ERP Archives - Palladium

Key factors to a successful ERP Implementation

As the adage goes, “when you fail to plan, you plan to fail” and this couldn’t be more relevant than when selecting a new ERP solution, regardless of whether you are switching or purchasing for the first time. Critically, this planning is not just related to the implementation process but must also encompass all aspects of the ERP project from selection and implementation right through to the exit strategy.

Most businesses looking to change solutions are either using legacy (end of life) software, are looking for features that their current software doesn’t have or would like to move to a solution that uses more modern technology such as the cloud.

Before embarking on this journey, it is important to fully understand your starting point and the reason why you chose your existing solution in the first place. Understanding past decisions will allow you to evaluate options more effectively. For instance, companies using bespoke software that was developed to meet a very specific business requirement, need to keep this functionality in mind when considering features or the cost of customising existing solutions.

The first step on the road to choosing a new ERP solution should be to first list the non-negotiables or the features that the existing software has that the business is dependent on.

The next step in the planning process is to identify the features, processes and automations that you would like in your new ERP solution. It is a good idea at this point to categorise these into different phases, or even years, as changing ERP solutions isn’t something that you do every year, so you need to take a long-term view when planning. Complex functionality can take more time, to not only develop, but to ensure that it is working in the right way for your business. Consequently, it is recommended that you add minimal complexity at go-live and rather add the more complex processes once the system is up and running. An example of this would be alerts and notifications as, more often than not, businesses that include these at go-live usually decide to switch them off or moderate them post go-live. Choosing instead to make these features a “phase 2” implementation would ensure that they support the non-negotiable processes while also reducing the total cost of the project.

The third step is to identify and evaluate the underlying technologies of the vendors that you are considering.  When choosing an ERP solution, it is important to make sure that the technology is current, and the vendor is constantly developing and evolving the product. This is an area where local is often lekker because choosing a software that is developed in South Africa ensures that it gets updated and maintained more regularly for local legislative changes.

Once you have selected the products that you are interested in, it is important to ask the vendor to conduct an in-depth demonstration that covers all your key requirements in detail. Never accept “yes we can do it” as an answer unless it is in writing. Seeing is believing in this instance.

Choosing a solution is only half of the journey. The next is planning an ERP project with the vendor or the implementation partner. A critical part of this process is the project scoping phase as it details where you are at the moment, key requirements, the system configuration and necessary changes, timelines and expected outcomes. Having a highly detailed scope ensures that there is nothing left to interpretation. Without a proper project scope, you put the project at risk because there are too many unknowns to ensure success. The risk is in what the implementation partner doesn’t know about your business and what you don’t know about the new software. A good rule of thumb is, “if it’s not in the scope document, it wasn’t said”.

From an implementation point of view, it is critical to ensure that there are project owners, both from the company’s as well as from the implementation partner’s point of view, that have an agreed project timeline and easy-to-manage milestones. Having a project owner on the company side will assist in ensuring resources are available when required, reducing the possibility of rework or having to retrain. Once an agreed project plan has been established, it is important that the project owners meet regularly to review the tasks on the plan and manage the critical path to go-live.

The last thing that most businesses overlook in the ERP planning process is the divorce or exit strategy. This relates to two areas, either in changing the implementation partner during the implementation process, or changing the software or partner a few years later because a better alternative becomes available. In the first instance, it is important to have an implementation agreement with clearly defined roles, responsibilities, expectations, and consequences if expectations not be met. For example, your agreement should clearly outline who owns the intellectual property of the configuration and what happens if you change to a different implementation partner. The second exit strategy relates to switching to another solution. These cases are generally quite clear in terms of costs, but most people overlook, particularly with SAAS solutions, how they will retrieve or access their data. In some cases, the data is given to you in some form of data structure which makes migration relatively easy, however, other solutions only provide static reports which will sacrifice your transactional history.

At the end of the day switching systems is not as daunting as you think, provided that you plan it correctly and once you are up and running you will never look back.

Your business may be battling to compete

Common misunderstandings about functionality and affordability of ERP may well be holding your business back, says Stephen Corrigan, MD of Palladium

Imagine competing in a high-stakes chess game, where your opponent has real-time access to strategic insights as the game progresses – guiding them as to which move to make next.

Your chances of staying in the game would be minimal at best.

But, the scary truth is that competing in any business environment without a true ERP solution to aid your progress is even riskier. And the stakes are much, much higher.

Think of it this way – if you sell a product at the wrong price for just six weeks it could sink your business.

What you may not realise though is that the technology to avoid this through real-time business management does exist, and it exists in enterprise resource planning (ERP) solutions that are highly affordable for businesses of any size.

Outdated systems create misperceptions

The problem is that you simply wouldn’t know this, because legacy software providers are still selling outdated and ineffective technology that leaves companies with a completely incorrect perception of what ERP should do and how much it should cost.

Part of the misperception is that as a smaller business you can’t afford a system that manages everything from one place. So you acquire a number of smaller systems which need to be managed manually. You think you can’t afford the bigger, more sophisticated system, but that simply isn’t true.

The cost of software and data is actually coming down every year. With a system like Palladium, for example, the number of features the system provides increases exponentially each year in relation to the cost.

Any business can afford ERP

And your business can get monthly subscriptions to ‘pay as you go’ for ERP. In fact, Palladium hosts software on the cloud, so your company can forego the cost of a server, which has traditionally been a major inhibitor to implementing ERP.

Because ERP systems like Palladium can be deployed on the cloud, they’re also scalable. This means that the system grows with your business, so you don’t have the cost of rolling out a new system when your needs outgrow the current one.

You also may not realise the extent to which ERP can transform your company’s operations and, in turn, even the behaviour of your workforce.

For example, Palladium has developed a feature that helps your business manage cancelled orders. So whenever an order gets cancelled, the system asks for a reason why, enabling you to improve your win rate. And suddenly employees, who have previously been more admin-focused are more sales-focused, because they know their performance is being monitored.

It’s about creating features to change the game

There are an endless number of similar features that Palladium has created to help your business improve its turnover, increase its margins and enhance its operational efficiencies. From auto-prompts that remind the sales team to upsell complementary items to clients, to a function that automatically sends copies of customer invoices with e-mailed statements in order to increase cash flow, these features bring a great deal of common sense and efficiency into the way your business is run.

But, most companies just don’t realise ERP is capable of half these functions, because legacy systems simply haven’t been designed with the goal of improving business operations in mind.

The result is that you may well be doing reactive reporting rather than proactive management. You acquire an accounting software package because your auditor recommends it to you and become trapped in a process of having to try mould your business around the software. What you may not realise is that in this day and age the software should be able to adapt to your business needs – as is the case with modern systems like Palladium.

Switching over is easy

On the other hand, you might already have realised that your business is being held back by outdated software, but you are wary of rectifying the situation because you know the failure rate of switching over to ERP is high.

In truth though, these failures are largely the result of companies handling implementation badly on broad ERP scales. But, with our data conversion and import utilities, it’s easy for systems like Palladium to import  the relevant data.

At the end of the day, the pressures your business faces on a daily basis – from rising cost pressures to growing customer demands – are only going to increase.

To remain relevant, companies big and small need every available tool at their disposal. And so the question is not whether your business can afford to have ERP, but rather whether it can afford not to?