Many small and midsize businesses are burdened with obsolete systems they’ve been running for years. Some SMBs with adequate systems for their size and markets may be lagging behind competitors because the system is not adding enough functionality to support their evolving processes.
Selecting and implementing a new ERP system can seem daunting. Many companies have heard horror stories of failed ERP implementations and the drain of time and resources it caused. However, a properly selected and well-planned implementation with an experienced partner is within reach.
Selecting an ERP system
At the outset of researching a new business management system, the first step is to review your current operations and identify what your system does well, and what it doesn’t do well. Once you’ve completed this gap analysis and mapped out your processes, it’s imperative to select a system that meets your needs and is well supported so that it will continue to adapt as your requirements change.
Look for an ERP system that is structured as “units of functionality” that can be operated independently. There are different terms to describe this: modules, editions, or series, for example. Some companies only need financials at first and then add inventory management or customer management (CRM). Regardless, the applications must be fully integrated and operating within the same database structure. Choosing a cloud-based system with modern architecture will help ensure continued product innovation and an intuitive user experience.
Pricing will always be a major consideration, specifically ERP implementation. There is no standardized way to price applications. Some systems are priced by user count, which can be counterproductive because it discourages adding users to the system due to cost. Module or consumption-based pricing does not count users, allowing you to give more people access to the system and thereby get more benefit from it. It’s important to be able to collaborate and coordinate activities within your system (with proper security and access controls) without the extra cost.
Choosing an ERP implementation strategy
Once you’ve gone through the selection process and decided on a system, it’s time for the implementation. Most teams assume a comprehensive “big bang” approach as their go-to strategy, where everyone moves to the new system at once. In many cases, it works well. But implementing everything all at once is not always the best way to go.
In many cases, a phased implementation makes more sense, wherein parts of the new system are put in place initially, then strategically added onto over a reasonable period. This could help alleviate some risk and help spread out the costs and burden on internal staff.
Phased implementation advantages for SMBs
The Phased approach represents a unique advantage for SMBs that have flexibility. They don’t have to deal with the bureaucracy larger companies do, or the vast complexities usually involved in a large-scale and customized implementation plan.
As an agile SMB you can choose to replace existing functionality in the first increment, and then add additional functions later. Or you can implement functionality that is of higher priority first, and follow up with the other capabilities in the second round. In some cases, everything may just begin in accounting and grow from there. We call this "Land and Expand."
Your ERP partner can help you layout the implementation plan that is best for your situation. There is one caveat to remember: not all ERP systems are flexible enough to accommodate a phased implementation. When considering this approach, ask questions during the selection process about how the system, and partner, would handle this.
An ERP choice is a long-term commitment. Talk to existing customers and get a feel for how well the implementation went and whether their needs are being supported after. Find out how seamless it is to add new functionality and if the system is meeting customer expectations. An ERP system is not a simple purchase; it is the beginning of a long-term relationship focused on the success of your company.
Choosing and moving to a modern business management system doesn’t have to be filled with trepidation. Small and medium-sized businesses can spread out the costs and the risk by choosing a phased approach to implementation. Most important is to prioritize the functionality that has the greatest value for your business upfront. This approach is entirely feasible and often advantageous when you select the right system and the right partner.