When is the right time to consider an ERP system?
I often come across this question when talking with CEO’s, CFO’s and CIO’s. It’s not one that is easily answered without taking a closer look at their business.
I’ve shared some of the most common ‘triggers’ or ‘considerations’ that I often find leading to the discussion:
Probably the cause of some of your biggest headaches. Generally, if you are using disparate systems (with little to no integration) it’s safe to assume that there’s reduced transparency between departments and group companies. Not forgetting manual reporting and consolidation efforts and potential errors.
You have staff entering data twice, maybe more, and your IT team is managing multiple sets of Master Data and systems – costing your business time and money.
You don’t change a winning team, right? Well the same does not apply to your legacy system. They are outdated for several reasons.
· They don’t allow your business to fully embrace the benefits of mobility in a digital age – your (potentially millennial) staff aren’t given the freedom to be productive while you keep them stuck to a desk.
· Workflows are cumbersome or non-existent, instead of being fluid and automated
· Personally, the most important consideration is scalability – legacy systems tend to be rigid and the costs involved to support or upgrade, believe it or not, tend to be higher than newer platforms.
Complexity is subjective and can be driven by a number of points, personally, I start with ‘the Multi’s’ –
· Does your organisation have multiple companies and sites? Do these sites transact with one another?
· Does your organisation operate across multiple legislations or do you have plans to expand into new territories?
· Does your organisation transact, operate or report in multiple currencies?
· Do your system users speak multiple languages?
The complexity of these scenarios requires a good ERP system to be able to efficiently manage these processes. I suppose you could increase your headcount instead and hope for the best that they don’t make any mistakes through all the duplication of effort and manual interventions – or you could adopt a system that can help you simplify your operations and cater for your growing business.
My view is that Users should be able to spend time analysing data instead of capturing data, they should get better insights out of their system and above all automation must replace duplicate efforts.
Industry specific challenges
All businesses are faced with their own unique challenges, however it’s safe to say that some of these challenges are common across businesses within a specific industry. To be able to leverage off a system that has considered these common challenges and to provide you with industry best practice can put you ahead of the competition.
In my discussions some of the common challenges across some key industries include:
Distribution Challenges / Drivers
· Making sure there’s full visibility across the global supply chain
· Empowering a mobile sales force
· Optimising purchase decisions and margins
· Managing supplier quality and performance
Process Manufacturing Challenges / Drivers
· Being able to respond faster to changing customer demands and fluctuations in purchasing and production.
· Minimising waste
· Reducing the risk of recall by ensuring consistent quality and safety of products
Discrete Manufacturing Challenges / Drivers
· Increasing customer satisfaction (products must meet customer standards, expectations and cost)
· Manage customer care & product warranty and services
· Managing production costs and overheads
Business Services Challenges / Drivers
· Tracking time and expenses on projects & contracts and resources
· Simplify project & contract management and optimise on profitability.
In conclusion, there are many triggers that tell you it’s time to start looking for an ERP system. It’s important to remember that ultimately the system exists to make your company more efficient and to allow it to allocate resources elsewhere while many of the daily tasks are automated and simplified.