This article explores project governance and the role your Board and executive team can play in guiding an ERP implementation.
Running a complex, mid-sized business in this day and age is difficult without integrated, digital business systems. The question business leaders now face is not so much whether they need an Enterprise Resource Planning (ERP) solution, but which one and when will they implement it?
Savvy business leaders know digital transformation is inevitable to remain competitive in a world driven by technology. It is often Board Directors, business owners and senior executives that initiate an investment in new approaches and modern business management solutions.
But overcoming choice paralysis and committing to becoming a digital business is only the first step towards achieving gains in performance and revenue. It takes expertise, time and energy to implement and embed new systems into your organisation in ways that will be sustainable.
So, what is the role of senior leaders in the governance of ERP solution implementation projects to ensure their long-term success?
ERP solution projects are strategic and will require strategic guidance
Transforming business-wide systems, and the processes that sit behind them, has long-term implications. It requirescareful consideration and should be driven from the top, possibly guided by a strategic plan or digital business strategy.
While the work of completing tasks, liaising with implementation partners, coordinating training and internal communication is best left with theproject manager and internal champions/sponsors—without genuine and visible support from the very top, the adoption of enterprise software ismore likely to fail.
As well as backing the project management team, in many cases board directors and executives will provide formal project governance.
Taking accountability for how implementing a new ERP solution will enable the vision and go-to-market strategies of your organisation clearly fall under the remit of senior leadership.
When the Governance Institute of Australiasurveyed almost 500 governance leaders about risk in 2019, it revealed leaders were most concerned about regulatory and legislative change, reputation damage, increased competition, finding talented people, and cybercrime.
A poor ERP software implementation can cause havoc: hampering your ability to remain compliant, secure, productive and responsive to customer’s needs, which in turn reduces your competitiveness and tarnishes your brand.
What is project governance and what’s needed to do it well?
Project governance is the layer above project management. It should be limited to high-level input about performance, risk, and issues that influence the success of a project—not day-to-day milestones.
Clearly defined roles and lines of reporting are important aspects of good project governance, to ensure that decision-makers know the boundaries, understand their obligations, and get useful information but aren’t bogged down in detail.
He said, “Ideally the committee should spend 90% of their time on the project risks and issues, determining how the committee can assist the project team and provide them with clear direction.”
Why do some project governance groups lose focus and become ineffective? “A lack of focus by project steering committees is often matched by a lack of organisational focus on digital investment benefits and outcomes,” Thatcher argues.
It raises a key point. You won’t realise the full benefits of a new ERP solution unless your senior leaders know and embrace the role technology will play in enhancing your business and empowering your team.
Introducing a modern ERP solution—whether you’re stepping up from basic software orreplacing legacy systems—can improve internal processes, make data more useable, streamline workflows and reveal deeper insights. It provides a means to do these things: if your whole business adapts with those objectives in mind.
Do you need help planning for a digital transformation? Leverage Technologies is a leading ERP solutions consultancy with hundreds of successful implementations to our name.Start a conversation today.
What was the most important factor that contributed to ERP implementation success? It wasn’t the software choice. It was the support and commitment of senior leaders (62%) and effective change management within the organisation (48%).
On the flip side, poor quality testing and inadequate business process re-engineering were the top reasons cited for lack of success.
These results do not indicate that the ERP solution you use is inconsequential. Technology is a tool, andselecting the right software is critical. But it’s only half the solution and it’s not usually the limiting factor when it comes to benefitting from greater visibility, automation, and analytics.
People and processes involved in the implementation are more likely to hold you back and can be hard to coordinate effectively. People and processes ensure that your new solution is implemented, configured and adopted by your team through a process of implementation and change management.
To make that happen your business must dedicate internal resources and managerial support to the ERP implementation and change management process.
What kind of internal resources are needed to implement an ERP solution?
A reliable and experienced ERP implementation partner, like Leverage Technologies, is there to guide you through every step of your implementation.
The factors a business should focus on to support a successful ERP implementation include:
Well-documented processes and functional needs.
Accurate data and data conversion requirements for the new system.
People with the skills and availability to support each stage of the process.
Sufficient time allowed for each stage of the implementation to be finalised.
High-level sponsorship and accountability from C-level executives.
When we sit down with a business to begin the implementation process and they can show us clear process diagrams, we can tell they’ve thought about how their new ERP can be applied to deliver improvements. We can build on those ideas based on our expert understanding of the ERP solution—it’s a true partnership approach.
Of course, it’s not possible to introduce a new system that will be used and relied on by your team, without the input of your team. Your team’s involvement is required to:
Participate in workshops and brainstorms to clarify what’s important to the business.
Articulate tasks and workflows for each functional area so your provider can automate them.
Reconcile and clean-up data from multiple sources to ensure it’s ready for the new ERP solution.
Conduct other data collection activities like an accurate stock take or update the asset register prior to go-live, ensuring accurate data for the new ERP solution.
