Fashion 7 ways to know you re choosing the right fashion ERP solution Growing pains. When kids have them, it s because they re about to move into a new stage of development. You see these kinds of growing pains in business, too. These pains can happen when you realize you don t have the right tools and capabilities to complete anything from a daily task to a large, complex job. For many businesses, these are the kinds of growing pains that let you know it s time to add an enterprise resource planning (ERP) solution or to upgrade the one you already have.
Can your ERP system keep up? If you already have an ERP system in place, there s a good chance it s no longer able to keep up with your growing needs. The capabilities gap between older ERP designs and current demands already poses a problem that manufacturers simply can t ignore. Many legacy ERP customers become stuck with a vendor because, as one analyst put it, The majority of ERP systems cannot support business change easily and so the only way to make any sort of tweaks to the system is through significant, complex and expensive programming at code level. 1 What this can mean for you is that when you are looking for a new software vendor for an ERP implementation, your vendor of choice should have an innovative product roadmap and a deployment strategy that will give your business room to grow not get stuck with another expensive legacy system. In either case, when you re straining to support your business needs, it s time to consider your ERP needs. An old-fashioned, generic system implemented using a one-size fits all approach isn t going to help you compete effectively in today s global marketplace. What do you need to know? If you re the CEO of an apparel, footwear, home textiles, or accessories company in the fashion manufacturing industry, you re accustomed to dealing with the changing face of retail and the rise of the omnichannel consumer. You know that you have to listen more carefully to your customers and collaborate more closely with your supply chain. Your choice in ERP system should be able to help you address these challenges. For many companies, the right ERP system can relieve your business of the things that are creating a strain. And, if you follow this roadmap, you ll know what to look for when selecting an ERP system. These guidelines and simple suggestions can help you to find an ERP system that s the right fit for your business landscape. Here are seven important factors to consider when looking for a fashion ERP solution. 2
1. Does the ERP system you re considering speak the language of your industry? Your ERP system needs to fit your business not the other way around. As a process manufacturer, your ERP system needs to support your way of manufacturing. With these considerations in mind, it s crucial that you choose a software vendor and implementation partner that has proven and extensive experience working within your specific industry and segment. In addition to having strong technology skills, your prospective partner needs to thoroughly understand your business. They should know how best to configure the system to support your processes, and possess a depth of knowledge that will allow them to ask the right questions and recommend industry best practices, where appropriate. 2. Does the ERP system support evolving business models? Seasons are getting shorter. Fashion trends change overnight. Business models should be able to change, too. Consumers demand greater choice and expect immediate availability in their color and size. If the right product mix is not in the store at the right time, you lose sales and your brand image can suffer. With low sell-through rates, ticket price markdowns are often necessary to shift merchandise and minimize old inventory squeezing margins unnecessarily. Rather than follow this old route, you can approach the demand for greater choice and immediate availability by building out the business models to meet these omnichannel needs and experiences meet the customer where they are, rather than use markdowns to bring them back. For this flexibility, it s important to have an ERP system and a supply chain that can help you support consumer demand and evolving business models. The system may have to handle everything from process-based textile manufacturing, discrete cut and sew operations, to brand management and multi-channel sales, such as wholesale, retail, and e-commerce. An ERP system has to last you for the long-term. When you re choosing, make sure you re getting the industry-specific functionality you need, at the best price. 3
3. Will the vendor s implementation methodology get you up and running quickly? Research from Panorama Consulting Solutions finds that the average ERP implementation time for the manufacturing industry is 18.5 months (compared to 19.1 months across all industries). 2 Implementation for manufacturers costs an average of $11.4 million, which is higher than in all other industries ($9.8 million), due to the organizational complexity of manufacturing. 3 With these costs in mind, you need focus on what you re getting. The implementation of an IT solution requires very strong project management and a clear methodology that outlines project phases, milestones, and the roles of individuals during the implementation. In essence, the vendor you work with should be focused on reducing or outright eliminating the internal challenges and complexity of implementing a technology solution, so you can put the core functions of your new ERP system to use right away, without customizing or reconfiguring the system. Some factors to consider in a pre-configured system include: functionality, ease of use, business fit, industry fit, integration with your existing systems, and deployment options. 5. What is the total cost of ownership of your ERP system? According to the Gartner IT Glossary, Gartner defines total cost of ownership (TCO) as a comprehensive assessment of information technology (IT) or other costs across enterprise boundaries over time. For IT, TCO includes hardware and software acquisition, management and support, communications, end-user expenses and the opportunity cost of downtime, training and other productivity losses. 4 Lowering the TCO is about more than just lowering the initial buy-in price. It s about looking at ways to reduce the time and cost needed for implementation, training, support, and upgrades. Make sure you thoroughly check the benefits and costs that a new ERP system will incur over time, before signing your company up for something you may regret later. 4. Does the ERP system offer preconfigured solutions to get you up and running quickly? A new ERP system can be costly, which means the solution you choose needs to deliver benefits right out of the box. For an apparel, footwear, home textiles, or accessory company, a solution pre-configured for your specific industry needs should give you pre-built content you can use to rapidly create a solid business solution, while also delivering a variety of outputs, including training modules and operational dashboards. You need this kind of functionality so you can get up and running quickly. With that in mind, you need to focus on your business drivers and look for differentiators among the various ERP offerings. 4
6. Does the ERP vendor offer local services and support? The success of your ERP solution is not just about the software; it s about how you deploy it and how you use it. This is where a vendor with a strong industry focus, global support, a standard implementation methodology, and a preconfigured solution stands head-and-shoulders above the rest. If you have overseas operations today, or are planning to have them in the future, you need to be sure there s someone on the ground with the right experience to help you. Someone that speaks the local language, knows your ERP system in detail, and understands local issues such as financial regulations and tax rules. What to do now that you re ready Ultimately, the industry average age of an ERP system can fall from anywhere from 7 to 20+ years old which means this investment is for the long-term. So, to ensure your investment is secure, you need to invest in up-to-date, flexible, industry-standard technology. And, you need a partner that s investing in the development of software specifically for your industry. In the end, make sure any decision you make is low risk. After all, this will impact your company s future. So choose a system that delivers value with a low TCO over its lifetime. And be sure the ERP system you choose is easy to use, based on the latest technology, and deployed by experts in a controlled and managed way. 7. Does the vendor have solid customer references in your industry? Be absolutely sure that the vendors you re evaluating have delivered software and successful projects to other companies in your industry. The vendor you select should work with companies that are of a similar size to yours, as well as companies with a similar business model, which have serviced either your segment, or one with a very similar set of requirements. You should feel confident in the people who have developed your solution. And, you should feel satisfied with their ability to implement the solution efficiently, on time, and within budget. Find out what existing customers have to say. Going beyond those references, find out the word on the street by visiting review sites and social media networks. You can also use social media to get an idea of how a vendor approaches customer service. 5
1 Anwen Robinson, Business Change Could Render Your ERP Useless, Business Computing World, May 8, 2013. 2 Panorama Consulting Solutions, The 2014 Manufacturing ERP Report, 2013, pg. 4. 3 Panorama, pg 7. 4 Gartner IT Glossary, Total Cost of Ownership (TCO), Gartner (http://www.gartner.com/it-glossary/total-cost-of-ownership-tco), 2013. Share this : Copyright 2014 Infor. All rights reserved. The word and design marks set forth herein are trademarks and/or registered trademarks of Infor and/or related affiliates and subsidiaries. All other trademarks listed herein are the property of their respective owners. www.infor.com. 641 Avenue of the Americas, New York, NY 10011 INFDTP1453807-en-US-1114-1 6