Tag Archives: ERP Software

Accurate inventory is not a myth: Enabling accurate inventory forecasting through ERP

In today’s post, we are going to explore how Enterprise Resource Planning (ERP) empowers wholesale distribution and manufacturing businesses with advanced inventory forecasting functionalities to resolve internal conflicts between warehouse, sales and finance.

The debate between your Sales, Finance and Inventory/Logistics Managers may sound something like this:

Logistics Manager; “If sales forecast more accurately and sell to a plan we will be able to hold the right inventory levels…”

Sales Manager; “If purchasing and the warehouse team held the correct stock levels and kept us informed we would be able to sell more…”

Finance Manager; “We need more accurate stock holdings and we must reduce inventory levels to reduce the burden these stock levels place on cash flow…”

These are the three “most seen” competing points of view from most small to medium-sized businesses in the wholesale/distribution and manufacturing sector. The good news is, accurate inventory forecasting is not a myth!

So, how can an ERP solution help you manage these conflicting points of view and forecast inventory demand at any given point in time?

Accurate inventory forecasting is not a myth

ERP solutions give you the functionality to provide faster, better access to information for better decision making. This is particularly true with regards to inventory management for wholesale distribution and manufacturing.

Here is how an ERP solution can help resolve your internal conflict and give you accurate inventory forecasting functionalities.

Planning

The essence of an ERP solution goes well beyond invoicing, customers, financials and suppliers. Planning is at the heart of a good distribution and manufacturing ERP solution.

Planning tools for purchasing and production planning will help balance the supply and demand equation to consider thousands of transactions and recommend a plan. Think of the elements of any plan for a wholesale distribution or manufacturing business:

Lead times;
Economic order quantities;
Container and shipping management;
managing multiple suppliers;
forecasts and min/max stock levels.

It is impossible to manage all of these “moving parts” without the automation that an ERP solution provides.

A good planning solution will map out all relevant components to recommend purchase orders for raw materials and works orders for production planning. A good planning solution balances thousands of transactions to make the right recommendations.

Information

Decision making requires information; timely, relevant information. A good ERP solution provides relevant information such as lead times, current stock levels, historical sales, supplier on-time/in full reporting and expected delivery dates with detailed available to promise.

When your various business departments get access to all the information in real-time from your supply chain, your staff is empowered with the accurate data they need to make informed decisions.

Analytics

As mentioned, data empowers our staff with accurate information to make informed decisions. In today’s world, we have access to “big data” from multiple sources.

Let’s put this data to good use through analytics to help us with decision making. Decision making is about timely, accurate information. A well-implemented ERP analytics toolset will give you the information that you need when you need it to help you with the planning and forecasting.

Forecasting

Tough to get right in any business. Not to worry, ERP gives you access to automated forecasting tools and relevant data for forecasting historical sales, market trends and product updates.

Mobility

We live in a mobile world. All of the functionality that we require from our ERP solution should be available from a mobility device. Once again, the emphasis is on timely, accurate information.

Decision making can’t wait, and neither should you!

Access to information where and when you need it means that mobility remains important.

Conclusion

The debate between sales, warehouse management and finance can be solved by implementing an ERP solution to empower your business with advanced inventory forecasting functionalities.

Implement an ERP solution to provide your business with the information, analytics and planning tools to close the gap between planning, scheduling, sales, inventory management and finance.

At Leverage Technologies, we have been helping Australian businesses choose and implement the right ERP software to grow smart. For more information feel free to call us on 1300 045 046 or email [email protected].

5 ERP Replacement Signals Every Growing Business Should Look Out For

Leave a reply

ERP software has the ability to streamline your operations and increase productivity, no matter what the size of your organisation.

However, as your business grows, your ERP system may struggle to keep up with the increasing complexity. When this is the case, it is important to identify the ERP replacement signals as it may be time to upgrade your system or even start shopping for a completely new solution.

Here is our list of the top 5 ERP replacement signals that growing businesses should look out for

#1 You Have to Use Another Program

Enterprise Resource Planning software should provide you with the ability to keep everything within the same database. This includes everything from finances to human resources. One of the main benefits of ERP is that you have a single program as opposed to using multiple programs in order to get the job done.