Identify and act as ‘super users’ that can be involved in training and supporting others.
Test specific functionalities by generating reports and other documents as part of user acceptance testing.
As well as people who are ready and willing to engage in each of those activities, it’s important to create a project management position or team that provides overarching direction within the business.
When and how to appoint an ERP implementation project manager
Astrong and savvy internal project manager will make a big difference in your ability to implement your new ERP solution on time and within budget. They set realistic expectations, manage project tasks, and provide an interface to the business for your ERP implementation partner.
Decide early about the allocation of resources to project management. A full or part-time resource sitting within your team to manage the project affects the costs, timing, and methodology of the implementation. Ask your reseller how the appointment of an internal project manager can expedite the implementation process and lead to better outcomes.
Because executive buy-in is so critical, it makes sense for a senior leader to champion the project, and choose and supervise a suitable project manager.
Your implementation partner can’t be privy to all the internal activities, time pressures, and machinations that may negatively influence the progress of your implementation project. Your project manager should be. They should have the skill and standing required to get answers, resolve issues, and generally keep the project on an even keel.
You might appoint a person/people specifically to run the project for a set length of time. Or you could choose existing team members to step out of—or expand—their day-to-day roles. The appointment of a full time or part time internal project manager will depend on the scale and complexity of the project and the timelines defined.
The skill set required of your internal project manager will vary somewhat based on the complexity of the project. For smaller, less complex projects, the project manager will need to be very hands-on—with the technical skill set to assist with data uploads, user training and setting up super users. With larger, more complex projects, the internal project manager will need to be more focused on the task of project, timeline and resource management – a less hands-on role.
Is your legacy ERP system starting to pose a barrier to functioning at your best or embracing new opportunities? This post will help you determine whether to upgrade or switch to a new software solution.
When your legacy Enterprise Resource Planning (ERP) solution is letting your business down, it’s important to weigh your options carefully before you decide whether to upgrade to a new version or make the switch to different software.
Your ERP system unifies business process management and the flow of information across every part of your business, and the wrong choice can have serious consequences.
Why legacy ERP systems create problems for evolving businesses
There are a number of reasons your organisation might be reliant on older technologies or systems that don’t take full advantage of modern approaches.
Business-critical data may be stored and managed in systems that are now outdated, but still in working order. The effort and cost of changing software may not seem worthwhile at first, especially when it may necessitate establishing new processes and the change management work that comes with that.
But the issues that may eventually arise include:
Slow, lagging processes and lack of automation reduces a team’s productivity.
Cost and risk of maintaining legacy systems running on obsolete technology.
Growing skills gap when it comes to knowledge of working with legacy systems.
How to decide between an upgrade or a completely new ERP solution
Change is only worthwhile if it delivers business value: that means better performance, lower costs, or features that will improve your offering or competitive advantage.
If you’re torn between the idea of upgrading to more recent software offered by your existing vendor or switching to a completely new ERP solution—there are two important factors to keep front of mind:
Technology is changing at lightning speed: Some of the mostadvanced ERP software solutions may be relatively mature. All that really matters is whether vendors have progressed in line with changes in the available technology: cutting-edge software must provide powerful native functionality as well as enable your business to gain a competitive advantage through advances like cloud computing, machine learning, mobility, AI, IoT, e-commerce, and EDI.
Implementing a new ERP solution is a big investment: Implementing a new ERP solution requires careful planning, a significant financial and time investment, and internal resources, training and project management skill. It’s not a decision to be taken lightly.Implementing an ERP has long-term consequences, but that also means it has the potential to boost your performance over the long-term if the solution is right for you.
Leaning towards an ERP upgrade: the pros and cons
If an upgrade is available for your legacy ERP, you may feel like this is the simplest option. Sticking with your current software provider or re-seller means you can deal with people you already know, it may require less training, or prove to be less expensive.
Upgrading your current legacy ERP is well-founded when and if:
Your team is happy with the current system even though it lacks some capability.
The upgraded version of your software is up-to-date with current technology and functionality.
The technology vendor is reliable, keeping pace with emerging trends, and investing in research and development to improve the solution.
Your current ERP was implemented well, you’ve always received great support, and you’re confident that the level of support will continue.
But if all of those statements don’t ring true, that’s a red flag.
It doesn’t make sense to hitch your wagon to a solution that your team doesn’t like and has always been a mismatch with your business needs; has historically been poorly implemented or supported; and potentially won’t allow you to take full advantage of cloud computing, analytics and emerging technologies.
If upgrading doesn’t offer a clear path to improved cash flow, customer satisfaction, and clarity for better decision-making—you should seriously be thinking about switching to a new ERP solution.
Ask yourself if an upgrade of the ERP software you already have will actually see your business through the next 10-15 years: or is it a bandaid solution?
Is a new solution the best fix for your legacy ERP issues?
