When It's Time for A New ERP System
ERP Implementation and internal discussions about selecting a new ERP System seem to come up too often. The complaints about your current ERP System probably started a while ago. “The system is so slow; I can’t get anything done on time”. Just a few complaints initially, and they were pretty easy to dismiss. Over time, as the company has grown however, the complaints became more frequent, and more vigorous. “I would have had this report finished sooner, but the system is really difficult to work with”. Message received, the system needed an upgrade. The first thing most companies do is invest in more powerful hardware to run the system, and that seems to do the trick. For about six months. Then the complaints, and the excuses, are back.
Next there is usually a quick trip to the local software retailer, the old system gets upgraded to the “Enterprise” version, and the complaints drop off again. For a while, anyway. As the company grows, so do the problems and the complaints come back, and now they are coming from a larger number of the employees. The delays and the frustrations are causing significant pain. March 1st has arrived, and the previous year has still not been closed.
Next, you start to hear from the banker, the investors and the CPA, this system is completely inadequate for your company today. The time had come to change to something that can accommodate the growth of the company. This kind of solution is not going to come out of shrink wrapped box. The stakeholders in the company have been heard, the evidence has been reviewed and the conclusion is inescapable: it is now time to upgrade to a truly GAAP-compliant, ERP system. This is good news; recognizing the existence of a problem is the first, key step in solving it.
Step 2, more and more frequently, is to assign someone in the company to the task of researching suitable replacements for the old system. For most companies, this will begin with an internet search (which might have led you to this blog post). While this step is very important, it is very likely that at least one key step (and maybe more) has been short-changed or skipped entirely.
ERP Implementation: The Missing Steps
1. Build the Scorecard
Before the search for a replacement ERP system is started, it is critical to clearly define what the new system needs to provide. Before I can plan out my summer vacation using Google Maps, I need to know where I am going.
Start by listing the various attributes of your current system, and assign a grade to each one. The grading can be simple (pass or fail) or more detailed (from 1 to 3 for passing grades, and from -1 to -3 for failing grades). Incorporate all of the various complaints and excuses resulting from the old system, this is important feedback from the users. The result is a scorecard that can be used in evaluating potential replacements for the old system. At a minimum, the new ERP system must score at least as well as the old system, in every critical area. Scoring the old system, and the potential replacements, will allow you to identify those ERP candidates that are worth investigating further.
2. Establish the budget
Before beginning the search for the new ERP system, it is important to have a budget established, or at least a budget range in mind. It makes no sense at all to investigate an Oracle or SAP-type of system if your budget will only be $100,000 for everything, software, hardware and services. It is a lot of fun to window shop at the Porsche dealer, but my purchase will probably be down the street at the Toyota Dealer.
3. Deployment –To be in the Cloud or Not to be in the Cloud
You have heard the phrase “In the Cloud”, but do you really understand what is meant by it? DO you know the difference between Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS). Do you want to continue to host your own system on-premise, or does moving to hosted/cloud-based system make better long-term sense? Here again, the internet can provide a wealth of information, and should be able to help you determine which approach(es) to deploying the new ERP system need to be considered, or which can be dismissed from the beginning.
With these three key preliminary steps completed, it is time to begin the research phase, identifying potential candidates for your new ERP system. The search will also be quicker, because you have already identified how the various candidates will be graded, which potential solutions fit within the budget, and you know how you want to be able to deploy the new system.
Ask the experts at TMC which ERP System is right for you. We are a Microsoft Gold Certified Partner that offers Microsoft Dynamics GP, Dynamics NAV and Dynamics CRM. We are also a Certified NetSuite Solutions Provider. We have performed over 300 ERP Implementations and will give you our honest, no obligation opinion on what we feel is right for you at the time. It doesn't do TMC any good to take on a client that isn't a good fit for us, much less a good fit for you. So, give us a call at 310-559-3982 or fill out a Free Business Value Assessment here and let TMC take the stress and frustruation out of ERP Implementation.