Migrating to ERP Seven key questions to ask before you invest. White Paper
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1 Migrating to ERP Seven key questions to ask before you invest White Paper
2 Migrating to ERP Seven key questions to ask before you invest Success and complexity Business growth can create increasingly complex internal processes. At a certain point, this mounting complexity makes it necessary for businesses to adopt more sophisticated business management software. This is where enterprise resource planning (ERP) comes into play. ERP software is essential to the success of any mid-market organisation in today s business environment. It can support a range of core business activities, such as finance, marketing and sales, inventory management, manufacturing, service delivery and distribution. Accessible and affordable The increasing affordability of mainstream ERP platforms means smaller businesses can afford to refresh legacy software or shift from paper-based systems to a consolidated ERP platform. These businesses can also treat ERP as an operating expense rather than a capital expense by subscribing to a cloud or hosted model. Even so, these transformations can be complex for businesses that have only recently grown beyond the start-up phase. Organisations that have outgrown their accounting software often struggle to justify investing in ERP. A new ERP platform will typically serve a business for 10 or even 15 years and could be the largest and most transformative investment in a business s lifetime. This is why many delay an ERP change in favour of prolonging their legacy investment. However, if existing systems are struggling to process large volumes of transactions or extend functions beyond basic bookkeeping, it may be worth considering the benefits of a new system more closely. At Pronto Software, we understand that upgrading to ERP from legacy systems can be fraught with uncertainty. The following are seven questions you should consider before deciding whether to invest in ERP. Page 2 White Paper
3 An ERP checklist Before selecting an ERP platform: Express what you need, and what you d like to have, as measurable outcomes. Learn what motivates your principal advisor. If you re using a consultant, acknowledge any bias they may have and make sure you re comfortable with it. Understand where you can expect to increase revenue or reduce costs to improve your bottom line. Choose a vendor that suits your business. The company you deal with is more important than the software they offer. Familiarise yourself with their people and make sure you feel comfortable about working with them. Know which vendors offer detailed discovery services to ensure your business gets what it needs from the refresh. Distinguish vendors that will tailor their solution specifically to your needs from those that are simply selling a product. Pronto Software Page 3
4 1. Is your software effectively supporting your business? It s common for businesses to bridge operational gaps with new processes when a legacy accounting system ceases to meet expectations. However, this approach will only serve your business until it starts creating more work than it saves. If growing complexity in your business is reducing data integrity or promoting human error through double handling, it s likely the shift to an ERP platform will solve some of your problems. An ERP platform can solve many of the issues that come with expanding online or overseas. These systems provide a single interface from which to manage multiple warehouses that have varying costs. Similarly, ERP platforms can make it easier to buy and sell in multiple currencies, calculate landed costs, and manage product recalls, warranties or back orders. If your business has multiple entities or field service technicians, an ERP platform can connect them all through a single, easily accessible back-end system. ERP platforms are also useful for businesses that import, distribute or manufacture goods, and can serve as integrated sales systems for wholesale, retail and online departments. 2. Do you view ERP as a business decision? It s important to understand that moving core systems is a business decision, not an IT decision. Despite its capabilities, an ERP platform will not solve existing business process problems. For this reason, it s essential to treat the cost of a new platform as you would any other capital investment. Rather than delegating the transformation to IT, involve all departments to ensure stakeholders across the business accept and commit to using the new platform and processes. Similarly, the business s board and C-level employees need to take ownership of the project for it to be successful. It s important that business leaders are involved in key considerations, rather than expecting the software vendor, IT manager or project leader to make big decisions on their behalf. It would be unusual and potentially risky for a business not to have its executive-level staff closely involved in the project. Involving high-level staff will ensure that business leaders know enough about the platform and desired outcomes to make decisions that will best serve the business in the long term. Businesses that shift from legacy software to ERP are often compelled to do so by the mounting complexity of the surrounding systems. If your accounts software is corralled by supplementary spreadsheets, standalone databases and manual tasks, migrating to a ERP platform could help consolidate and rationalise some of these processes. Page 4 White Paper
