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By Bill Lyons
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
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