Switching solutions may be the best way forward if an upgrade won’t deliver the capabilities you need to run a better business.
The speed of technological change is astounding. The Internet of Things is real and will only become more embedded within the industry and our daily life. Already in distribution supply chains,smart packaging that contains sensors that generate data is being used to enable better tracking, engagement with customers and deeper insights into supply chain efficiency.
Machine learning and AI is already part of the waymodern ERP solutions deliver automation and forecasting dashboards that alert you to trends. If you don’t move to an ERP solution that empowers you to take advantage, and your competitors do—it could seriously impact your business’ viability in a short timeframe.
Carefully assess your internal needs, gaps and inter-dependencies around the legacy system, so you can judge new software options against specific criteria. Look for a vendor that is large and innovative enough to sustain the R&D required to remain at the forefront of technology so you’re always ahead of the curve and know your product will remain current.
And finally, pay attention to the experience, industry knowledge, methodology and personal approach of any re-seller or implementation partner—you’ll work with them closely to achieve a successful implementation.
Leverage Technologies are highly experienced ERP solution providers with more than 300 successful projects to our name. Call us on 1300 045 046 for a no-obligation consultation or email [email protected].
If you’re not really sure what ERP means or why it matters, this post is for you.
There’s a lot of jargon, acronyms and initialisms in the business world: it’s easy to lose track. Maybe you’ve heard the term ERP used in relation to managing a business and wondered, ‘what exactly is an ERP?’.
For people new to the concept, we answer seven of the most common questions about ERP to save you time searching the web:
1. What does ERP stand for?
ERP stands for Enterprise Resource Planning.
Enterprise Resource Planning refers to a process of organising and managing all the resources and activities that help a business function, through an integrated system. You’ll almost always hear the term ERP in the same breath as ‘system’, ‘software’ or ‘solution’, because Enterprise Resource Planning is achieved through the application of software and associated technologies.
2. What is the purpose of ERP systems?
ERP systems exist to bring daily workflows, tasks and data from various business functions together into a coherent whole. The software helps to link and standardise processes and makes information available across all parts of a business, to inform related activities and allow for high-level consolidation, analysis and reporting.
In business, there’s a lot of emphasis on setting a strategy so that you can make plans with a clear end point in mind. This idea recognises that although you may have different people working on different tasks in different parts of an organisation, collectively you’re working towards a common goal.
But how do you coordinate the practical, day-to-day flow of tasks, materials, information and procedures involved, especially when your business has grown in size and scope—or operates across multiple business entities, several stages of a supply chain, numerous branches and warehouses, or multiple countries?
Traditionally, different departments or business functions create and use their own systems, and store their own information separately—whether that’s on paper, in spreadsheets, or bespoke software. But this ignores the fact that each part of a business is dependent on the others in order for an entire enterprise to operate well.
That’s especially true when complex structures or processes are involved. As your business gets bigger or more complicated, it gets harder to gain a complete picture of how each aspect of the operation contributes to overall performance, and to communicate effectively across teams.
That’s the reason that ERP solutions were created. In the very early days, ERP systems were mostly used by large manufacturers looking to coordinate and plan the required resources for each stage of production. Now they are used by businesses in all kinds of industries that want a more unified approach to managing their core business functions.
An ERP solution is sophisticated software that, when successfully implemented, should make it easier to manage workflows, collect and share information, and make insight-driven decisions.
You have a choice of how to deploy and implement your ERP system, whether that’son-premise, in the cloud, or via a hosted, private cloud. Modern ERP systems make it simple to adopt a cloud-first, SaaS subscription model where your business pays by-the-month and benefits from real-time data, true mobility, data security without the hassle of maintaining a server, and automated updates to ensure your software is always current.
ERP systems are not the kind of software where you can sign-up and start using it straight away. They need to be configured for your specific business requirements and reporting needs. While you may choose software from a particular vendor, many businesses work with a re-seller or implementation partner (like Leverage Technologies, a highly-awarded and experienced partner working with vendors including MYOB, Sage, and SAP) to guide them through the implementation and make custom modifications.
Typically ERP systems use one database to store and share information across the whole business. Most systems are modular, with a variety of different modules that cater to different business functions or activities, such as accounting and finance, inventory management, customer management, production, business intelligence, and HR. Modules are designed to work seamlessly together. Add-ons and complementary applications can be integrated where necessary.
Employees can be given access to some or all modules or specific functionality, with different permission based on their role and responsibilities.
In addition, newer ERP systems apply technologies includingAI and machine learning to automate processes and eliminate some repetitive, manual tasks, as well as analyse data to help you forecast and plan with greater precision.
The interconnected nature of an ERP means that information about a customer is available across the business as a person moves through their buyer journey: from adding them into the system as a lead, the progress of their order, through to managing returns and warranties, and reporting on aggregated sales and profits at the regional or national level. Similarly, every stage in the life cycle of creating and delivering a product can be seen, tracked and analysed to improve your purchasing, quality assurance, cost management or supply chain efficiency.
