Stick or Twist: Making the right ERP decisions

IT leaders considering whether to replace, upgrade or deploy an ERP system are faced with a barrage of decisions and internal objections. Coeus Consulting’s ERP experts provide their independent advice on how to move forward.

All companies encompass processes that would come under the umbrella scope of ERP (Enterprise Resource Planning), whether these are HR, CRM, finance, manufacturing, stock control, logistics etc. The key question is how these processes are facilitated within the company and how the underlying information is stored, managed and shared. 

Critically, every organisation is different, which is why there is no ‘catch all’ guide to choosing an ERP system, or even the decision whether to deploy one. The fundamental differentiator between successful ERP initiatives and those which fail is knowing where to adopt the best practices built into the ERP and where there is value in developing bespoke options.  

For companies that have made adoption of an ERP system a central part of their IT strategy, experience shows that early ERP systems presented the challenge that they were typically monolithic suites that worked in isolation and required expensive & complex customisations, which slowed - or even prevented - the adoption of new technology, upgrades or process optimisation. 

Today’s ERP software, however, is different in that it brings multiple processes to the table and presents them in a fluid, interconnected ecosystem. This offers not only data connectivity within systems but also with productivity tools, e-commerce and even customer engagement solutions. In this way, they help businesses connect data for better insights, driving the optimisation of processes across the business. 

The factors causing the need for evaluating a new or upgraded ERP system can be varied. Divestments, mergers, changing business environments, organisational changes, or even software vendors themselves declaring that they plan to cease support at a certain date in the future - all creating an environment where a business needs to review how IT supports the efficient delivery of processes. 

There are three areas to consider regarding decisions and barriers to ERP deployment or change.

Business Strategy, Requirements & Processes

ERP encompasses multiple critical business processes. Whether these are HR, CRM, finance, manufacturing, stock control, logistics, etc. The key question is how these processes are facilitated within the company and how the underlying information is stored, managed and shared. 

Critically, every organisation is different. This is why there is no ‘catch all’ guide to choosing an ERP system, or even the decision whether to deploy one.  

The fundamental differentiator between successful and failed ERP initiatives. Is knowing where to adopt the best practices built into the ERP and where there is value in developing bespoke options.

IT strategy

ERP systems presented the challenge that they were typically monolithic suites that that worked separately. This required expensive, complex, and customised code which slowed - or even prevented - the adoption of new technology, upgrades, or process optimisation.

Today’s ERP software brings multiple processes to the table and together in one fluid interconnected ecosystem. These newer offerings not only provide data connectivity within systems but also with productivity tools, e-commerce, and even customer engagement solutions

Thus, helping help businesses leverage data for better insights, driving the optimisation of processes across the enterprise.

Optimising business performance​

Solutions should provide insights that enhance decision making and reveal ways to improve operational performance going forward. Solutions should also support the possibility of integrating emerging technologies such as AI for faster decision making.​

By connecting processes and data, employees will have more visibility and flexibility to help them take action quickly and deliver more value across the business. ​

Whatever is implemented needs to adapt to business needs, helping the business proactively prepare for -and readily respond to - any operational disruption or market change. Indeed, if nothing else, the past two years have demonstrated that those companies with nimble and agile systems have been the ones who could most easily adapt to, and benefit from, the social and commercial landscape disruption.

Fears of change

Perhaps the most important aspect to address in the early stages of any conversation is how to address any barriers to adoption. 

Despite, or sometimes because of, all the options out there, companies can be hesitant about choosing, implementing or replacing an ERP solution. There are many reasons why, but where there’s fear or resistance to this, there’s also a solution.

Choosing the right ERP solution is tricky in a crowded field. Choices include SAP, Oracle, Infor, Dynamics, Sage, Workday, and Syspro, but the list is quite exhaustive these days. It is important to also understand that change doesn’t have to be an all or nothing implementation proposition. Software solution modules can now be purchased and deployed separately based on business need. Any future ERP solution should work within the current landscape, but also include the features that can help in future growth and evolution.

Right sizing the project

Once the barriers to the possibility of change have been overcome, the next steps are to look at how any new system will serve the business. This should drive a number of decisions that will underpin the architecture definition and future system deployment.

Right-sizing the project will encompass some key decision points, summarised on the next slide.

It is important to consider Cloud options both from an Infrastructure or Application perspective. Traditional factors such as the functional requirements and cost are nowadays less of a differentiator, so ultimately the approach will be influenced largely by the business growth plans, access to reliable connectivity and the business’s view on flexibility and scalability.

The prime aim of an ERP system is to facilitate significant automation of regular processes and cut down on manual processes.  An industry-focused solution may closely match the needs of one department, but it may not always enable end-to-end processes that span multiple departments.    

Enterprise solutions, on the other hand, are usually already well integrated but can come at a cost in terms of functionality for certain departments that have very industry specific processing requirements, even if the provider has a specific module, standard model or configuration for the appropriate industry sector.

Therefore, when considering software vendors, it is important to spend time drawing up requirements specifications to make sure all needs are covered (both functional and non-functional). 

The value of being clear on what the business needs are right at the beginning pays dividends throughout any potential implementation, but most notably when selecting the vendor, product(s) and systems integrator(s).

Right sizing effectively needs you to answer four key questions.

1. Cloud or on-premise?

• Both work, what’s best for the business? 
• SaaS is attractive to many businesses for several reasons:
• It is managed directly by the vendor, housed in a vendor managed data centre, which makes it highly secure and more robust than most organisations can achieve.
• Upgrades to the latest versions and patches are performed with little or no input from end-users
• Systems are automatically backed up by the vendor with up-time often guaranteed
• SaaS encourages reduced data structures, making ‘any time – anywhere’ use easier
• Non-functional considerations such as Security, high-availability

2. Enterprise or line of business

• One-size fits all, or ecosystem of specialist Apps?
• Integration and inter-connectivity for launch and ongoing maintenance
• Use of ‘Software as a Service’ (SaaS) can also balance the need for in-house support teams or expertise.
• Monolithic systems not always ‘best-fit’ for all departments.

3. Which software?

• Drive by business requirements, not technology.
• Weight to functional and non-functional requirements
• Top down; avoid the sales-pitch
• Standard questions that the team should look to answer:
• Do they have a focus and template for your industry sector?
• How many customers do they have?
• What is their financial position?
• What is the focus on R&D?
• Is the product end of life?
• What are the support options?
• Is their model a true cloud or a hosted solution?

4. Evaluate and purchase for the project

• Right-size; are you a trophy client who can affect product development?
• Are you looking for a solution provider or software vendor?
• Different partners for different stages of the project
• Pricing; subscription, consumption, or in-perpetuity? 
• What happens to your existing licence assets?

Conclusion

Sourcing and deploying the right ERP solution, or combination of solutions, is critical to taking business process management to the next level. Getting the decision wrong or failing to deploy can have an enormous impact on the business as well as the people. Working with an expert partner that has extensive experience managing ERP implementations can greatly reduce risk and enhance the end-result.

A good ERP implementation partner will:

• Understand the industry & sector, as well as the various software solutions
• Keep focus on your project goals
• Address the fear of change in your organisation
• Communicate with familiar, clear language

Focus on getting the right team together, the correct level of executive sponsorship, the right partners with the right experience.  Don’t overlook the importance of investing in training and change management, as well as open and frequent communication.

And finally, remember that deploying an ERP system is not a one-off activity, or cost - or one with immediate business benefit.  

Deploying and managing ERP is a journey that needs to adapt as the business evolves. A journey that involves constantly assessing and developing the way the solution works for the organisation.