ERP - Seven steps to success

by Zach Nelson, CEO and President, NetSuite

Be ready to adapt

When implementing any new business system its important not to simply continue doing things the same as you are currently doing them, otherwise the business wont benefit fully from the new application. Rather you should look at what is available in terms of best practices in the new system and determine which aspects of that make sense for your business and where you should apply tweaks to support what makes you different from your competitors. In all cases, the business should take the time to document their existing processes and identify where any gaps exist with the new system.

Keep the system secure

There are several software functions that can help maintain security. Look for capabilities such as an always-on audit trail that can track what changes were made, by who and when; the ability to strictly define roles such that individual users only have access to the information they need to do their jobs; and the ability to control from where specific users are able to access the system. And importantly, make sure your business dashboard shows you the metrics you need to measure your business. This way you can spot any unusual variations in the numbers and investigate them right away, rather than at the end of the quarter or year when it may be too late.

Recognise the importance of training

Training should never be under-estimated when considering a new system and the appropriate time and monetary budget should always be factored in to the process in order to ensure the success of the implementation. This is especially true for SMEs who simply cannot afford expensive, long-winded implementation cycles. They should look for an application that is pre-configured for standard usage in their industry and that has an intuitive user interface to help users get to grips with the new system as soon as possible.

Understand the costs involved

Traditional on-premise ERP systems can be very expensive due to the total cost not being reflected in the software license - its just the tip of the iceberg. In addition to this there is the cost of the hardware, database and operating system infrastructure required to run the applications along with the cost of employing database and application administrators to maintain the application. On top of that there is support and maintenance from each of the vendors, and thats even before you consider the implementation fees. With on-demand applications the total cost of running the application is reflected in the price quoted; theres no need for the business to manage the systems themselves, so all those related costs go away.

Secondly, implementing a system from scratch for every customer can be very expensive. That is why a number of vendors of industry-specific editions are pre-configured to meet the needs of those types of business. While there will inevitably be additional customisation that the business desires, each edition provides a jump-start thereby reducing the total cost of implementation considerably.

Avoid weak links

The weakest link problem, where inefficiency in one department affects other participants, is a common complaint with the traditional point solution approach to business applications. A one system architecture provides a single system to run the entire business from CRM to e-commerce as well as ERP. Everyone in the company has access to the application, and work from a single dataset with seamless workflows throughout the organisation - for example, the moment an order is accepted in Sales the Warehouse is notified to begin fulfilment, and once it has been shipped the Finance department immediately know to generate the invoice. This brings increased efficiency, accuracy and cost savings associated with integrating disparate systems along with the ability for management to have a complete view of the business in real-time on their dashboard. This approach removes any notion of a weakest link in the organisation.

Collaborate!

My experience has been that more and more businesses, particularly SMEs, understand that gaps between departments are sub-optimal to the success of the business overall. Personal battles over sharing sensitive data need to be overcome if the software is to function effectively. The collaborative nature of on-demand systems lends itself to helping to overcome such problems, by ensuring that departments can work together to achieve their shared objectives.

Ensure compatibility

Problems integrating new ERP software with existing legacy systems are best avoided. Look for systems that support industry standard integration technologies, like SOAP-based Web Services, XML, CSV, etc. Those that have, experience integrating with the types of system that are used in your extended environment are a good option. Better still, opt for an integrated business solution, one that includes CRM and e-commerce abilities. This will enable you to run your entire business from a single application.

Zach Nelson (pictured above right) is CEO and President of NetSuite, provider of integrated, on-demand business application software for small and midsize businesses.