4. What’s the difference between an ERP and a CRM or Accounting software?
A Customer Relationship Management (CRM) system focuses solely on that specific aspect of your business—managing your sales funnel, customer journey and marketing efforts. An accounting program helps you balance the books, manage payroll and invoices and some reporting.
Both systems are useful in their own right, but are designed to manage isolated aspects of your business. On the other hand, an ERP system can include both of these areas of functionality (and much more) and ensure that information can be easily shared between them.
Once a customer is created within an ERP system, all of your interactions, orders, balances and dealings with that individual or organisation is linked across every part of your system. For instance, when someone in the sales team adds a customer’s details and includes attributes like their location, that information will flow through and allow your CFO to generate accurate reports by sales region that help the business analyse profitability.
Accounting and finance functionality is usually a fundamental inclusion in an ERP solution, because data from across the business is required for your business to create accurate, consolidated financial reports, and to gain clarity about overall costs, margins, and the performance of different teams, processes and product lines.
5. What are the benefits of an ERP?
High-level visibility and the ability to manage processes across your whole enterprise are the key benefits of an ERP system.
Greater visibility of what is happening allows you to identify bottlenecks, cost blowouts, and inefficiencies—plus it gives you a better vantage point to see opportunities to grow, enter new markets or develop new products and services.
An ERP system can help you answer questions like: Who are my best customers? Where am I losing money on dead stock? What product lines are most profitable?
Integrated systems and data means there’s less room for error, smoother workflows, and less effort required to aggregate information so reporting becomes faster—with instant access to a lot of key data via intuitive dashboards.
The fact is, your need for an ERP will be driven by the problems your business is currently experiencing in terms of information silos or inaccurate record-keeping, poor productivity due to manual processes, lack of coordination across your supply chain, and lack of consolidated financial reporting.
These problems can impact small to medium businesses just as badly as large businesses. Thereturn on investment when your business is firing on all cylinders can more than justify the expense of a modern ERP system (particularly given that you can pay monthly using operational budget).
The cost will vary depending on the software you choose, the functionality you want, how you deploy the software, your configuration needs, number of users, and other factors unique to your business.
Another query many people have is who uses ERP? What kinds of companies and what kinds of software? Here’s a few case studies of real businesses that use ERP systems that you might find helpful:
This financial services firm implementedMYOB Advanced which enabled them to set up a metric-based dashboard for statistical journals, for a view of performance that delivers useful Business Intelligence.
Still have more questions about why an ERP system is important, its main characteristics or functional areas? Our expert team would be happy to help: call 1300 045 046 or email [email protected].
Are templates a truly effective way to make it easier to implement an Enterprise Resource Planning (ERP) solution in your business? Let’s take a closer look.
When setting up your new Enterprise Resource Planning (ERP) solution, the promise of a pre-configured “ERP template” is that it will slash the time and cost involved in implementation.
The idea is to draw on industry standards and typical business management approaches to preset a configuration that a vendor or implementation partner can simply drop-in during your ERP installation.
A templated approach can work in the right circumstances, but there are also a number of reasons it may not work perfectly for your business.
ERP software is made more useful through configuration
Templating doesn’t work in all circumstances because many businesses do not have a standard set of requirements.
To do that your ERP solution needs to align to the workflows, procedures and reporting needs that exist within your business. It needs to cut through the information silos, duplicated effort, and manual workarounds that hamper productivity.
For some, a template might do the trick. For others, a truly customised implementation is required to mirror the specific structures and idiosyncratic approaches that make your team effective.
A template might be a good option for your business if:
You have very standard requirements for your business type or industry.
Your business structure/market is straightforward and unlikely to change dramatically.
You have the adaptability to map processes to standard functionality.
You don’t need integrations or add-ons to achieve the workflows you need.
The benefits of an ERP solution configured specifically to your needs include:
You get the right mix of functionality suited to every part of your operation.
Reporting is tailored to provide flexibility, accuracy and speed.
Complicated and unusual workflows can be reflected precisely.
Data-sharing is seamless for reliable analysis and predictive capabilities.
There’s less of a learning curve for your team to adopt the system.
No two businesses are exactly alike, why should their software be?
I’ve worked with around 20 wholesale distribution businesses, and although there is overlap in the business challenges and functionality they require—there’s no one instance of a solution that would have met all of their needs.
Your uniqueness is one aspect of your competitive advantage and you probably don’t want to lose that. Some businesses operate in non-standard ways because they supply personalised or novel products, or provide next-day delivery, or some other offering that gives them an edge.
Often, a customer will say they only need a standard P&L financial report, but once they actually see what’s included they want to tweak it. Or they want to report by projects, run budgets, or consolidate across multiple ABNs and by sales region. They want reporting suited to their needs, so it saves them time and improves accuracy.
