Buying an ERP System
Buying an Enterprise Resource Planning System (ERP) that will streamline your business systems isn’t as easy as ordering from a catalogue or buying off the shelf. While the thought of investing in an upgrade from your introductory level accounting software to an ERP may make perfect sense, the process of building a system that will complement your business may take considerable time.
Investing in an ERP should be a productive and effective business strategy that will reduce duplication, improve reporting procedures and increase overall efficiencies. However, to ensure that the investment in an ERP system is a profitable and beneficial one, it is necessary to take a step back and consider a range of factors that will impact on how effective the ERP implementation will be.
While ERP systems have many common components across businesses that use them, each system has to have a level of customisation that will cater for the businesses specific needs. The new systems and processes have to be integrated with existing systems and introduced to the business in a systematic logical fashion.
Perhaps the most important thing to keep in mind is to be sure that the system you end up implementing will behave as you would like it to.
With this in mind clear strategies need to put in place in the following key areas.
Customisation of ERP system
While most ERP systems are modular in nature and have “bolt on” functionality, it really is imperative that you understand what it is that you want your ERP system to do now and in the future, so the right modules and third party apps can be applied to the system from the get go.
Most systems can be adapted to accommodate a mix of ERP modules, third party applications (including ecommerce platforms) and customised in house solutions used to solve various functionality problems.
The key is to understand what everything does and whether each piece of your proposed system will work seamlessly with other components. Having a clear picture of what functionality you want and why you want it is paramount.
Implementation of your new ERP system
ERP systems can deliver great gains in overall business effectiveness, because they have the capacity to touch every part of the business. Planning the implementation of the system becomes crucial if the new system is to deliver all of the potential benefits from day one. Poor planning and ad hoc implementation can cause problems across the entire organisation.
For the best results it may be worth engaging a professional implementation partner to manage the project who can identify your business’ specific needs, formulate an enterprise resource plan and work to deliver a seamless implementation of your new system.
An ERP system can deliver huge efficiency dividends to your business and as such should be looked upon like any other capital investment.
This is one area that being ‘penny wise’ could result in you being ‘pounds foolish’.
The idea here is to choose the system that is going to deliver the best results for your business in the medium and long term.
A mid-range ERP system will cost in the region of $30,000. You will also need to factor in ongoing running costs associated with software, licences and upgrades.
The ongoing efficiencies and savings that an ERP can deliver for your business will outweigh these initial costs.
Deployment of ERP – On Premise or Cloud based?
Cloud based accounting systems have given businesses a wider range of choice for ERP system deployment. Essentially you have the choice of deploying your system online – in the cloud – or in house or your own servers. Both methods have advantages and disadvantages.
Factors you need to take into consideration include speed, cost, security and flexibility.
Ideally, your choice will allow you to systematically and securely store and access data without breaking the bank.
Choosing an ERP Implementation Partner
Choosing to use an ERP system or to upgrade an existing one represents a significant investment in your business.
This investment should not be simply in the right system, but in an experienced implementation partner that can be relied upon to install and integrate your system with a minimum of fuss while keeping you informed and involved in the process.
ERP partners should be able to install software, deliver training and provide ongoing support and back up. Choosing a partner that takes the time to understand your business needs, existing procedure and goals for the future will help you to get the maximum benefit from installing your ERP system.
Upgrading your accounting system to an ERP system may prove to be a lengthy process, but it need not be painful provided that you embark on orderly methodical process to find the right software solution for your business.
This strategy will keep you focussed on an end result and help you to avoid making costly mistakes that may scare you away from the process.
To assist you with the process, Acacia Consulting Services have launched ERP Software Buying Guide that will guide you step by step through the process.
The guide will help you to streamline the software search and to make a sound decision that will assist you to make your business more profitable.
Article by Johannes Christmann
Business Development Manager at Acacia