By Kevin Stolarski - Marketing at Answerthink
April 28, 2020
Today’s enterprise resource planning (ERP) software includes robust functionality for key areas of your business such as manufacturing, finance, supply chain, sales and marketing, as well as your product life cycle management. For many growing businesses, it’s not a matter of if they’ll need ERP software, but when. As a company grows, so does the amount of data generated and data sources to track. If you’re an organization that is looking to upgrade or replace your current ERP environment, you know this type of project is a major investment of your company’s time, money and resources. Regardless of your situation, many ERP implementations take more time and money than expected. This is because these organizations start off without a well-thought-out plan. However, a smooth ERP implementation is possible. The key is not only getting educated about the ERP solution environment, but following these five steps prior to your selection process.
1. Set up goals and business requirements
Your ERP implementation should be aligned with the right set of goals. If you don’t have an objective, you cannot successfully install an ERP system. The key to a successful ERP selection is ensuring that stakeholders across your company understand and agree with the company’s strategic goals. An unfocused approach can delay the installation and further increase the costs as well. Once you have organizational alignment, you can then consider how you might use technology to achieve business goals. Focus on specific business processes and system requirements. The more specific you can be upfront, the more detailed your vendors can be in their proposals. Few things derail project budgets and timelines as the assumptive or absent requirements. So make sure you engage with end users, the information technology department and senior management.
2. Create a budget
The planning stage is incomplete without cost analysis and estimation. The ERP implementation budget is influenced by the type of industry. As supply chain management and automation are core aspects of the manufacturing industry, you may need to customize ERP softwareaccording to specific requirements. The costing will also depend on whether you prefer an on-premise or cloud-based ERP system, the level of automation and customization, data migration, scope of scalability, and so on. It’s easy to get caught up in upfront costs, but you really should consider the total cost of ownership over the long haul. Consider long-term implementation costs related to change management. Your ERP system should be set up to mirror your future-state business processes, so as your processes evolve, your ERP system and vendor will evolve with you.
3. Establish an ERP implementation change management strategy
An ERP implementation process will typically come with extensive change. There’s a lot to think about, and you must consider the financial, procedural, technical and human issues that come up along the way. A significant change requires commitment from a team of capable and committed colleagues. Assign one member of your senior management team as the overseer and project lead. This one executive will take the input from the wider management team but will be the ultimate go-to for the rest of the change management team. It is important to assemble a team that is enthusiastic, possess exceptional communication skills, has relevant experience, and comfortable with new technology. Excellent problem-solving skills are also important. The challenge here is often that the best people for the job are very busy with other projects because of their high skill levels and commitment to the business. Ensure you delegate the responsibility to team members who can cope with the extra workload and be ready to help free them from other less critical projects where possible.
4. Evaluate ERP solutions
Building a short list of software vendors is one of the more challenging steps in software selection. It isn’t feasible to evaluate more than five products in great depth, so narrowing down the field to five or fewer is a critical step. The challenge is that there are literally hundreds of ERP software companies and only a small subset of those are right for your business. Often, this fourth step can take weeks of work. There are, however, some very straightforward questions you can use that will guide you through this step. Are you currently running your existing business software on outdated servers with old operating systems? Is your current software solutions on-premise? Are you’re considering moving to the cloud? Are you considering moving on from your existing software simply because you outgrew its functionality? Whatever the reason might be, these questions will help you understand your ERP system deployment business preference and options. And although a new ERP solution should be a business rather than a technology initiative, it’s also important to understand how a potential software solution will align with your current infrastructure. There are many online resources for finding ERP solutions, however, if you’re a small or midsize company, your needs and operations are different than those of a Fortune 500 enterprise. Answerthink is an SAP platinum partner that understands that. Our out-of-the-box SAP solutions make your implementation process seamless and affordable.
5. Schedule a discovery call
When you’re ready to talk about SAP solutions, contact Answerthink to schedule a discovery call. During the call, we’ll learn your requirements, listen to your business process, and provide information about SAP software and your options.You will also receive estimates for a realistic project budget and timeline, including options to deploy on-premises versus in the cloud, helping you to become a more educated buyer. Then we can plan a demo to show you how SAP can meet your business needs with a solid foundation for future business growth.