10 Considerations When Planning for ERP Software
When your software impacts the growth and management of your business, along with the productivity of your employees, it’s time to think about new software. Harry Landsburg, DVIRC’s Director of Business Process Technology, provides 10 topics often discussed when companies realize that legacy software or the popular combination of QuickBooks + spreadsheets just can’t do the job.
- Is it the software, or is it us?: If the long-term use of your software has been impacted by employee turnover or changes in how you do business, you may not be 1) using the right software or 2) using the software right. If your vendor is still in business and you haven’t upgraded for a while, make sure you know what you are missing. Most companies use well less than half the functionality they own based on DVIRC’s experience.
- Who “owns” the software?: Is the person responsible for your software really able to help your company get the value you bought? Make sure there is an advocate for how to best use the software and get the most value from it. Without this focus new software is likely to suffer the same fate as your current solution in a few years.
- Standalone CRM software: Companies with insufficient software often invest in standalone CRM solutions. The lack of connectivity to ERP software causes redundant data entry. Lack of full visibility by business development and customer service staff of the entire customer relationship is bad. Integration of CRM software to an ERP solution (think Salesforce.com) can be costly. Visibility in one database is critical. Evaluation of ERP software with proprietary CRM software should be considered.
- Spreadsheets everywhere: Underpowered software solutions are propped up by spreadsheets. These islands of critical information are not a substitute for fully featured ERP software that presents user friendly information from a single database of well controlled data. This centralized solution is backed up daily, more secure than spreadsheets everywhere, and has real-time information visible in dashboards.
- Working better with customers: Your customers want to work effectively with you or they will find another supplier. Their secured access to your information on inventory and production presents your business as a cost effective and valued supplier. If your software and technology can’t support a customer’s need for secure, real time information, a valued business relationship can be lost.
- Working better with your suppliers: Why should you be any different than your most technology driven customers? Your connection with your supply chain is equally critical. You should have the software and technology to know all that you can about how your supply chain is supporting your company.
- Control of inventory: Too many companies have to count inventory to really know what they have. Inaccurate inventory in an ERP system is incredibly disruptive at many levels. ERP software needs accurate inventory for replenishment, to meet customer demand, to drive MRP functionality, and to properly supply work orders in the factory. Try all this with QuickBooks.
- Correct information: Too many spreadsheets mean that not everyone has the right information. Decisions can be made on faulty assumptions. Different spreadsheets for common tasks often do not have the same information. Confusion and subsequent reconciliation reduce productivity.
- Security risks: Who backs up all the hard drives that spreadsheets are located on? What prevents a disgruntled employee from making lists of customers or other competitive data? Security built into good ERP software relieves aspects of risk that are critical to your business.
- On premise or in the Cloud: You can choose where to locate your software. On premise can work better if your technology is current. In the cloud works to avoid hardware upgrades as long as connectivity is good. DVIRC studies show that the cost of cloud exceeds on premise after five years. Think long term.