If you find that you suddenly have to invest in another program because your ERP software is incapable of providing you with the desired level of functionality, it may be time to replace your existing software.

#2 The System is Slowing Down

In some instances, a system will slow down after you have entered so much data. Not all solutions are capable of dealing with big data. As a result, you will find that even the simplest tasks take longer to perform. When this happens, you may not be able to increase the speed, which means that you might not have chosen a scalable ERP solution. If this is the case, upgrading or changing solution might be the the best option to keep up with growth.

#3 It isn’t Cloud-Based

There are a number of cloud benefits. If your ERP software is housed on your server, you are limiting yourself tremendously. You won’t have access to any of the data or reports when you are on the go. If you require a financial report while you are on business travel, someone will need to run the report and email it to you. Not having data available in real-time can make it more difficult to make important decisions regarding operations.

Cloud-based solutions offer you more flexibility in the workplace.

#4 New Features are Not Present

There are a lot of companies that have grown dependent on their ERP systems. When you invest in ERP systems, you need to look at the various features that are present. It’s possible to manage your finances, HR, procurement, supply chain, and more within your system. However, if you are lacking the latest features and there is no availability to choose add-ons, you may be limiting yourself. This means that you may not be able to enjoy the level of profitability and productivity that other businesses have.

Taking the time to explore new ERP systems may be what’s needed to improve your operations and expand your technology.

#5 Integration is Poor

Consider the various processes that you use in order to keep your business up and running. Various departments should be able to integrate into your ERP system. This will involve integrating the system into your operations, allowing you to streamline everything.

It’s important to explore your ERP requirements to ensure that you choose a software solution that can improve workflow while also helping to a line of the different departments that you have. You can receive real-time information through reports, lower operational costs, as well as enhanced collaboration. However, if your integration is currently lacking, it may be time to upgrade your system to one that can provide a more consistent infrastructure as well as high user-adoption rates.

ERP is only as helpful as the system’s features allow it to be. You want to do everything you can in order to improve efficiency while reducing risk. If you pay attention to the replacement signals, you will know when it’s time to upgrade your system so that you can enjoy a greater level of functionality and begin lowering both management and operational costs.

Conclusion

As growth put additional pressure on your internal systems, your business needs to look out for the five key ERP replacement signals.

Things like islands of information, system speed and lack of functionality can translate in poor performance for your business. When the time comes, you might be presented with the options of upgrading your current system or replacing it with a new ERP software.

At Leverage Technologies, we have helped hundreds of businesses implement the right Enterprise Resource Planning to grow smart. For more information or to speak to a consultant call us on 1300 045 046 or email [email protected] today.

Is Sage X3 The Ideal Discrete Manufacturing ERP?

Leave a reply

Discrete manufacturing encompasses a wide variety of businesses, from the highly technical—such as medical devices, robotics, aeroplanes, computers, smartphones and cars—through to essential everyday items like toys, appliances, furniture, windows and fencing.

While the products vary, one factor remains constant: the need to ensure your processes are efficient and you’re producing high-quality, in-demand goods.

Discrete manufacturers are realising they need to harness technology to improve their whole-of-business operations and gain a competitive edge, which often means implementing a modern Enterprise Resource Planning (ERP) solution.

What do discrete manufacturers need from an ERP solution?

Discrete manufacturing businesses looking for ERP software must prioritise solutions that simplify and automate inventory management and production scheduling.

If you have to wait for a part that’s being shipped in from overseas, or experience a backlog at one step of your process, it can halt the entire assembly line. Too much stock on hand hampers your cash flow, and too little makes life hard for your sales team.

Production is often complex; with detailed BOMs (bill of materials), and different stages of assembly requiring attention to ensure quality in the end product. Not to mention engineering changes, configure-to-order requirements, or versioning to meet the demand for different features or price points.

To reduce costs and meet changing market needs, the best software solution is one that can be customised for your precise production tasks and also delivers clarity on your broader business performance.

Why is Sage X3 an ideal ERP for discrete manufacturing?

If you make products comprising multiple parts to exact specifications, Sage X3 is the ideal ERP.

