ERP is the backbone of your business. Here are the key considerations when selecting and implementing an ERP system.
At the centre of your business where People, Process, Data and Technology meet are your systems. Larger businesses will have an Enterprise Resource Planning (ERP) system, but they are not always necessary. So the first question is “Do I actually need an ERP system?”. Assuming the answer to that is “Yes”, what are the key things to consider when selecting and implementing an ERP system?
A Concise Introduction to Integration Problems Part II: How to Solve Them
(This is the second of our two-part series on integration problems. Click to read Part I: How to Spot Them.)
So, you have identified that your company has integration problems. Morale is affected, reporting is overly complicated, you can’t plan for the future, and customer service is suffering. So, what can you do about it?
Look Before You Leap
When looking to fix integration problems, you have a spectrum of options: at one end is a long series of fixes to individual issues; at the other end is a major, transformational project.
Either way, strategize first! Before you do anything, your Board should consider these questions:
What is your ambition for growth? Meaning, how much do you intend to grow and change the business in the coming years? Do you need a platform for growth and acquisition, or can you continue to cope?
What resources are available? Are you prepared to invest significant resources in projects, or would you rather tackle problems piecemeal?
How serious are the problems? How much are they really affecting — or in danger of affecting — the business?
Is there a major opportunity to reinvent your business, or just an opportunity to remove some irritations?
Be aware that this discussion can reveal personal tensions in your organization. In most cases, when systems aren’t integrated, it means that departments aren’t communicating with each other — so this kind of discussion can be quite stormy, as departments may blame each other for your company’s struggles.
Avoid the blame-game. Aim for a dispassionate acceptance of the current realities and the need for change. Then figure out who will have ownership of the solution.
Putting Together Your Integration Dream Team
You need focus to solve integration problems. So, start with a competent team that has resources and authority. Appoint a Director to be accountable and give them a twelve-week timeframe within which solving integration problems is their priority.
Why twelve weeks? Because the time period needs to be long enough to actually make a difference, but short enough that business-as-usual issues can wait, so this project can genuinely be a priority.
The initial focus should be on creating a list of issues with (a) estimates of the three-year business impact of each, and (b) an assessment of how readily solvable the problem. From this list you can select, say, the top three or four problems with a commitment to solve or substantially reduce them in twelve weeks.
How to Take Small Steps Forward
Remember that integration solutions are on the spectrum between individual fixes and a big, transformational project. It may be tempting to think big — but it may not be necessary! For each issue, consider the following:
Can processes be changed to eliminate the problem? Perhaps small process and system amendments can streamline activities.
Are personnel issues contributing? You may need to improve your training programs or take a hard look at incentives (e.g. sales commissions) that influence behaviour. Are there individuals whose roles need to be changed?
If workarounds are necessary, can they be automated? For example, using Excel macros or templates, small bespoke programs, or other data processing or reporting tools.
Are there incompatible or obsolete technologies that must be upgraded or replaced?
More Serious Redesign Projects
If it turns out that more serious redesigns are necessary, you’ll need an even more strategic approach. Go back to the beginning and consider how to reorganize your business to suit the needs of your customers. For example, automate manual activities wherever possible, unless it makes commercial sense or provides enhanced service that your customers value.
Then start thinking through the main processes, key performance indicators, and options for back-end systems. (Naturally, if you reduce the number of back-end systems, there will be fewer technical integrations, so there should be fewer sources of potential problems.)
A word of warning: some vendors market their solutions as a single brand, when, under the bonnet, they actually provide multiple products which are not fully integrated. So, one “product” may actually be composed of many partly integrated pieces of software.
The solution may then lie in Enterprise Resource Planning (ERP). Basically, ERP takes all of the core processes you need to run your company — finance, HR, manufacturing, supply chain, services, procurement, and others — and integrates them into a single system.
The goal is to provide all the separate aspects of your business with the same information in real-time. And the result can a huge springboard to scalability and growth.
For more posts on ERP and Integration issues, visit our Knowledge Center.
ERP Explained: The Basics
At Freeman Clarke, clients frequently ask for our help with their Enterprise Resource Planning (ERP) projects. We’re not surprised, because ERP projects can take mid-sized businesses to an entirely new level. But they’re also notoriously difficult. ERP projects can be ruinously expensive — it’s often said that 75% of them fail.
With this in mind, in the coming weeks we’ll be developing our ERP Knowledge Center. It will provide a comprehensive introduction to ERP systems, how best to implement an ERP project, and how to avoid the common mistakes that lead to expensive and frustrating ERP failures.
But let’s start with the essentials.
What is ERP?
Consider all the core processes you need to run your company: finance, HR, manufacturing, supply chain, services, procurement, and others. The most basic function of ERP is to integrate all these processes into a single system. The result is that all these separate parts of your business have access to the same information in real-time.
