Tag Archives: ERP deployment

How to implement the wrong ERP in 5 steps

A beginner’s guide to choosing the wrong ERP software in 5 steps

We often write about Enterprise Resource Planning solutions and what businesses should be looking for in terms of budget, functional fit and other technical aspects.

After having implemented ERP software for more than 250 businesses we can surely say that choosing an ERP software solution requires a strict process, clear team responsibilities and the expertise of a trusted third-party advisor.

But what if you are at your first attempt and want to speed up the ERP selection process? What are the risks that you should be aware of to avoid implementing the wrong solution?

In today’s article, we give an overview of what (from our experience) typically leads businesses to implement the wrong ERP software solutions.

 

#1 – Overlooking the “ERP readiness” signals

The first (and easiest) way to start your journey to a new ERP software solution with the wrong foot, is to delay your ERP implementation. Not implementing an ERP software when the time comes can be a costly exercise for the whole business.

In the article “6 ERP readiness signs growing businesses are likely to encounter”, we identify the main readiness signals as:

  • Your business has outgrown the current accounting software;
  • Your business is using too many manual workarounds;
  • The current solution is running too slow;
  • Your capabilities to expand a geographic expansion are limited;
  • You need new tools (eCommerce, EDI, AP Automation,…);
  • You need better reporting (“A single source of truth”).

When these six signals start showing themselves in your business, it’s time to start looking at a new ERP software solution.

 

#2 – Not defining your technical requirements (In details!)

ERP requirements should be defined prior to commencing any research and selection process. The requirements list should come from every department and area of the business including finance, warehouse, logistics, manufacturing and customer service to name a few.

The requirements list should define the purpose and goals of the new system and answer the question – “how does the perfect environment look for my various departments and for us as a business?”.

It is vitally important to structure the ERP selection process according to your requirements list to ensure success in the short, medium and long-term.

Businesses that don’t have a clear idea of what the new ERP system should possess are likely to encounter a number of challenges post-implementation.

Our advise is for you to take enough time to write a requirements checklist for the new system or to work with an experienced ERP provider to guide you through the process.

 

#3 – Not considering Cloud Vs On-Premise

Cloud ERP or On-Premise ERP? If you haven’t asked yourself this question, you probably should. ERP software solutions are rapidly shifting to a Cloud deployment model for several reasons – cost-effective implementation, fully managed and maintained, low OPEX, enterprise-grade security, and more. On the other side, an On-Premise ERP setup means that you have to implement and maintain the technology environment to host the software.

There is no right or wrong answer when choosing between the two. However, you should be aware of the advantages and disadvantages that these solutions present. Ultimately, you should look beyond the 5-year ROI to truly understand the benefits that one setup will give you over another.

 

#4 – Overlooking to capabilities of a modern ERP

Think about your new ERP software as an enabler, rather than a cost centre. New technologies available to businesses of all industries and sizes mean that you can unlock further efficiencies for your business.

Large high-tech companies are already pioneering disruptive technologies, so you don’t have to. Big Data, Artificial Intelligence, IoT, Customer Experience Platforms to name a few. When choosing a new ERP software, keep in mind these new technologies.

 

#5 – Not defining your budgetary requirements

How much should you spend on your ERP implementation? Have a rough idea of the budget available to the implementation of a new ERP for your business. This will help you narrow down your research and avoid wasting time researching the wrong solutions.

The budget is a critical part of any ERP implementation; it should be discussed internally and with your third-party provider upfront in order to set the right expectations.

 

Conclusion

At Leverage Technologies, we have implemented ERP software for more than 250 Australian businesses since 2005.

Over the years, we have developed a deep understanding of how different ERP solutions serve the needs of various businesses, from any industries and size.

For more information or to start your journey to a new ERP software solution, call us on 1300 045 046 for a no-obligation consultation or email [email protected].

ERP Implementation- The Final Barrier To Quick Cloud Deployment

ERP Implementation: The Final Barrier To Quick Cloud Deployment

In today’s world of Cloud, consumers want to pay for their software monthly, avoid all IT infrastructure and pay as you go on all services.

