When and why to implement an ERP system
In my last post, I talked about what enterprise resource planning software is – and how it can help businesses operate more efficiently. But now you may be wondering whether your small or midsized company is ready to make the move. Although individual cases vary, many companies adopt an ERP system because they’ve experienced growing pains. Let’s look at some common symptoms that manifest – and how an ERP system can help clear them up.
Here are the top 5 signs, that you are ready for ERP:
- Time spent on daily activities is up
You find it’s taking longer to manage key activities across your organization. Perhaps your finance department is struggling to close the books on time or IT is overloaded with updating and maintaining patchwork legacy systems.
If inefficiency rules your daily business operations even though you are adequately staffed for business volume, check to see how many disconnected software applications are being used across the company. ERP software integrates solutions and data into one system with a common interface, making it easier for business units to communicate and do their jobs effectively.
- Unanswered business questions
Can you easily answer important questions about your business, both big picture and granular? For example, how much revenue certain product lines bring in or the number of returns you receive? If you’re in the dark, information silos from segregated systems and a lack of easy access to metrics and KPIs could be to blame – all ailments that enterprise resource planning software has been designed to address.
- Runaway business processes
Are there areas where your processes are getting away from you? Maybe it’s harder to manage inventory, satisfy customers, or keep costs in check. If so, your business processes may need to be restructured to accommodate growth or changing business priorities – a natural fit for ERP software.
- Manual processes involving multiple data sets
If most departments are using their own applications and processes to get things done, chances are you spending too much time inputting duplicate data entries into separate systems. Reporting takes longer, and the chance of errors is magnified. And when information can’t easily flow between them, connections can be lost.
- Inability to seize opportunities quickly
Does a new opportunity excite you, or are you already scared by the thinking about implementing the changes required to follow through on it?
If you’re experiencing some of the above pain points, you’re probably spending so much time running your business that you can’t easily identify emerging business opportunities – let alone pounce on them. Many ERP systems include advanced analytics capabilities that help you spot new sales channels and revenue streams. And they give you the technologies such as in-memory computing and mobile to help you capitalize on them very quickly.
Specific ERP Use Cases
Beyond helping you to resolve the issues described above, enterprise resource planning software offers clear benefits in the following scenarios.
Support rapid growth
When your business is thriving, an ERP system can help you manage a growing pool of people and processes to keep up with demand. It can help simplify and standardize processes across departments, business units, and even new geographic locations. And scalable enterprise resource planning software ensures your needs will continue to be met over time.
Adopt industry-specific functionality
There are many ERP systems that offer industry-focused functionality, tools, best practices, and processes right out of the box. If you’re a manufacturer, you may be looking to streamline production processes and to get visibility across supply, production, inventory, and demand. Or perhaps your organization wants to adopt more efficient procure-to-pay processes. Procurement-specific ERP supports everything from requisitioning to invoicing.
Enter new business areas
Expanding product lines or branching into new markets? If so, you probably need a new process and creating one requires a lot of hands-on input. Questions may arise that you don’t have the time or means to dig into. How much are you paying for new commodities, for example?
An ERP system provides the structure and workflows for efficient best-practice processes – ranging from procuring raw materials through to customer returns. It frees up time and also provides the metrics you need to make profitable adjustments.
Reinvigorate a flagging business
If your business is struggling to make ends meet, ERP software can help you home in on areas where you can improve and streamline. It can help you run smarter and leaner operations, restore order – and seize new profitable opportunities. And with an abundance of cloud ERP solutions to choose from, you can get the capabilities you need relatively quickly.
If you know your business can be improved with enterprise resource planning software, but are still unsure whether the time is right, you could be facing a common issue – fear of the implementation process. Smaller companies are understandably nervous about lengthy “large-enterprise-sized” implementations that cost more than their budgets allow. But now, cloud-based enterprise resource planning software can be deployed quickly and with a low up-front investment. And on-premise ERP deployments are significantly faster and more affordable thanks to pre-configuration and industry best practices. Here are some SAP customers who faced their fears, took the plunge, and haven’t looked back.
Case study: Filling a need for real-time analysis and reporting
Simplot is a market-leading distributor of frozen grains and produce. Their overseas subsidiary, Simplot Korea, was looking for software that would give them real-time insight into finance, logistics, and sales information. They also wanted to optimize key business processes and improve collaboration with their partners. The subsidiary found what they needed with our in-memory ERP suite for SMBs. After a four-month deployment, Simplot Korea can capture and analyze huge volumes of business data in a single, scalable solution – and feed local market performance and consumer preferences back to corporate headquarters.
Case study: Supporting data quality and integrity while lowering costs
Online recruiting company StepStone needed an ERP system that would support the strong, fast connections required to process thousands of job-related transactions each day. They also wanted to bolster data integrity, reduce administrative overhead, and achieve consistent data integration between all work divisions – for everything from approaching customers to setting up services online. The answer? A customized version of our cloud-based business management solution. With integrated analytics and faster business reporting, the company has launched a multi-channel sales strategy, improved customer satisfaction, and is supporting an unlimited number of users in three countries without impeding performance.
Case study: Simplifying protective packaging across industries
To support an aggressive, customer-centric growth strategy across a range of industries, packaging solution provider Pregis turned to in-memory ERP software and a cloud-based sales solutions. Since their 16-week implementation, the company has simplified and integrated disparate systems across departments – unifying operations, eliminating duplicate data, and ultimately, helping them deliver personalized customer service to a more diverse clientele.
If you decide to move forward and evaluate specific ERP solutions and vendors, knowing exactly why you need the software and what you hope to achieve will help you through the process. More on that in my next post.