Is an ERP system right for your business, and how to decide?

Often businesses reach a boiling point of complex data requirements and transitions.

Without integrated systems, decision-makers are left in the dark and have difficulty bringing together people, products, processes, and financial management. Typically, young and growing businesses depend on spreadsheets and custom-built databases to support their operations. This operating model works to an extent. However, as the company grows it becomes complex to maintain, prone to error and slow to generate reports.

So, how do the issues start?

As the business rallies for rapid growth, the wealth of information generated and ever-growing processes cause bottlenecks to stifle operations. In response to the chaos, people and spreadsheets are thrown at the bottlenecks to create workaround solutions. This works for a while, however, as the business grows the ratio of information and data processors increase. The pressure, lack of visibility and disorganisation result in additional roles being thrown into the mix as a measure to ensure customer satisfaction does not drop. With the increasing pressure and elaborate workflows, it can be difficult to determine when the right time is to switch to an integrated system. Whilst a business can still be profitable in chaos, it is not scalable, nor enjoyable for teams.  

Still not sure an ERP is right for you?

There are three simple questions that businesses can use to determine if it’s time to make the switch. Let’s walk through them:

1. Do you have software workarounds or over-engineered processes? Software workarounds and overcomplicated processes that result in the recruitment of spreadsheet wizards, database developers or data entry roles. The primary purpose is to transfer data from one spreadsheet or system to another.
2. Do you struggle with visibility and real-time data?Establishing a single source of information is impossible without an integrated system. You’ll often find information is lost or an unreasonable amount of time is dedicated to collating information.
3. Do you have duplicated and incorrect data streams?With no audit trail, data gets changed on purpose or by mistake. Unfortunately, when you collate multiple data streams, you’ve already lost time during this process and there will also be both known and unknown errors in the data.This makes decision making difficult, as more time is spent arguing if the data is right than on what the data is telling you.

Realistically, if you’re showing signs of one of the above symptoms, then it’s highly likely you’re actually experiencing all three, and just unaware of it. Rapidly growing businesses are able to succeed by being nimble. They’re able to adapt to market and customer demands. All of which requires the ability to make fast and accurate decisions. If your processes and data feel fragmented, then it’s time to consider ERP software.

What is ERP?

ERP systems bring together a 360-degree view of your business. Complete management of day-to-day activities which ensures end-to-end visibility across transactions and activities. From supply chain management, accounting, human resources, marketing, to risk and compliance management, ERP systems are used to streamline and collate multiple sources and eliminate duplication of data. The power lies with cross-departmental visibility, enabling business leaders to analyse scenarios, improve and automate processes. Sound too good to be true? It can be complicated to imagine one system can unify all information, so how do ERPs work?  

How ERPs work

To create the central database of unified information and data, ERP systems use modules to pull together and streamline all aspects of a business. In the image below, you’re able to see how the specific functions of a business such as financial management, customer relationship management (CRM), project and job accounting, order and supply management plug into one central hub of information.

How do ERP vendors charge for ERP modules?

There are a lot of variations to cost structure depending on the ERP vendor. Typically, ERP vendors will charge an upfront per user licence, whilst per-user, per-month or year basis are often the cost structure proposed by software-as-a-service (SaaS) vendors. Often there are core models such as finance which are included in the purchase whilst workforce management or human resources management may have additional costs. A good ERP vendor will be able to tailor bundles specific to your business’s industry. For example, retails may need the e-commerce platform whilst a manufacturer would use supply chain management.  

So, what are the next steps?

Deciding to implement an Enterprise Resource Planning (ERP) software for your business is a big decision, but with massive rewards. If you spend your time looking at spreadsheets, experience frequent frustrations with incorrect data and are feeling worried that customer service is being impacted, then your business needs an ERP…now. The cost of an ERP implementation for a small to medium-sized business can be less than two headcounts. To simplify the decision-making process, you’re faced with two choices:

1. Hire additional employees to fix problems and build arduous workarounds; or
2. Invest in a solution to support and grow your business with confidence.

To simplify the transition to ERP and maximise return on investment, businesses need to partner with a vendor who understands your business’s strategic vision. Choosing an ERP vendor will be a vital aspect of your discovery and deployment success. The team at Klugo are experts at scoping business requirements, implementation and providing complete support throughout the process. Our team will provide you with a technological assessment and provide a disciplined plan to unlock your operating potential. Schedule a call today with one of the experts at Klugo to empower your business and begin the journey of operational excellence.  

About Klugo

NetSuite + NextService

Klugo’s vision is to unlock the full operating potential of our customers to maximise the value of their business. We do this by helping our customers achieve operating excellence using NetSuite + NextService, the world-leading cloud ERP and FSM business platform for small-to-medium-sized businesses.

Feel free to call an expert in operational excellence today. Find out how cloud-based technology can support and quickly adapt to your growth strategies.