But new ERP systems are anything but basic. They use the latest technologies such as machine learning and AI to provide information, visibility, and efficiency across every aspect of a business. And the promised integration may not materialize if the system is not implemented correctly.
Initially these products were targeted at the manufacturing sector. But they have generalized their offers to cater to every kind of business in every sector.
What are the advantages?
There are too many advantages of a well-executed ERP system to list in one blog post! But we can say that the advantages break down into four main categories:
Reporting. In the past, to generate reports, many companies had to manually merge data from multiple systems. (Many companies still operate this way!) ERP automates reporting and provides updates in real-time.
Risk Management and Compliance. Each sector has its own regulatory ERP systems can be adapted to the needs of any particular sector or business, providing automation and transparency.
Automation of Business Process. ERP promises to streamline front-office and back-office processes.
Customer Service. Slick, integrated processes make for a more reliable business with fewer errors, which means that your people can focus on customers. And ERP systems often include Customer Relationship Management (CRM) to track and retain customers.
What are the options?
The best-known products are from Oracle, including PeopleSoft, Netsuite and JD Edwards; SAP (the full product and it’s confusingly named versions); Sage; Microsoft Dynamics and Microsoft Dynamics NAV; IFS; Epicor; and Access.
But the list of options can seem endless, as specific sectors have their own ERPs — you’ll find products for the legal sector, logistics, manufacturing, professional services, and facilities management.
How do I start an ERP project?
An ERP project is a major undertaking for any organization. If you’re approaching this for the first time or your current ERP project is going south, call Freeman Clarke for a low-pressure, no strings-attached discussion. Our people are experts in all aspects of ERP projects, solutions and products.
We’re also completely unbiased — unusual for the IT world, we have no commercial connections with suppliers. We simply use our skills, knowledge and experience to serve the best interests of our clients.
And look out for content in our ERP Knowledge Center, where we’ll provide straightforward, useful content on crucial issues like how to start on ERP project, how to implement a successful ERP project, and using ERP to solve integration problems.
Freeman Clarke is the largest and most experienced team of part-time, or fractional, IT leaders. We work exclusively with organizations looking to use IT to grow their business. For an informal conversation, contact us and we’ll be in touch.
A Concise Introduction to Integration Problems Part I: How to Spot Them
Integration problems can cause your business quite a bit of damage. When systems don’t talk to each other, it inhibits growth and undermines morale. It means more mistakes and manual work. It makes reporting difficult or impossible! To make matters even worse, the problems can be difficult to understand in detail, and even more difficult to untangle.
Of course, every company has its challenges. So how do you know if integration is behind them? The first step is considering the specific issues facing your company. If you’re seeing one or more of the issues below, take a hard look at how your systems are working together or not.
The Six Most Common (and Frustrating!) Results of Integration Problems
Morale is suffering. Inefficient processes don’t just hurt the bottom line. They cause errors and delays, leading to frustration and arguments. And they make it harder to provide one of the most satisfying aspects of any business – good service to customers.
Reportingis inaccurate and time-consuming. Managing a successful business requires accurate and timely data. But when there are integration issues, reporting is over complicated, requiring major manual effort. You may also lack simple dashboards for managers around the business, which makes it harder to make the right decisions and delegate authority.
Service is suffering. It’s not easy to provide good service when you lack up-to-date information on stock, delivery, or products. Your people should put the customer first, but their energy is drained by system problems.
It’s harder for marketing and sales. Due to lack of data, great ideas never get off the ground. For example, the sales director has a clever idea for a new campaign, but it’s almost impossible to crunch the numbers. Or new plans for intelligent cross-selling or up selling are impractical, because nobody can effectively analyse purchasing habits.
You can’t strategize. Your online strategy is impossible if back-end systems can’t provide a simple platform. Without seamless back-office processes, you can’t easily analyse product, stock, or sales data; you lack effective product searches and other simple “must-haves.”
People are choke-points. Individuals have their own vital lists and workarounds, so they become individually critical to the operation. When these key people are on vacation or sick, then the whole business is affected and if they leave it’s a major problem!
Why Is It So Hard to Solve Integration Problems?
It can be hard to figure out solutions because busy directors just don’t have time to get to the bottom of it all. Put simply, there may be no one in your business with the skills, time, resources, and authority to solve these problems.
Another reason may lay in an accumulation of small problems, each intricate and complicated in their own way. For instance, when faced with integration issues many well-intentioned people create workarounds – their own special spreadsheets, databases, trackers, or the like. Each one solves an individual problem but adds further layers of complexity and time-consuming tasks.
Over time, more people are employed to deal with these tasks and, of course, they see it as their job. No one thinks of smart ways to eliminate their own job!
The good news is that while solving integration problems can be difficult, it’s definitely possible. If integration issues are hampering your company, learn what you can by reading the next instalment which will be published shortly.
