Top 5 Reasons To Implement an ERP System In Your Business

Top 5 Reasons To Implement an ERP System In Your Business

Implementing an ERP in a company is a very important decision, a large investment depends on it . It is one of the most important resolutions in the life of a company and that is why several questions arise. Is it really necessary? How does it benefit me? How long it takes? Will it really solve my problems? Is there a margin of error?

The main thing is to know what the needs of the company are, what do you want to automate, why a digital transformation and what does it mean to simplify so much work? Increase production? Less work hours? More money? It is essential to know what an ERP is and what support it represents for the company.

Why implement an ERP in my business?

There are at least 5 reasons to implement an ERP:

1. Integration of financial information

When a manager tries to understand the global performance of the company, he can find many “different versions of the truth.” Finance has its own set of revenue data, sales have another version, and different business units can each have their own interpretation of how much and how they contributed to revenue. It is here when the solution is to implement an ERP since it creates a single version of the truth that cannot be questioned, because everyone uses the same system.

2. Integrated customer information

The ERP systems can take the order data in the client’s own office and generate the manufacturing order, if applicable, or dispatch the merchandise and send the invoice. By having information in a single system, rather than being dispersed among many different ones that cannot communicate with each other, companies can more easily track customer movements and coordinate manufacturing, inventory, and shipping to different destinations at the same time.

3. Standardization and acceleration of manufacturing processes

Manufacturing companies, especially those intending to do mergers and acquisitions, often find that multiple business units use the same devices to do a particular job, using different processing systems and methods. ERP systems are implemented with standardized methods to automate some of the steps of an industrial process. By standardizing these processes and using only an integrated management system, companies save time, increase productivity and reduce “headaches”.

4. Inventory reduction

ERP helps the industrial process to flow more easily. This leads to a reduction in inventories of both in-process and finished products. In addition, significant improvements are obtained in delivery time to customers . To really improve, you need to implement supply chain software (Supply Change Management).

5. Standardization of Human Resources information

In organizations with multiple business units, the human resources area cannot have a simple method. The HR area needs to be unified with a system that allows tracking the careers of employees or knowing their productivity and communicating with them about benefits and services. The implementation of an ERP solves the management of human capital.

How long does it take to implement management software?

Companies that decide to implement an ERP do not always have a lot of time to do it but it is important to understand that it is an important process and it takes time. ERP vendors often claim that implementation time averages 3-6 months. We have to take that as an average and not as the only truth. Sometimes short implementation periods present unforeseen events. Although there are no strict rules to follow to ensure a successful implementation, it is recommended to follow certain stages of ERP implementation.

In recent years, however, Internet-driven changes reduced the time it takes to deliver ERP modules. These faster deployments are the result of intensive improvements to deployment processes and a new category of ERP software delivery known as on-demand or Software as a Service (SaaS). On-demand applications and ERP SaaS are typically hosted by a third party, and customers access through an Internet connection. Because the software does not need to be implemented in the traditional way, known as on-premise, the time and resources required are considerably reduced.

Six phases of an ERP software implementation

The main phases of an ERP software implementation , at a general level, would be defined as follows:

1) Organization - Project Planning

The objective of this stage will be to determine the project’s resources, both technical and human, in the same way, the project planning agreements must be defined in terms of working times and hours. The work team must be defined, with the roles and responsibilities of each role completely clear. It is also recommended at this stage to leave the software installed to guarantee its correct functioning in the company’s own environment from the beginning.

2) Modeling - Business Understanding

The objective of this stage will be to reach a common understanding between the specialist team of the system and the expert team of the company as to what are the current processes of the company and what are their expectations regarding the implementation of the ERP.

3) Parameterization - Configuration and Development

In this stage, the tool must be configured under the parameters defined in the previous stage. If necessary, it must also comply with the developments or special configurations that are required. In addition, this stage should be the one indicated to carry out tests of what is configured as well as tests of any development or integration with other systems that may have been required.

4) Final Preparation

The objective of this stage will be to cover all the requirements prior to the live start. This is where the end user training as well as the ERP system administrator should take place. Additionally, in this stage, final tests of the system, adjustments of the same and preparation of initial balances for the live output must be fulfilled.

5) Putting into production or Go Live

Finally, this stage is aimed at starting up the new system. Your main objective is to get out of the testing environment and start working on a definitive Production basis. Additional focuses on the support required during the first weeks of work as well as performance improvement adjustments that may be required. However, it is necessary to know that there is life after implementing an ERP.

6) Project Control

This is an independent stage from the previous phases and should be fulfilled throughout the project of implementing an ERP . Its objective is to keep track of the same with respect to compliance with planning, delays, pending, analysis and risk mitigation, and any activity that supports a quality control of the implementation.

Adapt ERP to your business

Can the ERP adapt to the way of doing business of your company?

It is critical for companies to know if their ways of doing business will fit into a standard ERP package before hiring it and starting implementation. The most common reason why companies do not decide to launch an ERP project is that they discover that the software does not support one or some of their most important business processes. There are two things that can be done:

  • The process can be modified to suit the software, which will mean changes from the old ways of doing business. Often this approach to the problem provides one or more competitive advantages. On the other hand, it impacts on the important roles of people and their responsibilities.
  • The software can be modified. In this case the implementation project is delayed. But there are other consequences if you decide to add or modify programming code. For example, the update of future versions that will be released by the provider.

Needless to say, the implementation of an ERP is a very wide-ranging project that impacts the entire company and that, once in operation, increases operational efficiency. There are cases of failed ERP implementations that serve as learning, it is important to know what happened to be able to prevent it and make the ERP project go as smoothly as possible.

What are templates or templates?

Templates, or templates, are pre-written routines that perform various tasks and simplify the implementation of management software . They are a quick way to put business requirements to work. Because the functionality of the templates has been made for companies similar to yours and ideally tested, they are easily connectable or assembled with the ERP modules; They offer many of the benefits of customization without the risk of incurring excess time and budget. Templates provide more options than the ability to configure software.

Template limitations

The probability of implementing a full erp without at least some custom code is minimal

However, the less code to write, the more enjoyable the project will be. Remember that a successful implementation depends on scope, timing, quality, costs, risks, human resources, and communication.

Some templates are available for free and others have costs

From a few dollars to thousands, depending on your origin and the complexity of the template. The main ERP systems have template libraries available. Sometimes they are owned by the software provider, and sometimes they are offerings from the vendor’s ecosystem, primarily owned by a specialized partner. In most cases, there is no guarantee that templates from one source will fit well with the others, but all of them must work with the ERP software for which they were designed.

The quality of an ERP template varies

Depending on the quality control practiced by the developer. Some were made for a specific project and released as a last minute product. Others were carefully developed to the highest standards.

The templates are not easy to install

It is highly likely that you will need the help of consultants to properly configure the complex ones. Consider that the ERP vendor will not be able to support you if there is a problem with a template made by a third party. Most vendors offer support on templates that were provided by themselves, although it may not be of the same level as in the case of the product.

You must thoroughly test a template before using it

Pay particular attention to the limits of the template. For example, some are limited in the number of users they will support simultaneously. Others can significantly decrease the performance of the system. If you are going to buy a template, it would be nice to have a trial period to see if it will work according to your needs.

Templates are not the ideal solution to solve the customization vs configuration dilemma , but they are a third option that is worth examining.

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