Anyone who has been directly involved in ERP implementation can attest to the fact that the whole process can be extremely time consuming and labour intensive. This combined with actual licensing costs can be off putting to stakeholders as it amounts to a significant upfront investment. The important question is, how does this weigh up against the cost of inaction?
Modern cloud ERPs can transform the performance of a business and pave the way for growth. If you’re looking at investing in a new ERP system, you’re probably focused on the creation of a scalable, future-proofed business, which should be a priority for the entire C-Suite.
CFOs today are heavily involved in the process of ERP implementation as there is so much expenditure at stake but also so much value to be driven from the project. The most successful CFOs recognise the value and role of modern technology in improving business and financial outcomes, and make overseeing ERP implementation their priority.
As a technology-driven finance consultancy, we’ve drawn on our experience of hundreds of technology implementations to create this list of 7 tips for successful ERP implementation specifically from a finance point of view. These insights will help you run an ERP implementation project in the most cost effective way and ultimately drive the most value from the new system.
1. Allow time for scoping and planning
Failure to appropriately prepare for ERP selection and implementation can cause major setbacks later on. We recommend not rushing into platform selection or software demos without first completing a series of steps internally to distil your organisation’s needs into a set of specifications to guide the decision-making process. It is advisable to plan for the future at this point with regards to your growth or expansion targets and how these will help you drive the most value from a new ERP system.
A solid plan, with timescales, aligned to business goals will help secure key stakeholder buy-in and guide budget and resource planning. Don’t underestimate the importance of this early stage and allow appropriate time to complete these tasks.
2. Opt for modular design
Modern cloud ERPs like Oracle NetSuite are modular by design. This means that you can add functionality as needed, and as your company grows. For example, your company may initially implement NetSuite to streamline finance processes like “order to cash” and “procure to pay”; your company may also utilise a third party logistics (3PL) organisation to run warehousing and distribution but eventually it’s your goal to bring this inhouse. With a modular ERP system you can add functionality as it’s needed rather than paying for services and systems you don’t yet need. When it's time to include that part of the business within your main system, you can discuss with your software partner and implement the appropriate modules to help with WD and Inventory. This is extremely important for data integrity and eliminating manual intervention as more of your business processes are accessible and managed under one roof.
3. Future-proof with the cloud
Change to business processes is inevitable as your company grows. These changes can come from a variety of factors: business growth, company acquisition, market or industry changes, regulatory changes and more. It is hard to predict the way you will need to change your business processes in the future, so what you need to ensure is that your systems are inherently designed to respond to these changes and are flexible enough to support your future processes.
A modular system will increase functionality in an incremental way as needed, but to ultimately future-proof your system, it is becoming more and more critical to move on-premise systems to the cloud. On-premise setups are the reserve of legacy systems and vendors today will always steer businesses towards cloud models.
On-Premise systems tend to be “sun-setting” meaning that updates and changes are being decreased in an effort to phase users out and force them to make changes to a cloud version or whole new system. Most new Cloud based systems run period updates remotely in a way that causes the least disruption as possible and ensures that the system can be adapted to respond to changes that may arise in a particular industry or as new better ways of working present themselves.
4. Standardise processes globally
Though your organisation may not be extremely complex operationally at the moment, it is important to consider that this complexity will probably increase and compound significantly in years to come. It’s for this reason you should look to standardise processes to a system and guide them by “best-practices” as early as possible. Early on in your business’s lifetime, processes are developed in an ad-hoc manner with a focus on supporting new business or client needs any way possible. These processes are reliant on the current expertise (often limited this early on) and initial systems (usually spreadsheet based); they are really acting as a Band-Aid solution. These ad-hoc solutions and processes will quickly become unsustainable as complexity is added, this is especially the case when interacting with other businesses and geographies.
Mapping these processes early on will provide a level of control and the ability to scale at a later date. Investing in an ERP system and understanding how each process functions within that system can help guide you to a “best-practice” solution for that process. Using these as the global standard as you grow will help you scale in a sustainable manner.
The benefits of global standardisation across the wider organisation will be especially apparent in matters such as complex consolidation, especially with subsidiaries in different territories, languages and currencies.
5. Consider localisation
Though global standardisation solves many complexities with geographic expansion, it is important to consider that processes will never completely mirror that of the original business. This is due to the nuances of issues around different countries' unique requirements and regulations around tax, compliance, reporting etc. For this reason it’s important when designing your overall system landscape to not choose regional or solely industry specific systems, but to look at ones that have global reach and are used to including solutions for global nuance.
6. Choose a systems partner network
No system, ERP or otherwise, will provide you with a level of functionality to deal with each and every unique or niche process your company currently has or will have in the future. It’s for this reason that it’s essential to only consider systems that have a healthy and accessible partner network or ecosystem. “System” or “platform partners” are third party development systems that complement and run specifically alongside core systems like an ERP. Do your research, some systems have partner networks that are far better than others.
Some questions to ask yourself when investigating system partners include:
How well vetted are solutions that provide functionality? Can anyone develop these add-ons or are there trusted experts who can back their quality?
Do they allow partners to run natively within the core system or ERP? This means that you don’t need to leave your core system to access the additional functionality?
If not, how do they integrate? Is it an easy integration that is secure, or will you have to do a lot of development work to make sure data flows and data mapping is working correctly and securely?
How closely does the core system work with their Partners? Partners are often a good source of revenue for the core systems they support, for this reason they have a mutual benefit to ensure everything is running correctly and customers are happy. Partners that don’t communicate and work hand in hand with the core system team are to be avoided if possible.
7. Layer functionality to maximise value
Creating a “single source of truth” for your data at the heart of your systems architecture is essential. As you grow, you will need to layer additional systems and functionality on top of a core ERP. This needs to be done in a considered manner to ensure the multiple systems are running seamlessly and harmoniously together.
ERPs are very good at running core processes, but for additional processes that need a certain level of refinement that the ERP cannot provide it can make sense to layer on a “purpose-built” solution to complement it. Some purpose built systems that a more mature company might layer on to their solution could be a specific budget and planning tool or FP&A tool, or maybe a visualisation or BI tool to help create a more sophisticated board-pack or investor pack.
When considering purpose-built systems versus general or modular ERP systems, it is important to consider how effective each would be for your specific business and what sacrifices may incur. For example, It’s important to consider the overall value of moving functionality out of your single source of truth, and if it does make sense then to do so, with least disruption to data flows and involving the least amount of manual intervention. To do this, only consider tools that integrate well with your core systems. The data flows should run seamlessly from end to end, and you should have full transparency throughout the entire process.
ERP implementation can be a mountain to climb, but with solid preparation, the right guidance and a modern outlook on technology, success is closer than you think. With experts in ERP, VantagePoint is here to guide you towards your goals. Read more about our ERP implementation services here and contact us to start your ERP implementation journey.