In some cases, the uniqueness and complexity of your business is the driver behind your investment in robust, configurable software. Therefore it pays to think carefully about whether your business needs are actually standard enough to fit within a template.
To template or not: four questions to ask yourself
Here’s some pressing questions you need to answer in order to effectively weigh your options:
Do you have sufficient internal resources? Using a template to set-up your solution may necessitate more work within your business to navigate and manipulate data within your ERP software going forward. Some customers have a strong contingent of internal tech expertise and some don’t—which can make day-to-day usage of your ERP more difficult.
What will align best with your business requirements? If you’re presented with a template that ticks all your boxes, then it makes sense. But even smaller businesses can have complex structures and business management processes—in which case it could be hard to find a template to match. For instance, you may operate across multiple locations, warehouses or countries; have multiple ABNs; or span several links in a vertical supply chain such as manufacturing and distribution.
How will it affect your competitive edge? Perhaps your business systems don’t significantly underpin the value you provide in the market: so a template won’t limit you. If however, your point of difference lies in operational differences in how you bring products to market: a custom ERP implementation might better reflect those unique attributes, workflows or the capacity to create configurable products.
Do you have a period of high-growth ahead? Digital transformation is about preparing your business to capitalise on opportunities in the digital era, where technology is changing at lightning speed. Who knows what tomorrow will bring: new divisions or acquisitions, new products and services, more employees? If you launch your ERP based on standard requirements now, will it be flexible enough to support your plans for the future?
Don’t forget: you’ll live with your ERP for a long time
Modern ERP solutions are powerful and have wide-ranging and long-lasting implications for every aspect of your business. An ERP is not an app designed to do one thing, where you can sign-up and start using it.
In the situation that an ERP template that suits your needs is available, it’s important not to overlook the fact that successful implementation is still required. You should have total confidence in your implementation partner. It pays to ask them:
How often have they done this before, and was it in your industry?
How much do you save by using a template?
How much will it cost if you need changes?
What if your business grows in the future, how flexible it is?
Leverage Technologies has helped hundreds of businesses to select and implement the ideal ERP solution. Where possible we re-use insights, IP, and industry know-how to help reduce the time-to-value for a business.
But our approach is to use knowledge gained from past implementations as a starting point only: a basis for informed discussions that enable us to determine exactly what your business needs and customise the solution for your unique requirements.
Want an expert, consultative team in your corner as you embark on your unique digital transformation? Call 1300 045 046 or email [email protected].
This post helps you understand the difference between cloud, on-premise and hosted private cloud ERP implementations, including the pricing and why you might choose one over another.
New technologies have increased your options when it comes to how you’ll deliver the software you need to run an effective business. The range of choices and technical jargon can create confusion for decision-makers, especially when you’re undergoing a significant digital transformation such as implementing a new Enterprise Resource Planning (ERP) solution.
Let’s break it down, and explore the three main options.
Key differences between cloud, on-premise and hosted ERP deployments
On-premise ERP
On-premise is the traditional way that people have purchased and used software. You pay the total cost up-front and receive a product that you own the licenses to and is installed by your ERP provider and run on your own server. You need to own and manage your physical computer server or servers internally, and complete all the back-ups and upgrades to the software. On-premise software can be set it up so users can access it online and remotely.
How it compares on…
Technical deployment: Your ERP provider will install the software licences on your own office-based server. On-premise installations can overcome barriers such as slow or unreliable internet. You also need to maintain your server, which means you need access to technical expertise.
Cost: Often requires a large upfront capital expenditure to purchase the software and implement it. But there are no continuous subscription fees. You’re also responsible for all ongoing costs of managing the security, maintenance, and replacement of your server/s.
Software functionality: Your ERP provider will apply updates and patches to the software. The software is less scalable: if you need more bandwidth or users you may have to invest in more servers.
Cloud-based ERP
Cloud-based is a more modern and increasingly popular approach where a business pays a subscription to use software, which is made available to them online via a server that is owned and managed by the software vendor. Cloud computing means the server infrastructure, security, data integrity, backups and updates are all managed by the vendor.
How it compares on…
Technical deployment: It’s generally faster and simpler than an on-premise deployment. There’s no need for expensive, on-site infrastructure.
Cost: The prevalence of the cloud-first, Software as a Service (SaaS) model of software and efficiencies of scale it enables for vendors, makes it a more cost-effective option. Many businesses appreciate being able to pay monthly for their software subscription using operational expenditure. You also save on IT management and support costs.
Software functionality: It’s easy to create and build on a mix of integrated functionality, or increase the number of users – helping you scale your business faster if you grow or expand overseas. Updates are automated meaning your software remains current and highly functional.
Hosted ERP
Private hosted cloud means your software (whether you opt for a perpetual license or subscription) is accessible in a cloud environment that dedicated exclusively to your business, via servers hosted and managed either within your company (on-premise) or by an outsourced vendor. This provides the benefits of cloud computing but allows businesses to retain greater control over things like when to implement upgrades.
