Switching to ERP: How to Break the Barriers
ERP: what and why?
Digital transformation is growing more important every day, particularly for stockists and wholesalers, and an increasingly significant aspect of digital transformation is Enterprise Resource Planning (ERP). An ERP system centralises a business’ backend processes, allowing them to be monitored and managed in a clear and accessible way. For an in-depth primer on ERP in general, OGL has more information in its What is ERP? whitepaper.[i], This guide will focus on business owners and management teams who want a clearer idea on how to adopt, implement and succeed with ERP in their organisation.
In today’s marketplace, no business can stay competitive unless it keeps up with the digital transformation curve. The Covid pandemic and successive lockdowns accelerated an already rapidly digitalising world. eCommerce has been growing year on year with greater prominence of online spending (expected to reach $7.4 trillion worldwide by 2025)[ii], while businesses are becoming increasingly cloud-based with more workers spending time working from home. Factor in the UK Government’s current investment in businesses choosing to modernise with ERP software[iii], and there has never been a better time for businesses to commit to digitalisation.
Preparing to adopt ERP
Deciding to integrate an ERP solution into a business is not a simple task. No two organisations are alike, so no two organisations will have the same ideal ERP package. Business owners and their operational teams face the burden of planning and implementing an ERP system with very little effective guidance. Scary statistics and horror stories[iv] about the number of times ERP has failed a business may be discouraging and overwhelming.
The difference between success and failure is in the preparation. Planning is crucial, and the key to a successful ERP plan is a thorough understanding of the business, its needs, its processes and how each aspect of the organisation can be represented with data. The more thoroughly you can understand your business through a data-centric lens, the better you can integrate ERP into every layer.
It is necessary to conduct a thorough business overview to itemise and prioritise the organisation’s processes. An ERP system can only be effective when the data it centralises is accurate and the business’ departments are able to respond to needed changes. It’s especially important to develop a thorough knowledge of what is the most valuable data in your organisation.
ERP can be implemented at any stage of a business’ growth, from a freshly founded start-up to the most reputable, long-established organisation. Any stage of growth offers unique challenges to a leader (or founder) faced with implementing an ERP system, but no matter how old or new a business, long-term planning is key. No business plans to stagnate, so any ERP solution must be able to accommodate both vertical and lateral growth. If a business chooses software to simply tackle order management and later expands its scope to include distribution and eCommerce, that business no longer has a comprehensive ERP and must face the expense of replacing it with one fit for purpose.
Examples of success and failure in ERP rollouts all reveal three key factors: planning, commitment and scalability. Examples of ERP implementation failing to meet ROI all demonstrate a lack of planning of; active, committed direction from management or forward-thinking about the scalability of the chosen solution. More modular software solutions like OGL’s Profit4[v] – which can integrate with every aspect of a business without bloat or inefficiency for smaller, more focused businesses – offer the most flexibility and adaptability in the long term.
Do not underestimate the potential of ERP to assist in other aspects of long-term business planning. Disaster recovery plans often rely on accessible, manageable data to be effective. ERP packages consolidate all business-critical data, making it easier to access than ever before..[vi]
The next thing stockist and distribution business owners must consider is their company’s relationship with the cloud, and whether that is likely to change in the future. The key strength of single ERP software is in its centralisation of business processes and management, while cloud-based computing can make it easier to decentralise many business-critical functions. Correspondingly, remote working, eCommerce, cloud data storage and supply-chain services could make it more difficult to connect to in-house ERP software, unless it’s also cloud based.
For organisations that don’t rely on the cloud and already have centralised management, it may be enough to simply select the right software package and integrate it with the business. If your business uses many cloud services, has a more remote working infrastructure or operates with a hybrid of cloud and in-house computing, it may be worth investigating a single integrated ERP, which is delivered as a software as a service. This will offer a holistic view of the business irrespective of the user’s location, support trends like remote working, , while reducing the administration burden as updates and fixes to the software will be provided and managed by the supply.
Expertise, accessibility, and training
If you’ve come this far in your thinking and planning, you should now have a thorough understanding of your organisation’s current and future needs as well as its underlying infrastructure – but overlooking your staff, their capabilities and their limitations when integrating new ERP could be a costly error. Your plan must account for who will be interfacing with the ERP system, whether that includes ground-level staff, department heads or executives alone. If effective use of the new software will require new skills or orientation, then the implementation plan must account for staff training.
Rollout and maintenance of ERP software might require specialist skills depending on the complexity of the business, but a good solution will be easy to use at the endpoints with customised training to ensure full understanding of the myriad of use cases and options. Employees will then understand that a good software package can automate data input and integrate seamlessly with the running of the business. and increase productivity.
Embracing digital transformation
ERP will allow a business to stay ahead of the digital transformation curve, but business owners and operational management teams need to consider their current level of digital transformation when switching to ERP systems. Even the most flexible, cutting-edge ERP solution won’t be able to integrate with an organisation that is lagging too far behind technology.
If your business is being left behind in the digital marketplace, ERP enables you to not just catch up with the competition, but to stay ahead of the curve for years to come. However, this requires a degree of brutal self-honesty and a willingness to commit to fully digitally transforming the business. It may seem like a prohibitive hurdle, but businesses can no longer afford to sit on the digital fence.[vii] For more information on digital transformation, look at OGL’s guide for wholesalers.[viii]
How to move forward
At this point, you should have a clear concept of what your business stands to gain from ERP, the challenges and opportunities you’ll face during implementation and how the ideal ERP solution will integrate with your business processes and staff. The final hurdle is choosing the right partner. The right software package is important, but do not neglect the reputation and level of support offered by the provider.
You must have absolute trust that your ERP partner will provide quality in both product and service. Look for customer testimonials and success stories, such as OGL’s partnership with Anderson Electrical[ix], and see if you can get in touch with the vendor’s partners directly. Any service provider who is cagey about their clients’ experiences should be seen as a red flag.
The provider’s support teams are essential for continued, reliable success. If a vendor provides the software package and does not provide adequate support, this can lead to crippling problems in the future when the business needs support, troubleshooting or assistance. It is vital to choose a provider that takes a responsive, proactive approach to enabling your organisation to get the most from their ERP solution. OGL provided both the Profit4 system and adaptable training to Broadbent Welding & Industrial Supplies[x], with responsive ongoing support.