Understand Why You Need an ERP System

Ask yourself a few different questions:

Do you need an ERP system?

Maybe you are a growing company or a startup. Do you really need potentially expensive software?  The answer – if you want to grow and stay competitive – is YES!

Gone are the days where you could get by with the number one ERP system in the world (Excel).  It is true that many businesses still use Excel as their enterprise software. Often, these companies lose significant business to competition who have upgraded to current solutions.

If you want your business to slowly leak profits and not have the ability to make real-time decisions based on hard data, then you can stop reading here. You won’t hurt our feelings . . . you’ll just hurt your long-term bottom line.

Do you need a new ERP system?

We see it all the time – companies still using green screen (dumb) terminals with dreadfully slow loading times and inaccurate data. These companies have frustrated sales reps and employees, no ability to be mobile, ERP security issues, upgrade constraints because of customizations and worst of all, no support from the company that made the system in the first place. The list goes on.  If you experience any of this, you are a prime candidate for a new system that can help your business grow and compete in today’s market.

After answering these questions, the first phase of an ERP software selection project is your planning phase.

During this time, you’ll be building an ERP project team and developing an ERP project plan. Most importantly, you’ll be building a business case and achieving organizational alignment. To do this effectively you should have someone on your team with extensive ERP implementation experience. This can be an internal or external resource.

There are hundreds, if not thousands, of ERP systems out there so having someone in your corner that is vendor-neutral is crucial. Everyone knows about the big guys (SAP, Microsoft, Oracle, Infor etc.), but knowledge about various ERP vendors’ strengths and weaknessess typically doesn’t come from a single person. The basic message here is this: have unbiased expertise on your team!

Organizational Alignment

Organization alignment starts with and requires agreement around terminology and vision.

Chances are, many people in your organization will not know the basics of ERP. It isn’t like ERP is a software that a typical person uses on a daily basis, like social media. Think about it – when was the last time you were excited to check your phone to see if you have increased profit margins?

One of the fastest ways to educate your team about ERP is to give them some material that may answer their questions. Give them a basic overview and direct them to the following blog post, which answers common questions, such as “What is an ERP system?”

Business Case

A business case can do a few things. It can help you achieve alignment, and help you show that a new ERP software is needed.  This is vitally important when approaching decision makers and asking for the green light.

When building a business case, be sure to define how new technology will help you achieve your organizational goals. Your business case should answer the following questions:

  • Will a new ERP eliminate silos and integrate disparate enterprise systems?
  • Will a new ERP improve the customer experience?
  • Will a new ERP improve employee and operational efficiency?
  • Will a new ERP enable real-time data, allowing for better decision making from leadership?
  • Will a new ERP make it easier to conform to potential or existing regulatory compliance?

and the big one…

  • Will a new ERP system help achieve long term organizational goals and improve the bottom line?

Many organizations invest in enterprise software simply because other organizations are doing so. While keeping up with the competition is smart, you need to understand the specific ways ERP will change the way your business operates and how ERP will help you stay competitive. Executives will be more likely to invest in a new ERP solution if they understand the benefits and return on investment.

Outlining expected ERP business benefits will also help you achieve employee buy-in for the ERP evaluation process and beyond. You’ll need resources to help with ERP vendor selection so soliciting buy-in and making managers and employees part of the solution is essential.

Managers need to understand how the new ERP system benefits the organization if they are going to allow team members to dedicate several months to the ERP system selection process. Likewise, team members need to understand how a new system can make their everyday lives easier. You will always have a few naysayers – that is expected with any change in technology or in processes. By converting these individuals to proponents of a new system using organizational change strategies, they can easily become your strongest allies in an ERP project.