Sage’s ERP is designed to give manufacturers complete and real-time data to make running a more precise and cost-effective operation possible. For discrete manufacturers, it offers a nuanced ability to:

Plan ahead for ordering raw materials and capacity.
Understand sales demand and manage inventory accordingly.
Schedule and track work and oversee shop floor activities.

The software includes forecasting, which feeds into tailored recommendations that help you optimise inventory levels. Create custom dashboards, monitor work orders, be notified when to buy materials, review data and take action as needed.

Sage adjusts its suggestions based on real-time changes in sales and order information, so you can make proactive decisions that save your business time and money.

Because Sage ERP automates many tasks within an integrated system, it gives you access to better data, fewer islands of information, and a more well-oiled operation.

Innovate with an ERP made to increase your sales

Traditionally making individual products has been harder to scale due to a reliance on components, sequential steps and quality requirements. However, Sage excels in helping discrete manufacturers analyse product line profitability and develop new products.

It’s simple to review and release the same product in different versions or create multiple kinds of the same product. You can quickly and cost-effectively plan for product diversification within the ERP, comparing the cost of variations in parts, change in a production location, or by the batch size.

Sage makes it possible to automate change management workflows to have new product versions approved, and then introduce new products or version information so that it’s available across your business—at the point of sale, BOM, and routing levels.

An effective ERP is now essential for discrete manufacturing

Your business clients and end consumers expect innovation, speed and personalised service. It’s ineffective to rely on outdated legacy systems or paper-based plans.

Systems that don’t give you end-to-end oversight of your manufacturing process are too slow and inexact, leaving your business more vulnerable to mistakes, recalls, and cost blowouts.

On the other hand, with Sage X3 as your ERP solution you can forecast, anticipate and respond to changes in operational and production needs, so you can meet and exceed your consumers’ needs.

For more information on Sage X3 as an ERP for your discrete manufacturing business call us on 1300 045 046 or email [email protected].

ERP for the Food and Beverage Industry: A Recipe for Success

2 Replies

Looking for a Food ERP Software? In this article, we are going to explore some key aspects to consider when selecting an ERP Software for the food industry.

The Australian food and beverage industry is highly regulated…..HACCP, traceability, quality control – these are just some of the key aspects that organisations operating in this industry have to consider when selecting an ERP system. And the list goes on!

With strict regulation and compliance requirements, it’s important to understand what the challenges in the food and beverage industry are before proceeding any further.

Australian food and beverage industry overview and key challenges

The food industry in Australia is going from strength to strength – with a growing population and an abundance of great locally produced food products the Australian food industry is well equipped for further growth. The industry appears to be split into three core sectors across food processing and food distribution;

Smaller businesses offering food distribution to cafes and restaurants;
Mid-size food processing companies
Larger food processing multinationals.

When considering a new ERP software for the food industry there are multiple complexities – for small and large players. Challenges like traceability of raw materials and finished goods, random weight, weighing scale integration, run/delivery management and sequence-dependent changeover can offer some challenges for ERP providers.

The key for the smaller players in the food processing or food distribution market is to be able to find an ERP provider that offers the required level of functionality and expertise without the associated price tag. The intention of this article is not to recommend any specific ERP application – but more to give general advice on ERP product selection for organizations operating in the food industry.

How to choose the best ERP software solutions for the food and beverage industry

In this short video, we explain the 5 key functionalities that you should be looking for in a modern food ERP software solution for your business.

Things to consider when selecting an ERP software for the food industry

Key takeaways

Functional / requirements – as always when selecting an ERP solution it makes sense to list your functional requirements in each area of the business. This includes functional requirements for finance, sales, purchasing, inventory, manufacturing and all other business processes. In the food industry, your requirements for finance will usually be reasonably standard. As a result, a lot of focus is usually placed on the operational side of the business. Most specifically a lot of focus should be placed on the food industry-specific ERP requirements – expiry dates, random weight, traceability, HACCP etc.

Budget – there are some great ERP products suitable for the food industry available in Australia. These products are offered at very different price points. There is no point investigating a great ERP product for the food industry with lots of reference sites only to find that the implementation would require a budget of three times your intended spend on ERP. Unfortunately, we all need to be realistic and the budget has to play a role.

