How to Pick the Right ERP

Oct 25, 2024 | Listen

Allison Cummins and Kathy Svetina share how ERP implementation and change management can help small businesses in the Help, My Business is Growing podcast.

Small businesses often rely on various tools to manage operations, but what happens when these tools can no longer keep up with growth? Your business might face inefficiencies, lose important data, or miss out on opportunities.

ERP or Enterprise resource planning solutions can help by integrating and streamlining processes like inventory, customer service, and sales tracking. However, implementing ERP requires careful planning and you also need to manage the organizational change. 

So when is the right time to switch to an ERP system? What are some of the things you need to do to prepare? And how can you make sure your team is ready to make a change?

Allison Cummins: Project and Change Management Expert

In this episode, Allison Cummins and I discuss how ERP implementations can benefit your business by streamlining your operations. We share insights on when to make the switch, what are the costs involved and how you can prepare your team for the inevitable changes and guarantee a smooth transition for all. 



Timestamps for this week’s episode

03:28 When is the right time to consider an ERP system? 

09:49 Transitioning from smaller ERPs to larger ones  

15:53 Preparing data for ERP implementation 

29:44 Preparing staff for ERP implementation 

40:47 Actionable steps for starting the ERP process


When is the right time to consider an ERP system?

Here are three signs that it might be time to make the switch to an ERP solution:

Misaligned Departmental Operations
When your business reaches a size where different departments – such as marketing, finance, sales, supply chain, and HR – are operating in silos, you need a more integrated approach in your total operations. An ERP system connects all these functions under one unified platform, providing better insights and making sure everyone is on the same page across your entire business.

Increasing Process Delays
If you notice that routine processes, such as finance coordinating with procurement or sales aligning with logistics, are taking longer than they should, it’s a sign that your current systems are becoming inefficient. These delays can lead to missed opportunities and lost revenue, and is a clear sign that your business is outgrowing the initial “launch phase” systems that you initially set up.

Growing Transaction Volume
As your business grows, the volume of sales and other transactions will naturally increase. If your current systems struggle to manage this rising load, you’ll start seeing bottlenecks, errors, or even slowdowns in operations. This is when an ERP system can help streamline processes and keep your business running smoothly.

People will make or break any ERP solution implementation because most of the time, I'm gonna be honest, it's the lack of communication from the leadership teams.

Transitioning from smaller ERPs to larger ones

As your business grows even more, you might find that your current ERP system, like Odoo, can no longer keep up with your needs. Upgrading to a larger system such as NetSuite or SAP can offer more advanced features and greater scalability.

Smaller ERPs (e.g., Odoo)

  • Smaller ERPs are usually more user-friendly and intuitive, resembling a website interface that most users can easily figure out on their own.
  • These systems are designed to be managed in-house, with minimal need for external support. Basic training is usually enough for your internal teams to maintain the system.
  • Smaller ERPs are also more cost-effective, with prices around the $60,000 to $70,000, making them budget-friendly for smaller businesses.

Larger ERPs (e.g., NetSuite, SAP)

While smaller ERPs can support businesses up to a certain revenue (around $50 million to $75 million), larger ERPs are built to manage the demands of much larger corporations because they can provide a more holistic solution for continued growth.

You’ll enjoy advanced capabilities with bigger systems because they offer extensive configuration options and can handle more complex business processes.

Implementation and maintenance can get a little more complex; you’ll need specialized consultants to help you. It can also be a time-consuming process, sometimes taking up to two years, as seen in corporate environments transitioning from smaller systems like PeopleSoft to SAP.

“The messaging has to be consistent throughout. Oftentimes, the change, like the communication, is coming from leadership and then it gets like 1 level down and it just stops.” – Allison Cummins

Preparing data for ERP implementation

Properly preparing your data is what can make or break a successful ERP implementation. Allison recommends starting early to address data quality and to make sure the transition will be as seamless as possible for you and your team. 