How it compares on…
Technical deployment: Private clouds are a more complex deployment because you either need to set-up virtual private cloud hosting, or have your own proprietary infrastructure on-premise to create a single-tenant cloud environment. You’ll require access to IT expertise to successfully implement and maintain a private cloud.
Cost: Because your cloud environment is private you will pay more than you would for a public cloud, especially if you need to maintain your own data centres. Added costs will depend on the level of support you require from your virtual private cloud hosting provider.
Software functionality: You can access all the real-time workflows and data-sharing, self-service and scalability that come with having applications available in the cloud.
Cloud vs On-premise vs Private Cloud Security: a comparison
It’s a persistent myth that cloud-based software is less secure. Leading ERP software vendors like SAP, Sage and MYOB are large andinnovative companies whose success has been built on a commitment to delivering top-notch, secure cloud infrastructure, and hefty investments in research and development.
While cloud-based systems significantly reduce the responsibility for managing IT within your business, they don’t significantly reduce the quality of IT management your business can depend on when it comes to the security of your ERP software and business data.
It’s an irony that having greater control over your server or data centres via an on-premise or private cloud deployment can actually make you more vulnerable. Ownership of your own infrastructure does not negate the risks of cyber attacks or downtime—it simply increases your organisation’s control and accountability. You need to have high levels of confidence in the people and systems you rely on to keep your on-premise infrastructure secure and well-maintained.
How to choose between cloud, on-premise or hosted?
It’s easy to see on the face of it how a cloud-based ERP solution could be more appealing because it reduces the resources you need, and increases the flexibility with which you can access functionality and your data. The majority of our clients prefer a cloud-first approach.
Cloud-based software is multi-tenanted, which means multiple companies run the same software side by side (although their data remains private). Conversely, a hosted private cloud has a single tenant—your business. That makes it ideal if you have an especially complex implementation, stringent security needs, or sensitive data: but you will pay a premium for the privilege.
An on-premise implementation can make sense for some companies, especially those that prefer to have more control over costs and their IT infrastructure. Limitations posed by patchy internet access can also make on-premise more suitable in some cases.
Cost is always a factor, but remember that regardless of which option you choose—you will still need to make an additional investment to ensure the successful implementation of the software, and any development work associated with customising the software for special use cases.
Ultimately your decision should be based on what will work best for your business by considering the pros and cons of each deployment option against factors including your budget, internal resources and future growth plans.
It can help to ask yourself:
What option best matches my internet and infrastructure capabilities?
Do I have, or want to continue to invest in, significant internal IT skills/resources?
What’s the best payment option, given my budget, cash flow or tax considerations?
How flexible and scalable does my system need to be to match my evolving business model, talent management approaches, or strategic plans to enter new markets/countries?
If you need more help weighing up the pros and cons of different ERP software deployment methods you can talk to an experienced consultant from Leverage Technologies. Call 1300 045 046 or email [email protected].
Think it might be time to embrace an Enterprise Resource Planning (ERP) solution or upgrade outdated systems to give your business a competitive edge in 2019? Gain total insight into the ‘why and how’ of modern ERP software implementations to help you take action.
In just a short time there’s been momentous leaps and bounds in the way technology enables us to communicate, capture and use data, and lighten the load on our human workforce when it comes to manual tasks and complex analyses.
The business world has changed enormously as a result. Innovation in business models, products, and services is now seen as essential to maintaining a competitive advantage.
However, there’s still room for progress in many organisations, who aren’t yet fully benefiting from technologies that streamline and automate daily tasks and provide the insight required to improve decision-making and customer experience.
Which is why many savvy C-suite leaders will make 2019 the year they harness the power of Enterprise Resource Planning (ERP) software.
If you want to tackle digital transformation in your small to medium enterprise in 2019, this up-to-the-minute guide covers: why an ERP solution is necessary; how to choose the most effective ERP software; and what makes for a successful implementation.
A golden era for ERPs: why 2019 is the ideal time to upgrade
The two most likely triggers for CEOs and CFOs to consider a new ERP solution in 2019 include:
You’ve outgrown your basic accounting software: Your company has grown larger or more complex and your existing software doesn’t allow you to report in a timely way and provide high-level advice to the Board. You’re tired of manually compiling consolidated financial reports and manipulating data to reveal details of costs and performance at the regional or team level.
You have an ERP or bespoke solution that’s past its prime: You implemented a solution many years ago butyour ERP hasn’t stayed current or hasn’t been well supported. Without the functionality you need now, your team is wasting time on convoluted workarounds (rather than benefiting from features that reduce duplication, save time and enhance productivity).
In the first scenario, you might wonder if moving from an accounting platform to ERP software is overkill or not a good fit for your industry or business type. In the second, you might be disillusioned with the idea of one platform that can ‘do everything’.