Generally speaking, ERP products can be divided into three broad categories – tier 1, tier 2 and tier 3.

Tier 1 normally indicates the more advanced, high-end ERP solutions used by multinationals and bigger companies with larger budgets.
Tier 2 is the mid-range sector where many Australian food sector SMEs are looking for ERP products. The ERP players in this sector offer a complete ERP application aimed at medium-sized businesses.
Tier 3 is typically the smaller end of the market – less complexity, lower implementation investment and quicker implementation timeframes.

The challenge with ERP for the food industry is that very often ERP solutions should not be selected purely based on the size of an organization but rather on the complexity of the business requirements. Put another way – what are the business needs? As we have already mentioned the food industry puts forward some relatively complex requirements. The challenge is that a small food processing business can have relatively complex ERP requirements. This will require a higher budget to implement. Even if the ERP software is given away for free experience tells us that more complex requirements by their nature take longer to implement and therefore require greater investment.

Methodology – whatever industry you are in when you implement an ERP solution you need to follow a methodology. The chosen methodology will offer structure and process to the implementation. The methodology should be selected based on the companies’ specific requirements, complexity, budget and size of business. There is no right or wrong answer for ERP implementation methodology. One size does not fit all when it comes to ERP implementation. Agile, waterfall and other ERP implementation methodologies should be selected carefully based on their merits and matched to your companies’ specific business requirements. Remember that ERP is about business – not software. The software is purely an enabler to doing better, smarter, more efficient business.

Timing – implementation timeframes for ERP can range from a couple of months to several years depending on complexity, resource requirements and other factors. Make sure that you set realistic go-live targets which allow for sufficient testing of requirements.

Let’s discuss some of the ERP for food industry requirements in more detail:

HACCP – a food management safety programme. Designed to control food safety through food safety and risk assessment plan. A well-implemented ERP solution can assist with HACCP requirements. Most specifically as these requirements relate to:

Traceability – a good ERP solution will allow batch/lot traceability. This will allow a food processing or distribution company to not only track and trace finished goods but also all components used in processing. This will allow full traceability if there are any product-related issues like contamination.
Monitoring – a principle of HACCP is the monitoring of critical control points. With traceability and manufacturing routing through ERP these critical control points can be monitored.
Procedures – monitoring of procedures and process flows is important in the food industry. An ERP solution can assist with document management and retrieval, automated quality assurance procedures (sample testing of raw materials and finished goods) and the automation of procedures. For example, an ERP solution can force a user to do a QA sample test prior to receiving raw materials into a warehouse.
Data – HACCP requires that food companies have access to data and good record keeping. An ERP solution with good reporting tools makes access to data easy. Even large volumes of data can be kept for several years and accessed at the push of a button.

Weighing scale integration – A common requirement for the food industry is weighing scale integration to the core ERP solution. This weighing scale integration can be relatively simple – providing scales for weighing cartons or boxes in the factory to check the actual weight vs expected weight of a carton of food or raw materials. More advanced ERP implementations might have integrated weighing scale functionality to automate the weighing process as a double-check that the right goods are being shipped.

Proof of delivery – when foods are delivered to a café, restaurant or hotel why not implement an automated and electronic proof of delivery solution on a handheld device – true mobility.

Run management – large and small food distribution and processing companies share a common goal – get your product to your customers on time and in full. Delivery run management involves the scheduling of trucks to make sure that we follow the most economic delivery schedule and that we pack the trucks according. As an example, the items for the first delivery are packed at the back of the truck.

Random weight – one of the more complex areas for ERP solutions in the food processing industry. Random weights indicate that you sell an item (for example rump steak) as a carton (sold by the carton) but you also have a variable weight in each carton. In this instance, the sell item of 1 carton might weigh approximately 10KG’s. The challenge for an ERP software solution is that the weights are very seldom exact. There can be weight loss on the meat and as such a 10KG carton could end up with a net, shipped weight which is variable. There are different ways to handle random or catchweight and your ERP provider will need to be across these solutions.

