Take 5 steps towards a better ERP system
If your company’s basic financials and operations aren’t enough anymore, it may be time to look at putting a modern enterprise resource planning (ERP) system into place.
With newer ERP features and applications being developed all the time, it’s important to investigate your options. Plus, in this competitive landscape, chances are that your peers are already updating their ERP systems, and you want to stay relevant.
What is an ERP system?
ERP is business management software that allows an organisation to use a system of integrated applications to manage and integrate a company’s financials, supply chain, operations, reporting, manufacturing, and human resource activities.
Now that you know what an ERP system is, learn the five steps you can take to implement a better solution for your business.
Step one: Identify the limitations of your current system
Here are three signs that it might be time to replace your legacy system and implement new software:
Growth cap
Has your current system kept up with you as you’ve as grown and added more staff, clients, and business processes or entered into new lines of business or markets? An ERP solution should allow your company to expand while it operates and maintains everyday business processes.
Lack of insights
Even though ERP software offers real-time visibility of an entire business, as well as insights into the industry landscape, many companies still opt for legacy software that works independently from other systems. This can lead to different departments working in silos. Software that ties all your disparate systems together while offering data analytics and business insights is a win-win, offering productivity, growth, and a competitive edge.
Costly legacy system
Most companies have taken a deep dive into what they’re paying for their current ERP deployment fees and maintenance. Although they know about the hard costs, most don’t know about the pros and cons that come with each deployment option, whether it’s on-premises, in the cloud, or a hosted ERP solution. It may be time for an even closer look to decide if you should move to the cloud, keep things on premise, or invest a combination of both.
TIP:
Many businesses believe they have to do a complete ERP overhaul and get rid of the system they’re using now, but that’s not true. An ERP system can be the sum of many applications and add-ons. So, if you don’t currently have a system that’ll let you keep the processes that work and add new ones, look for software that does.
Step two: Remind yourself what an ERP system should offer
Let’s start with the ERP nuts and bolts. Here are some of the basic components that every legacy ERP system should have:
Financial management
Not only should your system help you meet regulatory compliance, it should also deliver accurate data and analytics to help you keep an eye on your budget, including the management of multiple currencies, cash flow management, and bank transactions.
Manufacturing
This function should give manufacturers the ability to access real-time data to optimise production planning, as well as project and cost management. ERP manufacturing should also offer the ability to manage resources and fulfil customer needs.
Supply chain
As the days of manually entering information and doing physical stock of goods become relics of the past, this function should improve warehouse and stock management and let businesses gain greater insights into their products and integrated logistics.
Step three: Discover what a modern ERP system could offer
Modern ERP systems offer built-in intelligence to help guide users to optimal outcomes. They also scale with your business as you expand into other markets and help keep client and company data secure. Plus, a modern ERP platform goes even deeper into meeting your business needs by offering less costly customisation. This means it can work with your legacy system, but also extends your everyday processes as you grow. Some of the other resource planning tools it offers could help you:
- Increase productivity.
- Get control of financial management.
- Help deliver better customer service.
- Assist with human resources management.
- Streamline project management needs.
- Improve supply chain and operations management.
- Make better decisions through business intelligence and AI.
Global ERP has its benefits as well. It streamlines all those basic finance and operational functions and helps you sustain standard business processes that help you expand into new markets and work around the world. On a global scale an ERP system offers tools to:
- Help you collaborate across your virtual organisation.
- Support new locations that allow you to expand into new markets easily.
- Standardise a single ERP solution and help simplify your IT environment.
Step four: Create a game plan
It can be overwhelming when you think of implementing an entirely new system or knowing what to add or take away from what you have now. The better your plan, the smoother the improvement or replacement of your legacy system will be. Start with these three steps:
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Make a wish list
Write down the ERP functions you’re already using. Even if it’s only a basic financial and stock tracking system. Now make a list of the features you’d like to have or need. Now that you have some options and ideas of what’s out there, you could also look into special features like adding pre-built applications or build custom applications.
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Set your budget
Now that you have your wish list, the next step is to set a budget. Like buying a new car, you should know whether your budget allows for a used car or brand new one. Knowing this helps you focus on the systems and features you should be looking for. Start with the cost of supporting and maintaining a system then look for any hidden fees along the way.
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Don’t be afraid to ask questions
Don’t settle for a one-size-fits all solution. Make sure the solution you’re looking for caters to your unique business needs. If you want to move from on-premises to the cloud, but have questions about security, find a technology partner to help you address those concerns.
Step five: Choose your technology partner
The most important part of implementing a new system is the technology partner you choose. It could be an ERP match made in heaven if you choose right, with the hope being that they’ll be your partner ‘til system do you part. Here’s some of the qualities you should look for in your future implementation partner:
- Have they done implementations for a company like yours before?
- Will they make themselves available before, during, and after implementation?
- Do they have the right combination of technical expertise and product knowledge to help you?
See what a modern ERP software system can do
We’ve answered the question of what is an ERP system, the basics you need, and the extras you might want to implement. Now discover the ways that Microsoft Dynamics 365 for Finance and Operations can help you streamline your everyday financials and operations, using modern and intelligent enterprise solutions.