Enterprise Resource Planning (ERP) is a type of software that organisations use to manage and integrate the core aspects of their business, such as finance and accounting, HR and supply chain management. Carrie Tallett, Senior Product Manager at Forterro’s Orderwise, explains how ERP is not just for the larger businesses and explains how companies starting out on their ERP journey can make the most of this technology.
Enterprise Resource Planning (ERP) technology has been around for decades. Because it contains the word ‘enterprise’, some people tend to associate it with much bigger, global organisations.
It’s undoubtedly true that an overwhelming majority of the world’s biggest businesses use ERP. However, it’s also true that smaller companies can use it just as productively and effectively and see the same benefits in terms of growth and efficiency. My company specialises in the industrial midmarket, so I see every day how ERP can be transformative for organisations that size and in that sector.
But for companies starting out on their ERP journey, it can feel daunting. Can they justify the outlay? Will their ERP system demonstrate ROI? How will it impact the business overall?
What exactly is ERP?
ERP isn’t regarded as the most glamorous or exciting tech. It doesn’t have the buzz and currency of AI, and it is hard (though not impossible) to directly connect it with turnover and profitability. Despite this, it can be one of the most impactful technologies a midsized company can deploy.
ERP can automate almost every area of operations, help maintain and improve customer service levels and make it easy to get greater value from a business’s data. It also plays a significant part in Digital Transformation, which itself is vital to business growth.
It makes an organisation more efficient, more agile and more effective. It can help increase productivity and allows a company to make smarter and data-informed decisions. Realising these benefits starts with choosing the right ERP solution at the outset.
Specialist solutions
There are many ERP solutions for a midmarket company to choose from. Some of these solutions are made by some of the biggest companies in the world and have an undoubted appeal because of that. Yet, just because a provider is familiar does not mean it’s the best choice for your business.
There is less value to be found in a general, one-size-fits-all option when compared to a platform that has been iteratively improved over decades, all by taking onboard feedback from customers from your sector and that are a similar size. In a wholesale business, for example, specialised software can focus on the unique challenges of managing the stock journey, amongst many other operational aspects. Furthermore, general ERP solutions can lack industry-specific functionality, highlighting the importance of a partner who operates within your industry.
Cloud ERP vs on-premises ERP
Then there’s the question of cloud or on-premises ERP. Although strong on-prem solutions are still available, any forward-thinking organisation should select cloud ERP or at least a hybrid solution.
Anyone thinking about cloud ERP should focus on a provider that uses AWS. There are other options, of course, but using AWS means all the benefits of AWS innovation, infrastructure knowledge, scalability and best practices can be passed on to customers.
Potential users should always work through a list of questions to the provider. What’s the quality of the cloud? How will migration work, and how best to handle the legacy systems? How do you transition from your old system to the new system? What data do you want to retrieve and for what purpose? The latter should always be the data that’s absolutely core to the business – employees, means of production, IP (how products are made, who are your suppliers and customers) and all financial data.
It’s also important to avoid running before you can walk with this. If your business has been primarily analogue to this point, then a phased approach to ERP implementation is best. This allows gradual adaptation and integration, minimising disruption and allowing users to become accustomed to it.
Change is good – make that clear and tangible
For any SME to get the most from an ERP system, it must be fully integrated into their day-to-day operations and workflows. It must also connect with other technologies used in the business. This requires thorough planning and understanding of the business needs, with system integration carried out in partnership with the ERP provider.
From here, the focus should turn to change management. People can be nervous about new technologies, and ERP is no exception. Change management is, therefore, crucial for maximising the value of ERP. Engaging with employees, reassuring them and addressing their concerns helps gain their support. Providing initial and refresher training for users is also essential, ensuring they are ready from day one and can pave the way for success.
Furthermore, identifying and celebrating small wins early in the process can build momentum and demonstrate the new system’s benefits, especially if people had been initially sceptical.
Change should also be applied to the ERP solution itself. Continuous development and improvement of an ERP system ensure it remains relevant and beneficial as the business evolves. Furthermore, implementing a fully scalable ERP system – especially one in the cloud – the business can grow without being constrained by outdated and legacy processes.
Tie ERP into broader Digital Transformation
Some midmarket companies have approached Digital Transformation tentatively. But embracing digital technologies – and ERP solutions especially – can be transformative and a significant contributor to sustained growth.
Switching to more digital operations can be a major step. It makes a business leaner and more efficient, and automating manual processes frees up staff time to be better spent elsewhere. It also eliminates the potential for human error to impact the business negatively.
Aligning ERP with Digital Transformation not only means companies can get more from their ERP but also helps advance the transformation programmes. This impacts the entire business, including growth, which is essential for any SME.
Given the importance of growth and the challenging business environment in which many midmarket firms find themselves, ERP can be a significant technology. It increases efficiency, improves productivity and powers Digital Transformation. Ensure that your organisation gets the most from its investment in an ERP system and unlocks the full benefits that this technology can offer.