Reverse bill of materials – most ERP solutions want to treat manufacturing as the building of an item from various raw materials. As an example a bicycle is built from two wheels, a frame, a seat and more. These parts are assembled using the bill of materials. What makes food processing different is that you need a reverse bill of materials. In food processing, you start with one item (a whole cow) and then you cut the item into various finished goods – fillet steak, rump steak, etc. The complexity for ERP is the concept of one item of raw material becoming multiple finished goods.

EDI – if you are selling to the major food retailers in Australia your business will need to be EDI compliant.

We have talked about some of the complexities facing the food industry when implementing ERP – let’s not forget that when we implement a good ERP solution we get a whole lot more than a general ledger and invoicing. A well-implemented and functional ERP solution will open up all sorts of opportunities for improvement:

Instant access to analytics enabling the business to make informed decisions;
mobility for sales teams and delivery drivers (including proof of delivery);
run management to ensure the most efficient delivery to your customers;
on time in full reporting for your customers and suppliers;
better inventory control and
optimized purchase and production planning.

Food ERP Software Demo

Check how a true ERP software that is built for the food and beverage industry looks like in this short software demo of Sage Enterprise Management tailored to the food industry.

Conclusion

It is no secret that the food industry in Australia is going from strength to strength. Although highly regulated there is still room for Australian organisations to innovate on processes and operations to drive efficiencies at multiple levels.

This guide to selecting the right ERP software for the food industry aims to provide a better overview of the key challenges that this type of solution can help you overcome and how.

Do you operate in the food and beverage industry in Australia? Leave a comment below to let us know what challenges you are facing and what key benefits you would be looking for in an Enterprise Resource Planning system.

Template ERP Requirements: Defining Your Implementation Checklist

Leave a reply

Your ERP requirements have to be clearly defined prior to commencing the research and evaluation of your various ERP options.

If you have been tasked with gathering information about possible ERP options for your company and you are about to begin the research phase, follow the instructions below.

You can use this sample ERP requirements checklist to get an idea of what businesses like yours look for and what the ERP research process looks like.

Defining your ERP requirements starts with understanding the vendor selection process

If you are evaluating ERP (Enterprise Resource Planning) solutions you will no doubt be bewildered by the number of choices available in the ERP market. Questions about Cloud vs On-premise, Tier 1, 2 and 3 products, web, E-commerce, EDI, paperless warehouse, choices of the database and a whole lot of other questions will need to be answered.

When evaluating ERP solutions, it is important that you have a process in place for vendor selection.

This process should include a structure that has an emphasis on running a complete evaluation including:

Online investigation of potential solution providers;
High-level requirements analysis;
Demonstration of capability;
The high-level scope of works;
Assessment of implementation methodology;
Interviews with implementation team members;

More information about the appropriate ERP selection process is available here.

Let’s assume you are running the suggested ERP selection process. This is a somewhat formal structure to ensure downstream implementation success. However, you will still require a level of detail associated with defining the functional and technical ERP requirements.

Here are some ideas to get your thinking started with the ERP requirements definition process for your business.

Defining your business’ ERP requirements: sample checklist

We need to start our ERP selection process by looking internally within the business to answer questions about what functionality our business requires from the ERP system.

This starts at a high level and then drills down into each functional area of requirement:

What do we want to achieve by implementing a new ERP solution? It’s always worthwhile to ask the question – what does success look like for our business? In 6 or 12 months’ time, when we have successfully implemented a new ERP solution, how will our business look like?

Improved cash flow. Debtors days reduced from 75 days to 50 days for example;
Automation of tasks. List examples of tasks that you want to automate and how much time will be saved through automation;
Improved customer service. List how you plan to improve customer service through the implementation of an ERP solution. Examples might include giving your sales teams mobility devices and access to CRM for access to customer information before account management visits or the ability for a sales person to instantly access information associated with customer orders, delivery dates and stock availability for customers.
Automated reporting for quicker reporting timeframes. Month-end accounts to be finalised and published within 6 days of month-end. Timely information for better decision making.

When considering a new ERP solution, you will want to prepare your ERP requirements list. The below items (whilst not comprehensive) represent the sort of functionality you might be looking for.

