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Top Five Tips to Help Choose the Right ERP System

Mindy Barker | Barker Associates

Last week, we talked about the strategic planning of an ERP system implementation, with factors to consider in both the planning and implementation phases. This week, we pivot to how to choose the right system for your organization. 

The decision has been made. You and your key stakeholders are ready to automate and streamline the workflow and day-to-day tasks. You’re more than ready to increase efficiency and productivity with one resource for data centralization, workflow management, and tracking. You’re moving forward, but quickly become overwhelmed, not with the process of implementation itself, but with the vast variety of ERP system options available.  

Taking the time to ensure there is a good fit is crucial for success. In fact, implementation failures often occur where there was never the right fit from the start. However, this should not discourage you from pursuing a transformational strategy that will provide a competitive edge.  

The following are the top five tips that will help eliminate the confusion and move the process along to help you choose the best system for your organization. 

1. Thorough Process Review and Analysis. Prior to looking at any system, you should determine your current needs, as well as those needs that are likely to arise in the foreseeable future. Start by documenting your current processes, strengths, and weaknesses. Ask yourself the following: 

  • What is working?  
  • What is not working?  
  • Where are the gaps in the current system and processes?  
  • What should the system look like now?  
  • What should it look like going forward? 
  • Do I actually need a new system?  
  • What problem am I trying to solve? 
  • What functions are “must needs,” and which would just be a bonus? 

After you answer those questions, create a document that shows the core objectives, needs, and gaps; what essential functions, solutions, and automation capabilities a new system should provide; the budget; timeline; and a list of key stakeholders. This document should present a clear picture of the criteria you require in an ERP system. 

2. Determine Budget and Research Costs. You’ve determined your needs, but now you need to know what budget you have and the related costs of the various systems. An ERP system implementation is time-consuming and a large investment, so you want to ensure you are comfortable with your budget, as well as all of the associated costs up front. As you research ERP systems, you should have a good understanding of all the costs involved – not just for implementation, but long term. You may want to consider: What are the licensing fees? Are there costs for training? Are there support, maintenance, and upgrade fees? It is up to you to discover any “hidden costs.”  

3. Review of Current Infrastructure. Before proceeding, you want to have a clear understanding of your current information technology infrastructure. An ERP system is software, and you don’t want to start down a road with a possible solution only to find out later that it does not align with your current technology. This is a large enough undertaking of resources. You do not want to have to worry about investing in a new technology system as well. Involve your IT department from the beginning to confirm that the new system will be compatible.  

4. Evaluate Systems. Narrow your requirements and criteria to the five or ten that are priorities. What exactly are you looking for? Use a chart or Excel spreadsheet to list out each and to keep all of the details organized. Then research systems via Google, social media, reviews, and recommendations. Verify all claims made through independent research and 3rd party reviews, and consider all options to start. It is not prudent to choose one because you’ve heard the name before or because it is what competitors are using. Instead, ensure it will meet the needs you identified in your process analysis. 

As you analyze your potential new partner, you may want to make the

following inquiries:  

  • How many implementations have you performed? Any in our industry? 
  • Who will be responsible for different parts of the implementation? What experience do they have? Will you use a third-party for any phases? What is required from my team? 
  • Is there a guarantee or warranty? 
  • Are training and support offered? 
  • Is it customizable? Mobile friendly? 
  • Is there cloud storage? If so, what are the data limits? 

As you gather information about each system, plug it into your criteria chart, so you can easily compare the systems, their functionalities, and their solutions. Additionally, check on the system’s scalability. This is a long-term investment. You don’t want to outgrow it in the foreseeable future. 

5. Meet with Stakeholders to Make a Decision. Having everyone’s buy-in on the system that is ultimately chosen is critical to its long-term success. Management teams should be involved – anyone who will be impacted during or after the process. You will need their support during planning and implementation. Choose the one that offers as much of the functionality your organization requires as possible, and don’t be swayed by extra features that you don’t need. Finally, look for longevity and a proven track record with other organizations similar to yours.  