But in both cases, taking action to implement a robust, full-featured ERP solution in 2019 is a wise move. Here’s why:
2019ERPs are a dramatic improvement
The breadth and depth of what an ERP solution can do hasevolved significantly since the early days. In the 70s and 80s, the software was more limited to technical materials requirements/resources planning (MRP) functionality to support manufacturing and the associated management of shop floor, distribution and accounting tasks.
Infographic – A brief history of Enterprise Resource Planning Software
Today, leading ERP solutions provide a truly comprehensive way to manage whole-of-business workflows and data for every kind of business—often within a Software as a Service (SaaS) model that makes IT management more reliable and cost-effective.
ERPs you can implement in 2019 touch on every aspect of your business including:
Financials
Sales
Purchasing
Production
Inventory
Logistics
Customer Relationship Management (CRM)
Warranty and returns
Business Intelligence and more.
Your data is readily available in the cloud, consistent across every office or warehouse you operate, and upgrades can be applied easily (and often automatically).
You can facilitate a remote workforce or do business via your smartphone while ensuring all employees are working with the same data regardless of where you operate across Australia or around the globe.
Tailored yet flexible: modern ERPs grow with you
One of the most compelling reasons to choose an ERP solution over software that is purely ‘web-based’, is the granular level of customisation that’s possible. Reputable ERP solutions have experienced reseller partners worldwide that work with you to tailor your ERP to match the specific structure, workflows and reporting needs within your enterprise.
Which ERP Software modules are key to your business? Tailor your ERP to match the specific structure, workflows and reporting needs within your enterprise.
Yet customisation isn’t constraining in the modern ERP solution. In 2019,world-leading ERP vendors offer more flexibility than ever before: you can pick and choose from modules that reflect what you need right now and add new functionality as you grow—whether it’s additional modules from the same vendor, affiliated third-party providers, or via seamless integrations.
You might start out with a focus on financial management to support theCFOs growing responsibilities for corporate performance, but then it’s easy to build-out your ERP’s functionality in following years—say, to include an HR management component—as your team expands.
As your business grows or business conditions change, modern ERP solutions can adapt.
Avoid these pitfalls when choosing an ERP in 2019
We’ve established that implementing a new ERP in 2019 is smart if you need greater visibility, insights and automated workflows within your organisation.
Following the steps outlined further within this post will help CEOs and CFOs gain greater clarity around the factors to consider in selecting the right ERP and what to expect at each stage of the process.
But first, it pays to quickly cover where many people go wrong, so you can avoid common pitfalls.
What leads to choosing the wrong ERP software solution?
Factors that contribute to choosing the wrong ERP software – here is what to look out for
Delaying implementation despite an obvious lack of speed, capability and reporting finesse within your business (and growing internal frustration among your employees).
Failing to effectively consult internally in order to comprehensively define your technical requirements for each department and team.
Not weighing up the pros and cons of cloud versus on-premise early in the process.
Thinking in terms of costs alone, rather than how to best enable business process improvement and growth.
Not defining a budget in order to narrow your search parameters and establish clear expectations internally and with your third-party provider.
Here are the essential steps to follow to make a well-considered choice as you explore your ERP options in 2019.
1 – Define what success looks like for your business:
Start by imagining your future state.
How will you know if you’ve chosen the right ERP and had a successful implementation in 12 months from now?
Asking this question is designed to help you elucidate the operational improvements you expect and need your ERP to facilitate, for example:
faster reporting timeframes;
a reduced debtor days ratio;
or less machinery downtime on your production line.
In this early stage, it’s also important to reflect on the processes and structures within your business that must be mirrored in the ERP solution you set-up. It can be helpful to examine your current systems (digital or otherwise) and generate a list of the advantages and drawbacks for each—to help you identify gaps, and the functionality you want to retain.
2 – Explore your technology ‘must-haves’:
Always start with the business process improvements you need to address, but once those are clear in your mind—it’s time to consider the technological factors that will make your business run better. For example:
Do you need the scalability of cloud-first software? In comparison to an on-premise system, software hosted in the cloud is delivered via a subscription-based licensing model which means no large, upfront capital expenditure. There’s also no need for expensive, onsite IT infrastructure and ongoing support to maintain security.
Is mobility essential?Interfaces that can be easily accessed via mobile devices support a productive workforce now and into the future, with the rise of remote work and telecommuting. Also, handheld technologies are increasingly being used to support workers in the field, on the shop floor or in a warehouse to do their jobs better—which should connect to your ERP.
What kind of database do you need? Is big data management a current or potential future concern for your business or industry? What level of security, support and scalability do you need in relation to the database underpinning your ERP?
Are there tools you’ll be using that must be integrated?Identify any essential programs that you will continue to use that should be integrated with your ERP software, e.g., MS Office.
Will you be adopting IoT, AI, AR, VR etc. within your products or systems? When you consider the emerging technologies that may become commonplace in your industry, your choice of ERP is affected. An enterprise connected by a powerful ERP solution with automation and machine learning capabilities that can leverage data from multiple sources.
