The Importance of Having an ERP Strategy
When implementing ERP software for your business it takes more than just purchasing software and implementing it, there are many details and actions that take place between finding your perfect ERP software and being able to use it. You will want to come up with a well thought out, detail oriented plan for the entire process. That plan is best known as an ERP strategy. Developing an ERP strategy helps to create a steady roadmap toward implementation and eventual software usage. The end result of ERP implementation should result in an easy transition from your old ERP software (or no software at all) to a new system for your business.
What is ERP?
Enterprise resource planning software, commonly referred to as ERP, is a technology solution and system that organizations use in order to manage their daily business activities. Those activities include procurement, project management, accounting, human resources, finance and manufacturing among others. ERP also allows businesses to integrate information, to store, collect, manage and communicate data across departments, which encourage cross department communication and collaboration.
ERP is designed to create an efficient, better automated and integrated business through its technology solutions. At its core, ERP software is a database management system.
What a Good ERP Strategy Should Have
When a business puts together an ERP strategy, it should include certain phases, goals and details to take into account. Those include:
- A list of potential software providers – have options when searching for a new ERP software to purchase. You shouldn’t simply go with the first software provider you research because it will make the process move faster. There could be a provider better suited for your business and your wallet.
- Business goals – what do you want to achieve with a new ERP software? Is it more across department collaboration? Eliminating paperwork and creating a more organized system? Knowing what you want for your business can help making choosing a provider easier.
- Software requirements – every business has specific needs and you should be able to have them handled through your software. ERP can help marketing efforts, finances and analytics.
- Implementation strategy – creating a timeline of when the implementation begins and ends is important. It gives your business time to collect all of the information that you will want to add to your new software, prepare future ERP software users for the change as well as prepare for the move to a new system.
Taking these factors into account makes it easy to know what your business wants out of an ERP software and provider and it also informs your business on how the implementation process will go.
What Having an ERP Strategy Is Important?
An ERP strategy sets the tone for how your business will react and handle a brand new system. Developing a strategy allows a business and its chosen software provider to make sure deadlines are met, the budget stays intact and any issues that may arise are handled quickly and with ease.
Many ERP implementations tend to not follow their initial schedule because either the business, the selected software provider or both did not fully understand how much of an undertaking the implementation process would be.
It is also important to find an ERP software that will give your business everything that it needs, including specific applications to help multiple departments.
Pros of a well-planned ERP Strategy
- Strong data management – better handling of important, content sensitive information. Business and client information should be both easy to store and find.
- Information is easy to find within the system – which makes it easier for users to perform work faster and more efficiently as well as and make better decisions with accurate information.
- IT effectiveness – if the software is implemented in an on-premise form, all updates and technical fixes will be made by your in-house IT department. A nicely implemented ERP software won’t be complicated for both its users and IT to learn and fix if needed.
Cons of a badly-planned ERP Strategy
- Lack of user productivity – if your users are becoming less productive, information isn’t available when needed and information cannot be accessed, your ERP strategy may not have been strong enough.
- Complex, hard to understand software – if there are modules that you will never need (or missing ones), a complicated interface, among other software issues, it will make it hard for users to adapt to a new system which will lead to a lack of productivity.
- High IT costs – having to constantly update or fix software issues can become costly for a business’s IT department to fix. Managing the budget and any possible implementation issues should be part of the ERP strategy in order to avoid them from happening in the future.