Remember no one system will be a 100% perfect match for all of your needs or requirements, but it should be an overwhelmingly good fit for your organization. Barker Associates has extensive experience with ERP system implementation plans, assisting organizations achieve increased productivity and efficiency. Use this link to my calendar to choose the best time for your free 30-minute ERP consultation.

ERP System Implementation

ERP System Implementation 
Importing a Phased Plan, Exporting Complexity

Mindy Barker | Barker Associates

Transitioning to updated, automated systems that support growth and infrastructure is crucial to the long-term success of an organization. As part of this transition, the value of an Enterprise Resource Planning (ERP) system cannot be underestimated. Despite some challenges due to the complexity of automating several functions at once, implementation increases both productivity and efficiency. Through the integration of various functions, including financial reporting, human resources, and sales, the organization inevitably performs at a higher level.    

While the entire process may seem complex, as with most transitions, proper planning has a direct correlation to its successful conclusion. We often recommend to start not at the beginning, but at the end. In other words, what is the desired outcome? Knowing where you are going sets the tone for how you are going to get there. Examining what processes can be automated, the investment of resources (including time) needed for implementation, assignment of roles, including who can assume the project manager role, and the restraint on resources in the day-to-day demands being met simultaneously with implementation demands are just a few of the initial considerations. 

Once buy-in and support of company executives are achieved, the more complex process of implementation and execution can begin. A phased plan that clearly defines the requirements, objectives, and steps is crucial for a company’s successful navigation of an ERP system implementation. Best practices mandate that the plan be divided into two primary phases: Initial Planning and Implementation. 

Initial Planning Steps 

  • Review the current data structure and system to identify gaps. Rank the gaps in order of importance so you can determine what you need in the new system. 
  • Make a list of all the functions that are in the current system that are critical to the operation’s success.  Make sure those functions will be in the new system. 
  • Gather information about the organization, the day-to-day management of financial reporting, and any limitations of the existing reporting structure. 
  • Prepare a list of all reporting needs to ensure the proposed structure meets the requirements.  
  • Provide all information to make a decision and assist the organization with compliance. This review and analysis should cover the general ledger, development, and day-to-day operations. 
  • Review the process necessary to retrieve the data from day-to-day operations to make certain there is minimal (or no) double entry of data. 
  • Determine how all historical data will be kept and maintained once the current systems contracts are terminated.  
  • Determine the amount of time the products will remain live during the integration process.   
  • Determine the extent of historical information (timeframe and detail) to bring into the new software. 
  • Present the structure, outputs/reports, and plans for implementation to Executive Management to receive approval prior to moving forward with implementation. 

Implementation Steps 

  • Map all current general ledger accounts to the proposed structure, making sure each detail transaction has a location in the new set-up. This mapping is tedious and critical for the success of the new system.  It should be carefully prepared and reviewed. 
  • Document all newly created processes for the new system, carefully reviewing each to ensure proper controls are maintained and no essential functions are excluded from the new system set-up. 
  • Export data from the current systems to preserve detail historical data that may be required for research after conversion.  
  • Export data from the current system and, using the mapping created, move it into the new system.   
  • Do this month-to-month, and run basic reports to review against the current system information. This review will result in some changes to the set-up. Make these changes in coordination with Executive Review and approval. 
  • Ensure consistent and clear communication has been provided throughout the organization, and that key stakeholders will be able to obtain the information they need to do their jobs. 
  • Perform extensive testing in compliance with professional standards. 
  • Train staff who will be working with the new system. 
  • Make sure data is reconciled between all systems. For example, sales agrees with the sales and customer systems, contributions in a non-profit agree with the development data, and accounts payable agrees with the subledger. 

Following these phases and steps will help to ensure not only a smooth transition, but a successful process overall. Barker Associates has extensive experience with ERP system implementation plans, assisting organizations achieve increased productivity and efficiency. Use this link to my calendar to choose the best time for your free 30-minute audit consultation.