ERP selection; no light matter

Posted on 16 Apr 2014 by Malcolm Wheatley

Think before you act on ERP.

Make the wrong ERP software selection, and it can blow up in your face. You’ll pay too much. It won’t be the right system for your business or the right system for your industry. Or you’ll outgrow it. Maybe you’ll experience all of these issues – maybe even more.

Make the right ERP software selection decision though and ERP can be truly transformative. Especially for smaller and midmarket manufacturers where ERP usually replaces a hotchpotch of spreadsheets, accounting and invoicing systems, and basic sales and works order systems. Processes are streamlined, errors reduced and productivity soars.  Order-to-cash cycles also accelerate. Plus manufacturers move significantly closer to that fabled ‘one version of the truth’ thanks to everything being handled by a single ERP system.

No wonder that manufacturers increasingly see ERP integration as a way of delivering for the back office what lean manufacturing and similar initiatives have delivered for the factory floor. But that vision won’t arrive automatically. Even if the right system is chosen, it’s possible to choose the wrong partner to implement it – a partner without experience of your industry or a partner who lacks the implementation templates and methodologies to reduce risk and enhance the system’s return on investment. Before starting any ERP implementation, manufacturers should ensure they have the right staff resources in place to see the project through to completion.

Culture matters too, more so than many manufacturers realise. Implementing an ERP system is difficult enough without clashes between parties over timescales, mutual responsibilities or objectives. “Pick a partner you can work with” isn’t just sensible advice, it’s a policy that can make the difference between success and failure. But enough scare stories. The fact remains that for every manufacturer for whom an ERP implementation is a journey beset by headwinds, many more find the process to be smooth sailing.

And at the end of that smooth sail, they arrive at a point where a major piece of business functionality is bedding-in and delivering benefits – business functionality that will be vital to the next stage of their corporate evolution.

ERP implementation, in other words, is a journey with potential pitfalls, but one well worth taking, especially in the light that the true cost of ERP, has been decreasing over the last five years. These cost are yet to reach a plateau. As the market continues to mature and ERP vendors continue to vary their offerings, savvy buyers can still expect cost reductions. As ERP solutions continues to migrate to the cloud, it will continue to offer affordable solutions regardless of size of the organisation.

Need more advice? Attend ERP Connect on May 20, 2014 in London. This event brings together top ERP experts all in one room on a single day. Discuss your needs 1-2-1 with the most experienced ERP implementation specialists. Register here.