5 3. Will you refresh or retro-fit? Businesses grappling with the limitations of legacy systems have two options. In some instances, it is possible to resolve complexity by investing in add-on modules developed by the legacy vendor or third parties. These add-ons often aim to deliver integrated inventory, warehouse and work order management, or purchasing and e-commerce functionalities. The other option is to invest in a consolidated, comprehensive ERP platform, such as Pronto Software s Pronto Xi. 4. What are your goals? Before deploying a new platform, it is essential for all stakeholders to clearly define their intended business outcomes. Create a business case that concisely explains the relevant issues and outlines how the project aligns with your future development strategy. The business case should also project likely costs and outline where and how your business will reap its return on investment. The next step is to establish the scope of the transition. Having established a long list of intended outcomes, the business should limit the migration scope to include only the most crucial and necessary business processes. Form a list of secondary outcomes you can defer until after the initial rollout and be ruthless in establishing priorities for the shift. Any transition of this importance will be subject to three variables: scope, available resources and time. It helps to accept that, if one of these variables is fixed, the other two must be flexible. Pronto Software Page 5
6 5. Who is your team? Every person involved in the shift to an ERP platform consultants, IT managers, project managers, staff and contractors will have an agenda. It s essential for business leaders to understand each key stakeholder s motives and bias regarding the platform, as well as the incentives at work in their own teams. For example, IT staff members may have previous experience with particular software or a consultant may have a financial motive for recommending one platform over the other. This kind of knowledge will equip you to choose the best platform for your business, irrespective of bias among other stakeholders. Change is often met with resistance in business. A development as substantial as new business software can be challenging to implement, and larger organisations tend to experience greater levels of frustration among staff members. This is why it s also essential to appoint someone who will manage ongoing change once the new platform is in place. Ideally, an appointed change agent will already be respected among your staff. This employee does not need to be the chief financial officer, but they do need to be enthusiastic about the change, able to negotiate conflicts or difficult issues, and capable of standing their ground with external parties such as the ERP vendor. 6. Will you need to customise? Every business has unique elements that contribute to its success. These can be simple things; for example, your business might be known for its reliable delivery times, excellent returns policy or exemplary customer service. When choosing an ERP solution, it s important to ensure the new system will support or accentuate your business s defining characteristics. For example, if a unique sales proposition such as guaranteed fastest delivery time is downgraded to reasonable delivery time when a new IT system is installed, it could damage a business s reputation or detract from its competitive advantage. If any aspect of an out-of-the-box solution could obstruct your business s central value proposition, customisation might help resolve the issue. A customised ERP platform is also worth the investment if it can avert or alleviate transition difficulties. However, outside these circumstances, customisation can complicate the transition. Most mid market platforms come equipped with enough capabilities to satisfy a wide range of business requirements. For example, a recent Pronto customer decided to take the no customisation approach to deploying Pronto Xi. Whenever the organisation ran into challenges, its change agent would carefully consider whether the associated legacy reports, processes or authorisation levels were really necessary. In most cases, the customer found that the older processes were either unnecessary or could be replaced by the capabilities of its ERP. Only a handful of legacy processes needed to be customised for the business to achieve its objectives. Page 6 White Paper
7 7. What s your post-deployment plan? Once the ERP is installed and change management is underway, you should consider how the new platform could improve or replace existing processes. Change agents should continually canvas departments to identify existing business processes that aren t adding value to products or services. While an ERP platform might not solve all of a business s issues, it may help resolve a number of longstanding frustrations. Contact us Migrating to an ERP platform is a complex undertaking and presents vastly different challenges for each business. If you would like more information or advice on upgrading from legacy systems an ERP, get in touch with us at info@pronto.net. For example, a Pronto customer discovered that they had data quality issues through human error. The customer resolved the issue by applying pre-determined data for different employees in the sales order process. This eliminated guesswork among data entry clerks and greatly improved data integrity. Another customer found that one of its departments was spending hours running and consolidating a range of reports to share analytic insights among employees. The business used Pronto Xi to create a customised business intelligence dashboard that presented users with key information upon login, removing the need for manual reports. These examples highlight the potential process efficiencies that a customisable platform such as Pronto Xi can offer to businesses considering the shift towards ERP. Provided you are prepared to think laterally and carefully about your business processes, an ERP platform will continue to serve your business well into the future. Pronto Software Page 7
8 Tailor-made business software solutions. Pronto Software has been developing award-winning business management software for over 30 years. With in-built intelligence, flexibility and an easy-to-use interface, its flagship product, Pronto Xi, enables users to discover rich business insights PRONTO ( ) Find your moment: pronto.net Pronto believes in the power of actively listening to clients, adapting our product to meet their needs and finally revealing the best solution. It s how we continually surpass client expectations, delivering moments of utter surprise and delight.
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