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ERP can seem overwhelming to a small business person. For those willing to work through the issues, however, the approach can reduce costs significantly. Here are five key steps.
Use SaaS For Enterprise Resource Planning
Enterprise Resource Planning (ERP) is a powerful enabling technology. It can help small to midsize businesses (SMBs) streamline their business processes and reduce operational costs by automating and integrating supply chain processes from front-end order entry, through purchasing, engineering, manufacturing, and order fulfillment.
Yet industry analyst research reveals that smaller companies often fail to utilize the broad and deep functionality of ERP. As a result, they typically experience higher total cost of ownership (TCO), while not realizing the business value expected from their IT investment.
For many SMBs, the whole idea of migrating to a fully integrated system can be overwhelming. It would seem to involve too many confusing choices, too much time and cost, and far too much complexity. This article aims to provide a few practical guidelines to help SMBs successfully navigate the selection, implementation and utilization of an ERP solution designed to achieve greater operational and financial benefits – with minimum expense and risk.
Step One: Consider the SaaS delivery model. High-speed Internet technology has changed the landscape for software implementation and maintenance. Just as cable service providers deliver entertainment “on-demand,” software service providers can now seamlessly deliver software applications right to desktop PCs and laptops through a web browser.
Selecting a Web-based ERP solution built on the Software as a Service (SaaS) delivery model makes good business sense for SMBs looking to overcome the cost and complexity of implementing an enterprise-wide system.
The SaaS model allows SMBs to overcome the entry obstacles traditionally associated with ERP: high licensing costs, lengthy implementations, business disruption and IT complexity. Monthly fees are predictable, and implementation and maintenance are faster and easier – a major consideration for companies with limited IT resources. SaaS provides users with the ease of “plug-and-play” only without wires or manual software installations. It delivers maximum value with minimum risk.
Step two: Be sure the ERP application suite fits your business. An important selection guideline is to ensure the ERP application suite has the functionality required, as well as the flexibility and scalability to grow and evolve as the company does. SMBs need to carefully assess the application’s capabilities to avoid the risk of getting stuck with the functional limitations of ‘ERP Lite’ – or worse, having business processes slowed down by a complex ERP system designed for large global companies. Look for an end-to-end suite of applications capable of streamlining and integrating all your business processes, as well as the ability to handle multi-site and multi-currency transactions.
Vendor evaluation is also important. With limited financial and IT resources, SMBs need to work with a trusted technology partner having deep industry experience and a track record of successful ERP implementations. Look closely at how the vendor will deliver and maintain the solution. Not all SaaS ERP vendors offer the same terms and agreements. Key factors to examine include:
• Initial and ongoing fee structures
• Implementation timeframe and methodology
• Project management and user training
• Vendor responsibilities during implementation, go-live and post-implementation support
• Ongoing system maintenance, upgrades and technical service
Step Three: Rely on the expertise of the technology partner. Once you have a technology vendor qualified to provide expert advice and guidance based on industry best practices and knowledge of your industry, listen to and trust the counsel provided. The partner should be available to work with your team every step of the way – from pre-sales, through software configuration, implementation and go-live, to ongoing maintenance and technical support.
The latter is another advantage of the SaaS delivery model: To retain your business, the software vendor must be accountable and continue to be fully invested in the success of your ERP solution. This is the foundation for building a true long-term partnership.
Step Four: Prepare the company and project team. In selecting and implementing the ERP solution, be sure to involve functional managers and business process owners – not just top management and IT – right at the start. Project team members should represent the entire range of processes that will be affected because their "buy-in" is critical to success.
Guided by the technology partner, the internal project team should define the processes and make any adjustments required to fully leverage the solution’s capabilities. Picking and choosing ‘parts and pieces’ of the ERP solution to implement is one reason why SMBs fail to realize the value they seek. An end-to-end integrated ERP system is built to function with maximum efficiency and effectiveness when it is truly implemented end-to-end.
Step five: Carefully evaluate the technology infrastructure. One major obstacle SMBs may confront in choosing a SaaS ERP solution is their reluctance to entrust their enterprise data to an outside source. The key to overcoming this hurdle is to insist that the vendor provide full information and transparency regarding the technology infrastructure in which the data will reside and be maintained.
In evaluating the data center and technology platform, look for:
• Security – Evidence that data is secured through redundant protection of the physical facility and the data store
• Accessibility and Uptime – Maximum uptime (near 100 percent) and anytime/anywhere access to authorized users, backed by a Service Level Agreement
• Technology Upgrades, Scalability and System Maintenance – The ability to handle growth, remedy performance glitches, and deliver upgrades in real time
• Storage, Back-Up, Disaster Recovery – Unlimited, perpetual storage capacity and comprehensive disaster recovery plan with redundant backup for client data
The result is maximum value with minimum risk. To implement SaaS ERP, there is no software to license and maintain, no hardware infrastructure to build, no IT staff to maintain, and minimal disruption to business operations. That’s why a well-designed SaaS ERP system can be a practical and cost-effective choice to help SMBs become more competitive, gain greater visibility, and reduce operational costs.
Once you have a technology vendor qualified to provide expert advice and guidance based on industry best practices and knowledge of your industry, listen to and trust the counsel provided. The partner should be available to work with your team every step of the way – from pre-sales, through software configuration, implementation and go-live, to ongoing maintenance and technical support.
The latter is another advantage of the SaaS delivery model: To retain your business, the software vendor must be accountable and continue to be fully invested in the success of your ERP solution. This is the foundation for building a true long-term partnership.
Step Four: Prepare the company and project team. In selecting and implementing the ERP solution, be sure to involve functional managers and business process owners – not just top management and IT – right at the start. Project team members should represent the entire range of processes that will be affected because their "buy-in" is critical to success.
Guided by the technology partner, the internal project team should define the processes and make any adjustments required to fully leverage the solution’s capabilities. Picking and choosing ‘parts and pieces’ of the ERP solution to implement is one reason why SMBs fail to realize the value they seek. An end-to-end integrated ERP system is built to function with maximum efficiency and effectiveness when it is truly implemented end-to-end.
Step five: Carefully evaluate the technology infrastructure. One major obstacle SMBs may confront in choosing a SaaS ERP solution is their reluctance to entrust their enterprise data to an outside source. The key to overcoming this hurdle is to insist that the vendor provide full information and transparency regarding the technology infrastructure in which the data will reside and be maintained.
In evaluating the data center and technology platform, look for:
• Security – Evidence that data is secured through redundant protection of the physical facility and the data store
• Accessibility and Uptime – Maximum uptime (near 100 percent) and anytime/anywhere access to authorized users, backed by a Service Level Agreement
• Technology Upgrades, Scalability and System Maintenance – The ability to handle growth, remedy performance glitches, and deliver upgrades in real time
• Storage, Back-Up, Disaster Recovery – Unlimited, perpetual storage capacity and comprehensive disaster recovery plan with redundant backup for client data
The result is maximum value with minimum risk. To implement SaaS ERP, there is no software to license and maintain, no hardware infrastructure to build, no IT staff to maintain, and minimal disruption to business operations. That’s why a well-designed SaaS ERP system can be a practical and cost-effective choice to help SMBs become more competitive, gain greater visibility, and reduce operational costs.
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