Is e-commerce and geolocation marketing important? Is being able to trade online seamlessly or implement location-based marketing tools like beacons vital for your future growth? Your ERP should allow for e-commerce, customer relationship management, and EDI integration.
Modern ERPs have the potential to provide your business with a mind-bogglingly vast array of features and functions. Before you delve too deeply into researching software products, prioritise the functionality that matters most. For instance, if you’re a wholesale distributor, you might focus attention on finance, inventory and purchasing functionality. If you’re a food processor, manufacturing functionality is key, but you might specifically be keen to improve your ability to manage traceability. Some tips for prioritising functionality:
Refer back to the notes you created in step one—was there functionality from the systems you currently use every day that must carry over into a new solution? What were the gaps?
Ask a ‘functional head’ from each department to review and document requirements based on their day-to-day activities.
Use your business structure and planning documents to help determine features you need: for example if you operate in multiple countries or have multiple ABNs, you need functionality to support cross-entity consolidation.
Don’t focus on features that you only might need. If you don’t currently have complex manufacturing management needs, don’t prioritise that functionality. You can grow into your ERP solution and add new functionality as needed.
Refine your notes into a high-level checklist (1-2 pages) that you can use to drill down into the detail as you know more about what’s possible within different software.
How much should you spend on ERP software in 2019? What’s the typical investment required for a company of your size? The answer will vary depending on your businesses requirements, number of users, customisations, integrations and your implementation needs. However, ERP investments tend to range from between $20,000 to more than $1 million for a larger corporation with more than 1000 employees.
In this day and age, there’s a treasure trove of free information available online to help businesses research their software options. There are excellentblogs, comparison sites, and case studies that can help you understand the ERP market and differences between products. Remember though that the information available online is general in nature, and pricing will not always be transparent. That’s because each company’s instance of ERP software licensing and implementation will be unique to them. If you have questions you can alwaysspeak to an experienced ERP consultant from Leverage Technologies—we’re genuinely interested in helping you find the best solution to function better, and we’ll be up-front if we think the ERP software we support isn’t right for your business.
6 – Obtain and interpret proposals for ERP implementation:
So, you’ve got a shortlist of products you think might be a good fit. The next step is to seek a proposal from atrustworthy ERP implementation partner, like Leverage Technologies. Because you’ve done the work to define what you want in terms of business process improvements, technology and functionality—this should help ensure you receive proposals that match your needs, which you can assess based on the investment budget you’ve allocated. Keep in mind that if you obtain multiple proposals, there can be differences in price depending on: the software and its licensing model; the providers’ understanding of functionality and customisation required; support options; implementation methodologies and process; and team size and expertise. Some providers may incorrectly scope a project or make assumptions that reveal their lack of experience, which means their proposal doesn’t accurately reflect the true time and effort required for a successful implementation.
Implementing new ERP software in a timely way, and within your budget will rest heavily on project management. Your ERP implementation partner and your internal project management team need to work in unison to ensure decisions can be made quickly, scope changes are minimised, and issues can be addressed through internal channels. It’s important toappoint an internal project manager that has the authority, respect and communication skills required to guide your implementation. Otherinternal muscle should be engaged during your ERP implementation to manage the configuration, training and testing required to deliver a great end result.
If you adopt a new ERP solution in 2019, user acceptance testing represents a key milestone in your implementation process. You can’t skip testing or do it sloppily and expect a smooth transition to your new ERP software. It’s important to consider:
When will you start and how will you phase testing in order to be ready for ‘go-live’?
What kind of test scenarios are required to understand if the system is up-to-scratch?
What different test environments are needed to replicate the product environment?
What will you measure and how will your record and present test results?
What is your change management plan to address issues that arise in testing?
Have testers been chosen, and is there a commitment to allocating the time required?
In 2019, ERP software is key to digital readiness
It has become unavoidable to use technology to support business process management in one form or another. Even if you don’t consider yourself a ‘digital business’, it’s likely you already use a wide range of software and hardware solutions.
The problem is these technologies are often applied haphazardly, creating a hodgepodge of infrastructure, data, skills and understanding across your business. That leads to increased risk, costs, confusion, information silos, and lack of visibility for senior executives.
Lack of continuity in the systems, data and supply chains you rely on to operate your business can bring things to a standstill when what you actually want is to accelerate and grow.
That’s why implementing ERP software in 2019 is worthwhile: especially for businesses experiencing rapid growth that are crying out for a more integrated, coordinated business landscape.
Start by examining your business, software and implementation needs step-by-step. Prepare to make this your year to transition to a more integrated, high-level ERP solution that will bring significant benefits to your business in both the short and long-term.
Want help to navigate the world of ERP software to ensure you reap the benefits of digital transformation in 2019? Call 1300 045 046 or email [email protected].
