We hear from clients across the state who are looking for ERP upgrades. Whether you’re looking to upgrade an old system, or implement a system for the first time, it is a challenging process. However, with adequate time invested up front, things can go much more smoothly. Selecting and implementing an ERP system for manufacturing is a complex process that we’ve helped clients walk through. Here are a few useful questions and lessons learned to consider as you navigate this space.
Be very clear on why you’re looking at an ERP system
What problems are you trying to solve?
Is changing to a different ERP system the result of obsolete hardware or is it that the old software will not be supported in the future?
Is the change due to a lack of current features? The old software does not support multiple warehouses, does not support bar code reading or does not support on-the-road remote access?
Is the ERP change to prepare the company for future growth through improved analytics, more efficient use of employee’s time, provides additional capabilities or provides for more integration of the company’s data?
Ensure your business and your team is ready for the task
Is everyone on board? If not, it’s going to be a rough ride. Your employees will be asked to perform their day to day duties while putting in hours implementing the new ERP system. It’s key that they clearly understand “why” the new system is required and “how” the new system will benefit their department. It’s the leadership’s responsibility to ensure the team members have the understanding and are in full support of the effort.
Get your manual systems tuned to work for you
Take a hard look at your business processes and trim any waste, before you move to a new system.
Spend time to thoroughly explore the main information flow channels that all companies experience, those include:
- Order to Cash Flow
- Product Demand to Supply
- Procurement to Payment
- Finance to Management
These informational process flows must be “clean” before a company integrates them into a new ERP system. Skip this critical step and your new ERP system won’t see the efficiency gains that the new system is capable of.
Don’t get carried away with software customization
Try to use the software as delivered. Over 92% of companies use ERP software as it was written. If your company needs to customize there ought to be a good reason as the money and time required to maintain the customize software code through yearly upgrades and new releases become more expensive and more complex as the years roll by.
Budget enough money and time to train your employees on the new system
If they don’t get it, the new system will not get off the ground. Cost of the software is approximately 15%-30% of the ERP implementation, hardware another 10%-20% and the human resource tasks of training, learning the system and making it work, is 40% -60% of the cost. Human resource costs are the most overlooked and underestimated piece of ERP implementation.
Be sure to have an internal champion that will shepherd the implementation journey
A single contact person makes the process much smoother. While strong upper management support is a must, appointing a single champion (or a small steering committee in a large organization) is critical to guiding the troops through the entire process. A single champion can spot issues between departments, can ensure that all groups are moving at a similar pace and that there is one person that all issue are channeled through. All team members will appreciate a single go-to point of contact.
If you have questions on ERP implementation feel free to reach out – we’re here to support you.