Professional services companies are dynamic businesses because they are built around people and rely on a roster of diverse clients that change over time and have evolving needs.
Managing a professional services business can be tricky, especially as it grows beyond its founder and a handful of consultants. That’s why many professional services firms use an enterprise resource planning solution on the backend for management and visibility.
ERP is end-to-end business software that serves as the nerve center for a business. It centralizes all data within an organization, provides a common interface, and enables a higher degree of analytics, automation, and standardization for heightened efficiency.
With ERP, professional services businesses can improve billable hours, reduce revenue leaks, minimize data entry errors, cut down on manual processes, and improve overall productivity.
But how to choose the right ERP system for the business? Because ERP has become standard software for all but the smallest businesses, there is a wide and bewildering array of ERP offerings on the market today.
With that in mind, here are five criteria that professional services firms should consider when making an ERP system selection.
Look for a Small Business Offering
Your professional services firm might not seem small, but the definition of an ERP for small-to-medium-sized businesses is bigger than you might realize.
That’s because while ERP makes sense for businesses with a handful of employees and revenue of more than $1 million per year, it also is used by multinationals and just about every firm on the Fortune 500.
When it comes to ERP, small business solutions are those that serve companies that typically bring in revenue between $1 million and $300 million annually. If your business is earning more than that, disregard this advice. But probably you’ll be looking for an SMB offering when it comes to ERP.
Rely on an Industry Heavyweight
There are many companies that make ERP software, but there are only a few that serve most of the market.
That’s because ERP software is complex and comprehensive, and as a result, changing solutions is a lot harder with ERP than it is with other types of software. The vendor you choose for your ERP backend will be supporting your company for a long time, so there’s added incentive to go with a major ERP company with a long history of understanding and supporting its products.
This focus on the major players means that your shortlist should focus on SAP, Oracle, and Netsuite when it comes to ERP, basically. There are other well-established niche players, but you won’t go wrong by focusing on one of the big three above.
Consider the Support Community
ERP makers all support their products, but you’ll probably want a third-party implementation partner for advice and help to configure your solution for your specific business during rollout. You also might need help with maintenance and adding additional functionality as you grow, adjusting the system for new processes that grow over time, and custom functionality development if you have a need that is not served natively by the product.
All of these needs rely on the support community that has grown around the ERP solution. So when you’re selecting your ERP system, pay attention to the size and reputation of the entire ecosystem built around the ERP offering, not just what is offered by the solution vendor itself. This support community matters more for ERP than it does for most other classes of software, and the closest equivalent of this need for community might be website software (which is one big reason why WordPress is so popular today)
Focus on a Configurable System
ERP software can be made to do just about anything, and it serves a wide variety of business needs. That’s one reason why ERP customization has a long history. When businesses need something that is not included by default, they often build it themselves.
Avoid this way of thinking, however. Custom development adds cost and complexity—and it moves a business away from industry best practices. Instead, look for systems that are built around configuration options.
ERP solutions that rely on configuration instead of customization and plugins help professional services businesses reduce implementation time and ongoing maintenance. Highly configurable ERP solutions also enable professional services firms to more easily add extra functionality later as they grow or evolve.
Prioritize Industry Solutions
When evaluating ERP offerings, look for solutions that are tailored specifically for professional services businesses.
This does not mean that the ERP solution will be built from the ground up for your industry because few industries outside manufacturing have purpose-built ERP solutions from major vendors. There’s just no need.
What is helpful and needed, however, are prepackaged industry solutions that take a major ERP system and pre-configure it for the needs and best practices of a given industry. A prepackaged industry solution comes ready for the needs of a typical professional services business and thus requires only light adjustment and setup before rollout. This cuts costs, improves rollout time, and ensures that the ERP solution is ready to meet most of the needs of your business from Day One.
Are There Prepackaged Industry Solutions for Professional Services Businesses?
Yes there are, and we’ve developed one of them.
Navigator’s prepackaged industry solution for professional services companies takes SAP’s Business ByDesign ERP for small and fast-growing companies and makes it a turnkey solution tailored for professional services firms. With Business ByDesign, professional services businesses get a ready-to-use ERP that’s made by a major ERP vendor, has a vibrant support community, is highly configurable, and is already tailored to the needs of professional services businesses.
Learn more about our ERP-prepackaged industry solution for professional services companies.