The cloud has made ERP accessible for businesses of all sizes. But larger firms still have an advantage when it comes to ERP: more resources for implementation.
“The big difference is the amount of resources that we deal with,” says Grant Fraser, ERP industry pioneer and CEO of Navigator Business Solutions. “In the SMB business, having a full-time project manager is unusual. Usually, we're dealing with the controller or someone like that who is trying to implement and also has to do his or her day job. This is different than at a larger company.”
He says that SMBs also typically have less money to invest in ERP systems and implementation.
So how can SMBs deal with this resource scarcity and successfully rollout a new ERP system? Here are six tricks recommended by Navigator.
Trick #1: Pick Cloud ERP
If resources are a problem, pick an ERP system hosted in the cloud. The cloud is built for spending as you go instead of making a big capital investment.
“If you're going to ask an SMB to write a check today for $100,000, they can't do it in most cases,” says Fraser. “But they can send you a check for $10,000 and maybe over two years they can spend $100,000. So, I think cashflow is a key selling point for cloud ERP and the SMB.”
Cloud ERP also helps an SMB allocate more wisely what it does spend.
“Even if an SMB has the resources, we don’t want them to spend $15K or $20K out of a $60K budget on hardware where we could maybe host it for them,” he notes.
Trick #2: Configure, Don’t Customize
Customization is a great way to invest a lot of time and money for little payout. Sure, you get the exact functionality and business processes you want, but these customizations come at a high price in terms of resources. A smarter way is focusing on configuration, because what you need from an ERP system probably already is there in a slightly different form.
“We see this desire for customization with about 25 percent of the implementations we support,” says Ralph Hess, ERP veteran and vice president of sales at Navigator. “But only about 10 percent of those instances require actual customization.”
Trick #3: Choose a Standard Implementation
Here’s the thing: You don’t even need much configuration in most cases.
Reduce the time and money spent on your ERP implementation by choosing an ERP solution that already is configured out of the box with most of the functionality and businesses processes you’ll need. You don’t need to start from scratch with configuration.
“We do what we call ‘standard implementations,’” says Fraser. “What vertical are you in? Ok, we’ve got three flavors you can choose. Pick that and we will implement your ERP that way, with off-the-shelf best practices, and we will get you up and running with roughly 60 percent of the cost and 60 percent of the time.”
Trick #4: Use an Industry-Specific Solution
As Fraser noted, functionality requirements and best practices vary by industry. So beyond using standard processes, you can cut down on the time and resources needed for an ERP implementation by choosing a pre-packaged solution built for your specific industry. This makes ERP implementation almost turnkey, which can save a lot of implementation time for your business.
“Historically, ERP was very customized for specific industries and businesses,” says Hess. “But the cloud model doesn’t encourage that. So, we’ve developed prepackaged industry solutions that are configured for meeting the needs of specific industry verticals with a common digital core built around overall best practices."
With Navigator’s industry solution for pharmaceutical companies, for instance, “they’re getting a product that is FDA validation ready, which is important,” says Hess. “With SAP Business ByDesign plus some of the add-on product enhancements that we add, we provide a ready-to-validate platform.”
Trick #5: Focus on the Basics, Integrate the Rest
Building out the perfect ERP solution for your business is a trap. While rolling out a perfect system that does everything you want natively might sound good, it will require much more time and money during implementation.
A better approach for SMBs with resource scarcity is focusing on the basics during implementation and adding the rest through integration later.
“Our suggestion is to start with a good platform that does business processes in a standard way and is complete unto itself,” says Fraser. “Then, if you need an advanced forecasting system, for instance, integrate that into the system.”
A good rule of thumb is to check if the functionality is part of a daily business process. If so, it should be a part of your main ERP system. If it only is functionality that will get used once or twice per month, stick with a best-of-breed approach and bolt it on later with an integration. This helps limit scope and gets your ERP implementation out the door faster and with less resources.
Trick #6: Make a Solid Needs Assessment Before Implementation
Resource utilization almost always is more efficient with a plan.
The final piece of advice from Navigator when it comes to doing more with less is taking ownership of the ERP implementation project from the start with a solid assessment of your business and its needs.
“Even if we’re an implementation partner, it's not our project: It's the customer's project,” says Hess. “They need to go into a project organized, understanding all their business processes, and having a clear statement of goal and objective for the project.”
A good starting place for this assessment is Navigator’s ERP evaluation worksheet that walks you through the key questions that must be answered before the selection and implementation of an ERP system.
Your business might not have the resources of a Fortune 500 company, but with these six tricks you still can successfully roll out a new ERP system.