1. Understand Why You Need a New ERP
The first thing we ask when we meet a client is, “What’s happening in your organization?”
Most of the time the answer is, “We’re looking at what we do and how we do it, and we have realized that our technology isn’t supporting our business.”
These are the three scenarios we usually find:
- A young organization is using Excel, QuickBooks, and a solution associated with a piece of equipment they bought. The organization has no HR software but outsources to ADP for human resources. The organization is ready for a more sophisticated, integrated solution.
- An established organization implemented an ERP system 20 years ago, and it was a great fit back then, but the business has grown. The organization has customized its software attempting to support this growth, which has led to a complex web of support processes and technology that has turned into a cocoon. Now, they cannot make upgrades to the system, and they are wanting to modernize.
- A larger organization has grown through mergers and acquisitions and now has multiple locations and multiple business units, each with their own systems or their own instances of the same system. The organization wants to be a single company with a single consistent solution.
The unifying thread for all these examples is that there is a need to follow the data from vendors to the end customer and across all functional areas. As such, the ability to make decisions informed by reliable data is the number one reason organizations consider new ERP software.
This may be true of your organization, as well.
Alternatively, you may find that the solution to your problems doesn’t involve new technology.
For example, one of our clients was in the food and beverage industry. While assessing the organization, we found out that it was pulling oft-used materials from the back of its warehouse, while storing rarely-used materials up front. Simply by swapping the location of its inventory, we were able to make the company more efficient.
2. Build an ERP Project Team
We recommend building an ERP selection team that includes stakeholders from every functional area. Include employees who can thoroughly describe their processes and how these interact with current systems.
An executive sponsor is another critical role on a project team. This person makes important project decisions and visibly demonstrates their support for the project.
While there are many other stakeholders that should be involved in ERP selection, perhaps the most important is the project manager. This typically is an internal resource with a deep understanding of your business and operations.
3. Identify Your Pain Points
Your data follows a stream of business processes. Some of these business processes are the secret sauce that keeps you competitive, while others are the weight that drags you down and kills your efficiency, profitability, and ability to grow.
Every time we assess an organization, the first thing we do is identify pain points in their current processes. Identifying pain points is the logical first step to improving business processes and finding a system that can support your future state.
Typically, we find that pain points come down to either an organizational issue, a process issue, or a technical issue. From a process standpoint, we find that it’s generally one of three situations:
- Manual processes: Having to work with multiple applications or systems, downloading information from one and manually entering it into another
- Duplicate processes: Having to handle the same information in different ways because you have multiple systems, managers, or business units with different requests
- Legacy processes: Having a culture of “we’ve always done it this way”
Before you begin ERP selection, we recommend investing in business process management – and in some cases, business process reengineering – so you can define your ideal future state and communicate your highest priority requirements to ERP vendors.
4 Process Issues To Fix Right Now
- Homegrown Spreadsheets and Databases – Just about every organization has that one below-the-radar spreadsheet or database that is being used to hold everything together. There is typically one person maintaining that spreadsheet on their local computer with no visibility beyond that. The team holds their breath and hopes that the machine doesn’t crash, or the file becomes corrupt.
- Managing Your Business With Tribal Knowledge – Many organizations have employees that are knowledge bottlenecks. These employees understand the nooks and crannies of your business, but this knowledge isn’t documented or shared with anyone. This hoarding of knowledge isn’t always intentional, but regardless of the cause, it is highly inefficient and is not scalable.
- Departments that Don’t Communicate Well With Each Other – Even the smallest companies have the tendency to create silos among different departments and workgroups. Communication breaks down, things get lost in translation, and teams become misaligned – largely due to operational and technological immaturity.
- Relying on Guesswork as Your Primary Source of Business Intelligence – When systems are outdated and business processes are broken, then useful and accurate business intelligence can be hard to find. Meanwhile, your team must make decisions regardless of whether that spreadsheet or ad hoc report is accurate.
A modern ERP system with advanced reporting functionality could be just what you need to scale your business. Relying on an integrated system, you can access reliable, real-time data and more efficiently meet customer needs.
Before you start evaluating any of the ERP vendors on our list, be sure you have clear business goals and a vision for your future state processes. This will help you select a system that supports your unique data needs.
Our ERP consultants can help you prepare for software selection and determine what your processes and technology should look like moving forward. Contact our team on the following page to request a free consultation.