Technical requirements

Consider Cloud vs On-premise, mobility and other technical requirements. A sample list of technical questions includes:

Cloud vs on-premise
Choice of database
Client computing requirements
Integration to MS Office
Server requirements (if you choose an on-premise solution)
Operating system
Development platform
E-commerce integration
Mobility options
Software development kit details
Updates and upgrade process and frequency
Bandwidth requirements
Third party integrated Solutions / complementary Solutions list
Client access with specific reference to remote access requirements – web client vs Remote Desktop
MS outlook integration

Finance requirements

Your ERP questions as they relate to the financial modules should focus on financial reporting, ATO compliance, management reporting, timely processing of information and automation of tasks:

Financial reporting with drill down to source transaction
Cash flow analysis and cash flow forecast reporting
Flexible chart of accounts
Dimensions and cost Centre accounting
Budgets – including the ability to load multiple budgets
Multi-company and consolidation reporting
Payroll integration
ATO reporting requirements – BAS
Fixed assets module
Cash management functionality

Distribution requirements

Focus your questions on purchasing, inventory management and logistics.

Warehouse management options
Bin location functionality
Scanning / paperless warehouse options
Purchase planning and forecasting
Serial number tracking
Batch traceability
Kitting Requirements
Stock take
Goods receipting
Freight management integration
EDI Requirements
Purchase orders with workflow and approvals
Multiple units of measure
Back to back orders
Price lists
Stock ageing reports
Stock expiry dates

For more information on how Enterprise Resource Planning is typically used in the wholesale distribution industry, check our video case study.

Manufacturing requirements

Focus on manufacturing planning and resource allocation. Consider the following sample ERP requirements for manufacturing businesses:

MRP (Material Requirements Planning)
Scheduling
Bill of materials with sub-assemblies
Works orders
Routing
WIP tracking
Shop floor data capture
Resource planning

For more information on how Enterprise Resource Planning is typically used in the manufacturing industry, check our video case study.

Customer Relationship Management (CRM) requirements

Focus on the sales and marketing process. There is a wide range of CRM and sales functionality available, from the very basic to the complex.

Sales force automation
Activities and task lists
Marketing automation
Newsletter emailing
Sales workflow
Reporting
Pipeline management
Mobility
Marketing campaign management
Service
Service management
Allocation of Support tickets
Service scheduling
Mobility capabilities
Service contracts
Timesheets
Warranty management

Reporting requirements

Reporting and analytics are key for most businesses looking to streamline their decision-making process and become proactive about their strategy. Consider reporting requirements such as:

KPIs
Dashboards
Real-time analytics
Pre-built data sources and “cubes”
Pre-built reports

Conclusion

It’s important to run a structured process of ERP selection to ensure success for your business. To do this, you need to define what success looks like for your organisation in the short, medium and long-term.

In this article, we have given some recommendations on what to consider when choosing your ERP requirements. This is a key step that businesses looking to implement a new system should take prior to beginning the selection process.

A Leverage Technologies we have been implementing helping Australian businesses choosing and implementing Enterprise Resource Planning for over a decade.

For more information or to speak to a consultant near you today, call 1300 045 046 or email [email protected].

How To Choose The Best ERP Solution: A Guide For Small To Medium Sized Business

Leave a reply

There is no quick, easy answer to the question “which is the best ERP software solution for my business?”

There are multiple different Enterprise Resource Planning (ERP) and Business Management Solutions (BMS) to choose from in the Australian SME market.

Rather than focusing on which is the best solution, in this article we will focus on the best process to ensure that your business implements the right ERP solution.

When it comes to ERP, every business is different

The first thing to understand is that when it comes to ERP software solutions, every business is slightly different. Even if your functional requirements are similar to another business, there are other influencing factors when it comes to choosing an ERP solution:

Internal resource skill set and availability;
Current systems;
Processes and structures within your business;
Budget;
Timelines;

Each of these factors and a number of other elements can influence which ERP solution is best for your business.

How functional requirements influence your ERP choice

Choosing an ERP solution that is well suited to your functional requirements is what the decision is all about. Aim for a solution that has the standard, out of the box functionalities that you are looking for.

List your core functional requirements and short-list ERP solutions that have a close functional fit to those requirements. Start at a high level then drill down to more detail as your investigation into ERP continues.

