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What is ERP Implementation, and Is Your Business Ready?

Many organizations find themselves wanting ERP implementation, but what does that mean and what makes a business ready for ERP?

Enterprise resource planning (ERP) software is quickly becoming a question of when, not if, for many SMBs, but knowing you need ERP and implementing ERP solutions are two different things.

The key component of an ERP is a centralized database, offering many differing business activities—such as accounting, project management, and supply chain operations among others—the ability to utilize one single database as opposed to multiple systems with little or no communication.

Previously considered a tool for larger businesses, ERPs are now readily available options for SMBs—from easily-implementable turnkey solutions to custom systems tailored for specific business needs.

ERPs offer excellent opportunities to automate key business processes and streamline flows and functions into a unified and cohesive system

The market for ERPs among SMBs is bigger than ever, and they have grown to collectively become enormous investors in the industry, particularly cloud-based ERPs.

Global Cloud ERP Market Projected Size in USD (2021 - 2028)

 

The Global Cloud ERP market went from 18,523.50 USD Million in 2021 to a projected value of 47,760.01 USD Million by 2028.

It is no wonder that businesses of all sizes are looking to improve their digital capabilities and implement these systems.

Related Blog: Modern ERP Vs. Legacy Systems: Comparison Guide

There are several factors to consider before moving forward with a strategy for ERP implementation.

At Impact we help businesses of all sizes, giving them expert advice and consultation about the type of ERP system that is right for them.

Here’s our top tips for choosing the right ERP for you and your business.

Do You Have the Right Foundation for ERP Implementation?

Many Businesses Leap Into Adopting New Systems Without the Necessary Auditing

An ERP system can help a business dramatically improve its processes in the workplace and remain competitive, but it’s a journey that must be taken with important considerations. It’s worth assessing any current systems you may be using and whether you want to integrate them with the new system or replace them with new modules.

Since you are incorporating your business practices into one streamlined process, it’s important that you consider the potential to merge your existing legacy systems into the ERP—or replace it altogether with a component of the new ERP.

For example, it is common practice for businesses to integrate existing CRM systems (or other systems) into new ERP solutions, with the ERP functioning as a backbone for collectively bringing systems together under one umbrella.

An estimated 95% of businesses report improvements in their processes after ERP implementation.

It is strongly recommended that you have an expert properly assess the viability of integrating any legacy systems before you proceed.

You may find that integrating your current processes into a new ERP is the best and most efficient way forward.

Conversely, it can be expensive to maintain old processes and you might decide that the best decision is to start afresh with the ERP acting as a turnkey solution to your DX plan.

Is Your ERP Implementation Partner an Expert in the Field?

Having a Partner With the Necessary Expertise Can Be Crucial When Making Big Changes

Implementing ERP solutions can be a daunting task for any SMB. Getting the right managed service provider (MSP) to assess and work with during the entire process can be a challenge in itself.

Ask any potential partners for references from their previous dealings.

Consider asking if they:

  • Have a track record with former and existing clients in delivering ERP projects
  • Are properly certified by relevant vendors to be implementing ERP solutions

Be sure to have a partner who can perform a satisfactory and comprehensive assessment of your workplace and processes.

Many MSPs will offer a free assessment, but consider the quality you will receive.

Related Video: ERP Demo for Managers

If you’re serious about developing a strategy of transformation for your business, it’s worth it to pay a premium for an assessment of your organization that leaves no stone upturned.

Remember, this isn’t a quick fix; this is the beginning of a long-term strategy of digitization for many years to come.

Secondly, it’s a good idea to be sure that the company you choose to work with is comfortable installing the system you want to implement:

  1. Do they specialize in the software you need for your business?
  2. Are they able to provide you with a service that is suited to your automation and process needs?
  3. Finally, are they able to offer you a long-term support strategy for your new system at a reasonable cost?

The ERP implementation process is often a long one, and you need the right people working with you to see out the project from beginning to end.

Some MSPs, like Impact, offer round-the-clock support for your IT needs, giving you peace of mind so if anything goes wrong—at any time—you can rely on a support team to fix any issues.

Keeping an eye on what support you’re going to get is an extremely important factor you should think about—it’s no good having a partner if you can’t utilize their expertise when you need to.

In addition, you don’t want to go over budget, so having a partner who can give you an honest roadmap for future maintenance costs is an important consideration for you to make.

What Customization Options Do You Need to Explore?

Is the Provided Technology Compatible with Your Business’s Needs?

One of the most important benefits of introducing an ERP system to your workplace is the ability to customize it specifically to your individual needs.

There are different ERP configurations for different businesses—often because of industry or regulatory needs—meaning that it’s simple for businesses to fall into the trap of installing a system that is not appropriate for their needs.

Your business mission should be taken into account for each stage of ERP implementation. Assessment, planning, designing, testing, and using an ERP should account for your resources, workforce size, and goals.

Make sure that you are clear in your aims regarding what kind of system you want and the modules necessary for your operations.

Do you want to have a particular existing legacy system integrated? Or do you want a clean slate off-the-shelf approach?

Having a highly-configured ERP can prompt new challenges for you to face and rising costs, while adopting a new ERP and its modules in their entirety will cost less but give you fewer options in tailoring the system.

Finally, be sure that the ERP you want to implement is open to expansion.

Businesses often find that they want the opportunity to increase the capability and add new modules to the ERP further down the line when needed.

In other words, if you want to integrate a new financial accounts module in the future; check with your partner the options available to you for upgrading your system.

ERP Market Growth(2022 –2028)

What’s the True Cost of Your ERP Implementation?

Understanding the Costs Through Every Stage of the Process Is Vital

The reduced cost of cloud ERPs over the course of the 2010s, and particularly the last five years, has meant wide-scale investment and adoption by SMBs in virtually every industry

As we briefly touched on, implementing ERP solutions can often be an expensive endeavor and a large investment for many SMBs.

Understanding the costs through the installation, integration, and maintenance phases is important.

Estimates indicate that 65% of ERP implementations go over budget and a significant amount have issues on their first try, in addition to lengthy installations.

Have a realistic roadmap with achievable goals for your project when planning a strategy for it.

Costs vary drastically from business to business—from the price of an initial audit, to the implementation, and finally the monthly maintenance fee.

If you’re opting for a highly customized ERP, you can expect the price to be higher than a standardized vanilla system.

Licenses have to be current and up to date and your vendor will be able to give you information on whether the renewal of the licenses and what model—company-wide or individual—is the best option for your business.

Relayed Blog: How a Cloud Retail ERP Use Can Give You a Competitive Advantage

Bottom Line

Implementing ERP solutions is a tricky but necessary objective for modern businesses.

Many who try often end up dissatisfied on their first attempt, usually as a result of poor preparation and unrealistic expectations.

Give yourself the best possible shot at success by taking the right approach by getting the expert consultation necessary for beginning the process and gaining an understanding of what you need for your use case.

ERPs are very customizable, so the option is always available for you to tailor it to your needs without spending on modules you don’t need.

Are your expectations and budget realistic?

A good partner should be able to provide you with a reliable roadmap for your business’s ERP implementation and a solid budgeting plan.

There will be fewer bumps in the road if you have the right people helping you through the process.

Unify your company’s data and increase efficiency with ERP technology. Read our free eBook, Introduction to Enterprise Resource Planning (ERP), to get a better understanding of what ERP is and why it its useful for businesses. Business leaders will learn how they can leverage their data and use it to make better business decisions.