The Search for the Best ERP Solution Starts at Home
By Michael Delcour
I have recently been innudated with requests from clients in manufacturing that want to upgrade the software they use to run their business. They are looking for a platform that will integrate accounting, payroll, research & development, formulation, project management, etc. Such systems are generically referred to as Enterprise Resource Planning (“ERP”) software. ERP isn’t sexy, but when properly implemented and utilized, it can dramatically improve how a business functions. In my experience, however, such success is usually the exception and not the rule.
There are so many obstacles to choosing a system that works well for any given business. Most businesses that are looking to implement an ERP system have a very specific way of doing whatever it is that they do. These standard operation procedures may be necessary given the business, but they may also be vestiges of the past, rendered impractical given technological innovation. A new ERP system will almost always require changes to be made to a buisness’ standard operating procedures, so the art comes in balancing such changes against customizations to the ERP.
Moreover, all ERP solutions are not created equally. Trusted companies are often sold or acquired, support teams may be based in foreign countries, and salespeople might just be lying to your face. Even worse, because most ERP providers carefully guard their products, it is often difficult to get a real feel for the product before your business has already expended great effort committing to an untested system.
There are plenty of other complications, including how the ERP might integrate with other systems (especially existing accounting software). The overarching problem, however, is not the uncertainty that comes with choosing the software. The biggest problem comes from truly understanding how your own business functions and knowing why the exiting standard operating procedures are in place. Too often, businesses get overwhelmed with the technology aspect of implementing a new ERP without fully understanding how the ERP will change the course of their business. Thus comes the need for true self discovery.
The problem is only amplified when companies hire outside consultants to help with the process (this is usually where I come in). Early on in my career, I was hesitant to push on the business for information and instead tried to rely on myself and my own research. I figured that the reason they hired me was because they needed me to take on the burden of the project and not redistribute it across the business. This is not the way to go.
The most important thing for a consultant like myself to do in these situations is to fully understand the ins and outs of the business that hired me. If I’ve been employed by a widget factory, it is essential that I fully understand everything from the production process to purchasing and the front office. Knowing a particular piece of software is not enough. I need to be able to follow a widget order from the customer’s phone call to shipment and everything in between. Only after I know the process can I even begin to narrow down the pool of ERP suitors.
This is all to say, before I produce anything tangible for a company, I end up spending a great deal of time figuring things out. It can be a hard sell, but it is the only way to do the job right. Once I have that knowledge, I try to break down the standard operating procedures into some sort of chart or map that connects together all of the different pieces of the business. I then create an alternate map that adjusts the standard operating procedures to accommodate the benefits of a new, modern ERP system.
With these charts in hand, I start meeting with software salespeople. I usually ask for any sales meeting to include someone from the development team. There are certain questions that I always ask as a sort of litmus test (Where is your support based? Do you have any other customers in similar industries? How will our employees be trained? What is your annual maintenance fee? What underlying software platform does your product use?). The entire process takes months, and once the contract is finally signed, it can be another year before everything is online; maybe two years before everyone is comfortable.
All of this is to say that for certain businesses, sometimes the best answer after I complete my discovery is “don’t change a thing.” Sometimes newer isn’t better, or at least is not better enough to justify the expense. No ERP should be chosen lightly, and it all begins with a thorough internal discovery of how the business operates.