After all, a monthly subscription takes care of everything. Well, almost!

When it comes to Enterprise Resource Planning (ERP) there is one remaining barrier to monthly subscriptions – ERP implementation.

Today, most SME organizations have already moved to a Cloud solution for some or all of their IT infrastructure. We all know and understand why…

Cloud can minimize the one-off capital expenditure (capex) spend on infrastructure, no requirement for on-site hardware, only pay for what you use, access to better security and infrastructure.

On the other hand, ERP has been slower to move customers from on-premise to Cloud, but the journey is now well underway and adoption rates for Cloud ERP / Business Management Solutions are increasing every day.

 

Addressing ERP implementation costs and moving towards a lower overall cost of ownership

In a Cloud first world, businesses want to consume and pay as you go. Let’s assume you are paying $200 per user, per month for your Cloud ERP solution (SME solution), if your business requires 20 users then you are paying $4,000 per month for your ERP licenses, infrastructure and support. A great use of operational expenditure (opex).

The barrier to entry is the implementation cost – which for most SME ERP products will be in the region of $40,000 to $100,000 for ERP implementation services. This assumes an average size SME looking to implement ERP for Finance, Distribution, BI etc.

These upfront implementation fees can be a hard pill to swallow when you are wanting to push your Cloud fees through an opex, pay as you go, model.

So, how do ERP providers in the SME space address implementation costs and move towards a lower overall cost of ownership? The view from the industry is that templated, pre-configured implementations might be the answer. Let’s explore this in more detail.

Pre-configured templates: the ERP answer to implementation cost

Most vendors and ERP implementation partner organizations are templating ERP implementations for the SME market.

Under this implementation methodology, you usually have three implementation offerings.

 

Start-up: A basic standard configuration of an ERP solution.

In this configuration, a high percentage of the configuration settings are pre-defined. Best practice is used, and the customer gets minimal input into configuration choices.

As an example, a standard chart of accounts is dropped into the configuration set where standard forms are used. This start-up type implementation model is well suited to companies with standard requirements, in an industry that is easy to automate and where there is no integration or customization required.

  • Advantages: quick time to implement, quick return on investment, low-risk implementation, low cost, get the advantages of a basic ERP solution without the internal resource requirements.
  • Disadvantages: any non-standard configurations will cost you extra, you are assuming that the standard configuration will fit your business – what if it doesn’t?

 

Mid-range: A basic setup with additional, non-standard configuration options.

Using this implementation template methodology the ERP implementation partner implements a templated, best practice solution but allows for some non-standard configuration options. In this model, additional standard options can be added to the configuration for a fixed fee. An example of this might be e-commerce integration. Using this implementation methodology an e-commerce integration suite can be added as a standard offering – added to the implementation pack. This implementation model has the advantage of offering a relatively quick time to implement with some (limited) flexibility associated with the final configuration.

Comprehensive: The “fits perfectly / like a glove” model of implementation.

Using this implementation structure is associated with the more traditional ERP implementation model. Scope the requirements and configure the ERP solution to those requirements.

The disadvantages include things like cost, time to implement and risk. Advantages include the fact that you, the customer, get exactly the functionality that you are looking for and the associated benefits.

Your choice of a fully templated ERP solution vs a highly configured option will depend on multiple factors:

The good news for companies implementing ERP is that the timelines to implement and the costs associated with implementation are definitely being reduced as vendors and implementation partners move to the Cloud and look to use technology to provide simpler, less risky implementation methodologies.

 

Conclusion

In today’s world of Cloud, businesses want to pay for their software monthly, avoid all IT infrastructure and pay as you go on all services. When it comes to ERP there is one remaining barrier to monthly subscriptions – ERP implementation.

The use of pre-configured, template ERP implementations is offering more choice and real advantages through quicker Return on Investment.

As is often the case with ERP implementations there is no right or wrong answer to the question of which structure to use. The good news is that as a customer you have choice.

Are you evaluating possible ERP options for your business? Call 1300 045 046 or email [email protected] to speak to one of our consultants.