As an example, you might list your major requirements as follows:

Multi-company, multi-country with consolidation;
Inventory control across multiple warehouses;
- Bar-code scanning / paperless warehouse;
Simple manufacturing;
- Works order;
- Bill of materials;
- Basic MRP / planning;
Service and repairs;
- Management of the repairs and returns process;

Start with a high-level list of requirements (usually a one-page document). Align this to the vendors that believe that they are well suited to your functional requirements and budget. The ERP vendor will need to align the budget with expectations.

Keep it simple

Don’t over-complicate things. If your business does not require complex manufacturing or complicated supply chain management then, don’t buy it or try and implement it. Take baby steps, grow into your ERP solution and keep it simple – automated, but not over-complicated.

Cloud vs on-premise

Choose Cloud vs on-premise based on your company’s specific situation and requirements.

It is true that in 2018, about 90% of enquiries that the team at Leverage Technologies received are for Cloud-based ERP solutions. But, this does not mean that Cloud is the only way to go. Assess your company’s requirements and infrastructure before making a decision:

Internet reliability and speed;
Five-year cost structure review;
Remote access;
Growth plans;
Standard ERP vs bespoke (how “standard” are your requirements?).

Technology is becoming increasingly important

In an ever-changing world where technology is moving at a more rapid pace than ever before do not ignore the benefits that you might be missing out on.

Think about some of the advantages of a technically advanced, modern ERP application:

Cloud – More computing power available than ever before for a simple monthly fee. Pay as you go and add more computing power as you need it;
Mobility – We can’t be competitive in today’s world unless you offer true mobility apps, web client access and the ability to get the information that we want, when and where we want it;
E-commerce – Easy, integrated and available 24 x 7;
EDI – Integration for order taking and a whole lot more. Integrated into the Australian major retailers and extended (in some form) through your supply chain. Make it easy to manage orders and the delivery process;
AP Automation – Automate your AP process and approvals using OCR technology;
Internet of Things (IoT) – The connectivity of multiple devices across the internet to share data. Think of the multiple internet connected devices that we use daily and now, consider all of that data being shared. How can this data help us to make better-informed decisions with regards to customers, marketing, suppliers and team members to help us run a better business?
Artificial Intelligence (AI) – It’s coming to ERP. With massive data volumes being collected from multiple different sources, Artificial Intelligence will help us sort through data to pick trends and help make better decisions from machine learning.

Partnership matters

Choose your ERP software and Cloud solution carefully but choose your ERP implementation partner even more carefully! Your ERP implementation partner will take responsibility for transforming an off the shelf ERP solution into a tightly integrated solution for your business. Choose a partner that has previous experience in your industry and is a good cultural fit for your business.

Specifically look at your ERP providers:

Previous experience in similar industries with similar size organisations;
Support options;
Implementation methodology and process;
Team size, experience and how long team members have been with the organisation;

Take a medium to long-term view

This is surprisingly difficult to manage. If you take a view which is too “short-term” you risk having to re-implement a new ERP solution again in 3-5 years to cater for your growing business and the associated requirements.

Take a view which is too “long-term” and you risk over-complicating your implementation and choice of ERP as you try an implement functionality that you don’t yet need.

Balance these requirements for the best chance at success.

Conclusion

“Which is the best ERP software solution for my business?” Follow the steps in this article to narrow down your research and make sure that you focus on the right success factors.

There are a number of outstanding ERP providers and resellers in the Australian market and there is an ever-growing amount of competition for Cloud-based ERP. The winner is you, the customer!

As technology continues to advance at a more rapid rate than ever before and as the world of ERP solutions demands more value for money you will be able to choose from several competing solutions to choose the best ERP offering for your SME business.

4 Tips to Avoid ERP Budget Overrun Nightmares

Leave a reply

If you are considering implementing an ERP solution you might be asking yourself which are the major implementation risk areas that might lead to ERP budget overrun?

After all, you will have a budget and you will want to stick to it!

The board of directors approves a budget for software / cloud, implementation and on-going support. As the project manager or project sponsor you do not want to ask for more budget to complete the ERP project. At the same time you can’t risk to incur in a dramatic ERP implementation failure.

