July 30, 2019
Is your company ready for an ERP Solution?
How do you know when your company is ready to go to the next level?
Is your company there? Are you ready to put several different systems and applications under one umbrella using an ERP System? If you are at this crossroads, there are a few things to consider and prepare for as you take the next step in your entrepreneurial journey. An ERP system will help you to improve margins, expenses, maximize investments, and increase your company’s overall value.
So what is an ERP?
ERP stands for Enterprise Resource Planning. It is a shared database to integrate accounting, finance, purchasing, logistics sales, marketing, human resources, payroll, time tracking, and other business unit systems. This system will ENABLE THE FLOW OF DATA AND COMMUNICATION AMONG DEPARTMENTS, THEIR FUNCTIONS, AND THEIR DATA. Having centralized data encourages increased collaboration leading to improved process times. This information can provide real-time information which can serve as a dashboard for KPI’s (key performance indicators) to monitor and manage daily business, and plan to future growth.
Is my company ready for an ERP System?
Here are four scenarios that may qualify your business to integrate your software systems into one.
1 Too many software products and they aren’t integrated!!! You may have accounting software, estimating software, inventory software, bar code software, logistics software, employee timekeeping software, and a customer retention system! Some software may integrate and some may not – but yet you are still left with the task of compiling data and analyzing the relationship to another business unit. Additionally, investing in an ERP system is extremely beneficial for organizations with multiple locations.
2. Your KPI dashboard isn’t in real-time. If it takes half of a day to compile your KPI’s you need an ERP. Ideally, your KPI dashboard should be similar to the dashboard on your car. At any time, you should be able to access the pertinent and important information you NEED to know to make daily management and operation related decisions. Operating under one system, if your top client has an immediate need, you can determine how quickly you can fulfill their request. You will be able to manage your inventory, production, shipping, and delivery without delaying the production of currently scheduled work.
3. Accounting is Laborious and Tedious. Stop wasting time populating excel spreadsheets instead choose what you want to include in your reporting and automate the frequency daily, weekly, and quarterly! According to Finances Online, there are significant reductions in operational and administrative costs and inventory while experiencing improvements in on-time shipments, inventory turns, the cycle time of key processes and internal controls.
4. Sales and Customer Service are struggling. You’re growing. You’re winning proposals. Your clients love your product and what your company is about. But… you’re struggling to meet demand cost-effectively and keep customers happy. ERPs technology will help to streamline business processes to scale with client demands. On the backend you will see improvements in quote tracking, seizing the opportunity, timely shipping, and supply chain with automating business unit processes. On the client-facing side, you will experience a happy and satisfied customer along with a strengthened partnership.
Do your research.
As with any new investment – do your homework! According to TEC, nearly 50% of ERP Implementation fail the first time around, take 30% longer than estimated to implement and the costs are 3-4 times higher than what was budgeted. 65% of the time budgets go over to accommodate needed system modifications. Get referrals from trusted and impartial business associates to help you weigh the features and benefits of implementing a centralized system.
Easy ERP has cited that costs for these implementations vary depending on the size of the company, the number of users, level of customization, and the need for external resources and consultants. Small to medium-sized businesses have invested anywhere from $75,000 to $750,000. Like any other software, expect residual costs for training, maintenance, support, licensing, storage and upgrades that vary depending on vendor, package, and customization. The ongoing costs have been estimated to cost 15-20% of the initial implementation price.
Let us help
If you are considering making this big decision, please let us help you evaluate this investment with cost-benefit analysis and how long it will take to see a return on investment. The answers will be in the numbers. Please contact us today.
By Wilke & Associates, CPAs