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.

What are lost sales costing your business?

Using technology to manage your company’s order loss rate can have a massive impact on your bottom line, says Stephen Corrigan, MD of Palladium Business Solutions.

If you want to win at business, you need to become obsessed with your losses. It may sound a bit backwards, but consider this: if you could understand your current losses, in other words what your existing clients are not buying from you, your business could easily increase its turnover by between 10 and 20%.

In some ways it’s obvious – it would be extremely difficult to grow your business when you’re not replacing the business that’s constantly eroding. In other words, the opportunity cost of running a business is never about what you’re selling – it’s about what you’re not selling.

So, if you could understand your clients’ behaviour and leverage this knowledge to change the way they interact with your business, you could manage those losses, effectively plugging the holes through which your business is bleeding profit.

Businesses can’t run reactively

Achieving this level of insight is simpler than most businesses think. It stems, for example, from sales managers receiving lists of clients whose sales orders are down this month when compared with the same month the previous year, quarter or month. These lists could also show which specific items are down, so sales managers can see which products their clients are no longer buying. 

Essentially it comes down to running your company proactively rather than reactively – and your ERP system should be helping you do it.

You may be using the wrong software

But, even though these proactive features are actually just common-sense, most businesses simply have no idea that these types of alerts and notifications are easily able to be incorporated into their ERP systems, because they’ve become so conditioned by outdated ERP software.

For example, we all know that as soon as we send a customer a statement, they’re going to request a copy of the invoice.  But, even though cash is the undisputed king of business, there are almost no accounting systems that automatically issue invoices along with the corresponding statements.

You’d think developing a feature like that would be common sense – but it’s simply not.

The truth is that if your business is having to implement manual interventions to access vital information or if you’re having to physically walk around from department to department asking people for updates, or even if you just find yourself duplicating business processes, it’s likely that you’re using the wrong software.

Behaviour-changing technology

Instead, the right software should be able to change behaviours – not just that of your clients, but of your staff as well. And it should do this by providing you or them with pre-emptive alerts and notifications.

Imagine if every time your salespeople were selling a particular item, for example a laptop, they received a prompt about a complimentary laptop bag that they could use to upsell. If similar notifications existed for each and every product your business sells, it could help improve the average order value significantly.

Likewise, think of what it could do for your business if every time a sales order was cancelled, you could understand why – in fact, what if there were reason codes for cancelled orders so that every time a sales order was lost, the system required the person managing that order to provide a reason why.

The difference is in the bottom line

These are kinds of insights that impact the bottom line substantially.

For example, Palladium has a client that processes around 150 orders a day, many of which are delivered by their courier partner. Because of the large volume of items that are couriered every day, the company used to pay for one of the people from the courier to sit in its office, logged into the courier service system, capturing details from orders or invoices to generate waybills.

But, now Palladium has created an integration for the company directly into the courier’s own system. It means that as soon as ‘courier’ is chosen as the method of delivery when a Sales Order or an Invoice is being created, a waybill is automatically generated and sent to the courier when the transaction is recorded.

At the end of the day, an entire resource has been freed up from having to process hundreds of waybills a day, the company no longer has a 5% return rate as a result of incorrect capturing and, even more importantly, there’s no longer a four-hour capture lead-time.

And by eliminating this four-hour lead-time, the company also managed to expedite 50% of its orders one day earlier.

The best part is that this isn’t billion-dollar technology we’re talking about. In fact, once you recoup the cost of those lost sales, you’ll have paid for an ERP system with common-sense features like Palladium several times over.

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