your implementation partner has to make certain assumptions which will affect the ERP investment proposal.
Some examples of such assumptions include:
Availability of internal IT resources;
Current data formats and the “state” of current data from legacy systems;
Functional requirements (even after a scope of works there can be some areas that are not 100% clear).
How do the assumptions that your implementation partner makes affect your ERP investment proposal? Let’s use data conversion as an example. Data will need to be exported from legacy systems into your new ERP solution. In theory, this is straightforward:
Extract data from legacy solutions;
Put the data into Excel or Excel type templates for “checking”;
Use technical data upload routines within the ERP application to upload data and run data integrity checks;
Reconcile the data for accuracy.
Sounds easy and it can be. But, data transfers can also be complicated and affect the pricing of your ERP project. Factors which can have an effect on the consultancy time needed to upload data from legacy systems include:
Number of data sources;
Availability of internal technical expertise;
Status of legacy data (how “clean” is the data);
Are internal resources available for data checking and reconciliation?
How well has data been maintained?
How well do staff members understand the data?
Data volumes;
Data transfer requirements – for legal reasons (for example warranty or traceability requirements).
The answers to each of these questions will have a substantial impact on ERP implementation pricing. If one provider of ERP makes the wrong assumptions, they might provide a very different proposal to someone that has done their homework correctly and understands exactly what is required to convert your data.
A good ERP provider takes into account all of these factors to ensure an accurate investment proposal.
#4. Has the scope of works been correctly reviewed?
Providing an accurate implementation proposal for ERP requires an accurate assessment of scope. Two different providers might have different views on the scope of the project and can provide two very different proposals for implementation.
Conclusion
Many companies have a hard time interpreting the variance in pricing from different ERP proposals. Your ERP investment proposal can vary due to factors such as the solution being scoped, the assumptions of your implementation partners, the methodology being adopted and more.
Correctly implemented ERP solutions provide improved cash flow, increased customer satisfaction and happier team members. Evaluate potential providers and their proposals carefully to ensure that you make the right decision for your business and also make sure that your providers understand your requirements and lay the right assumptions for scoping your project.
At Leverage Technologies, we help Australian businesses find and implement the right ERP solution to grow smart. For more information or to speak to a consultant call 1300 045 046 or email [email protected].