Imagine the scenario – the project scope has not changed but you need an extra 20% of the original budget allocation to complete the job – not a great scenario!

Here is how to avoid it…

Keep an eye out for this 4 high-risk ERP budget overrun areas

There are multiple elements to managing an ERP implementation and the associated implementation budget.

It all starts with having a realistic budget, good internal processes, a solid implementation methodology and the right resources (internal and ERP implementation partner).

Assuming you get all of these elements right, what can go wrong?

Let’s consider the four areas that typically have the highest risk of ERP budget overrun.

Data Conversion

Very often the most under-quoted part of an ERP implementation.

The challenge with data conversion is two fold – the amount of time that your ERP implementation partner has to spend on data import and reconciliation and the amount of time that your internal resource has to spend on data preparation, testing and data “confirmation”.

It’s never as easy as clicking the button and your data appears in the new ERP system.

Items that influence the ERP budget include

The number of different data sources
Current data formats
How “clean” is existing data
The amount of data to be converted
How well your internal team understand the data formats
What, if any, historical data is being converted.

The process should look something like this:

Decide on the data to be converted (master data, transactional and historical)
Use data templates to upload data into the new system
Export data in text format from existing systems
Perform test uploads
Do user acceptance testing, check the results, reconcile.

How to avoid ERP Budget overrun due to poor data conversion management

Depending on the outcomes of the test uploads you might perform additional testing before your final go live data conversion. If your business uses inventory then a stock take at go live is recommended.

To keep control of the data conversion budget make sure that you spend some time planning the conversion requirements during the scoping process. Allocate sufficient resource to testing.

Reporting

Yes, most modern ERP solutions offer standard reports and the ability to write your own reports but, you can’t underestimate the importance of specifying your reporting requirements and containing the scope and budget associated with report writing.

It is a great shame that so many ERP implementations fall short when it comes to true value add reporting, dashboards and KPIs.

The reason very often is either:

A lack of budget allocation to reporting
Assuming that the standard reports will suffice or
Not specifying your reporting requirements.

Avoiding ERP budget overrun

In summary, when it comes to reporting make sure that you specify your requirements, define the scope, allocate budget and “ring fence” the spending.

Most importantly do not assume that reports will be standard out the box and don’t assume that you can write your own reports.

I will add that most modern ERP solutions are now incorporating better, easier to use report writing tools that have pre-written data flows to allow users to create their own report selections and configurations. This is making life somewhat easier for reporting.

Integrations

Looking to integrate your ERP solution with a third party application?

E-commerce
billing engine
In-house solutions

Integration work can overrun substantially if not correctly scoped and managed.

Avoiding ERP Budget overrun

A well defined scope, careful project management and realistic budget and timing expectations will help.

Work closely with your ERP implementation partner upfront to scope in details all the integrations with third party platforms your new ERP system will have.

Development

Very similar to integration requirements, development work can be a source of major frustration for implementation teams and Project Managers.

Think of the steps involved to complete a development inside the ERP application:

Functional scope
Blueprint
Technical scope
Development
User acceptance testing
User training
Deployment
Go live
Go live assistance
Handover to support.

Development projects should be managed as their own “mini projects” within the broader project framework.

The challenge with regards to development and project overruns is that many development projects are a blank canvas – tell me what you want me to build and I will build it for you. As a result, there is a substantial reliance on getting the scope of works correct.

If not contained within a scope the development team will continue building and developing with no end in sight.

Avoiding ERP Budget overrun

The key to budget containment within a development framework is:

Careful scope (both functional and technical)
Comprehensive project management
Clear communication between client, functional consultants and development team
Realistic budget and timelines.

Conclusion

Technology is improving.

Cloud, mobility, analytics and other technological advancements dictate that customers want more value for money.

Careful management of an ERP project can deliver on time, real value to your business. Plan, co-ordinate and structure your project to manage all aspects of the implementation with specific attention on the data conversion, integration, development and reporting to guarantee an “on budget and on time” implementation.

Have we missed something?

Let us know in the comments below! What are other areas of your ERP implementation project you are particularly considered about to avoid budget overruns?