1. Assess and Cleanse Your Data

  • Identify all the key data sets that are important including accounting records, sales data, customer information, product details, and vendor records.
  • Cleanse your data by removing duplicates, correcting inaccuracies, and consolidating records. For example, entries like “John Smith” and “Jonathan Smith” should be combined if they refer to the same person. Even if you have the best ERP system, if your data is bad, it won’t work out in the long run.

2. Data Preparation and Migration

  • Prepare your data for migration into your new system by reformatting it so that it is compatible with your ERP system. You might have to use templates provided by your ERP partner as well as convert data into spreadsheets or other required formats.
  • Make sure that you don’t miss anything and that all relevant data is accounted for, including hidden or overlooked sources like departmental spreadsheets or legacy systems. You need to integrate all of that information into your new ERP so there is continuity.
  • Give your team enough time and resources to handle all the data preparation. Let them know how data quality is very important and support them through the steps needed to maintain it throughout the migration process.

3. Types of Data to Include 

And all other operational data that you use in daily business processes, such as specific departmental manuals or resources and research documents.

Accounting data including financial records, ledgers, and transaction history.

Sales and customer data like customer profiles, purchase history, and sales orders.

Product and vendor data such as your inventory levels, supplier details, and procurement records.

Start documenting your business processes. That is the first step to really understand what your business does.

Preparing staff for ERP implementation

When rolling out an ERP system, getting your staff on board is important especially since they will be directly affected by all the changes. One way to do this is to create specific change management plans for each group – whether they’re in manufacturing, accounting, or customer service. This way it’s tailor-fit to what each group needs and having consistent messaging from you will also help keep everyone aligned.

Make sure you also offer different training methods since employees learn in different ways. Some prefer hands-on training, while others need visual aids or written instructions. Set up a sandbox environment for practice with real data before going live, so everyone gets comfortable with the new system.

Finally, take a look at your team members and identify and train “Super Users” who will become your go-to experts. They’ll test the system, train their colleagues, and also provide support during the transition. The rest of your employees will have someone familiar to turn to if they have any questions and concerns about the system.

Actionable steps for starting the ERP process

To begin the ERP process, start by documenting your business processes. You can do this by creating a simple flowchart or listing your current operations to identify any inefficiencies, manual tasks, or communication gaps. 

Once you have a clear picture of how your business functions, you can then take an objective look and assess if your current systems are lacking and if an ERP solution is what you really need. 

And you can do this immediately since it does not require any special or advanced tools —just paper, a pencil, and a bit of time. This information will help you research the ERP options that best match your needs and help you plan your next steps too.

Summary

  • Delays, rising transaction volumes, and siloed departments indicate the need for an ERP system.

  • As your business grows, you may need to upgrade from a smaller ERP like Odoo to a more robust system like NetSuite or SAP to handle advanced processes and scalability.

  • Early data cleansing and proper formatting are crucial for a smooth ERP migration.

  • Tailor change management and training to each department, and identify “Super Users” to ease the transition.

  • Begin by documenting your business processes to identify inefficiencies and determine if an ERP system is needed.

Transcript

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About guest – Allison Cummins

Founder and CEO 

Blue Outcomes

Allison Cummins is the founder and CEO of Blue Outcomes, a boutique consulting firm that specializes in Project and Change Management. Her methodical, analytic approach to technology and processes inspired her to launch Blue Outcomes in 2018. Allison is a trusted advisor for growing companies and is known for bringing transparency and accountability to business transformations. 

Website: https://blueoutcomes.com/

LinkedIn: https://www.linkedin.com/in/allisonecummins/

Email: allison@blueoutcomes.com


About host – Kathy Svetina

Kathy Svetina is a Fractional CFO for growing small businesses with $10M+ in annual revenue.

Clients hire her when they’re unsure about what’s going on in their finances, are stressed out by making financial decisions, or need to structure their finances to keep up with their growth.

She solves their nagging money mysteries and builds a financial structure with a tailored financial strategy. That way they can grow in a financially healthy and sustainable way.

Kathy is based in Chicago, IL and works with clients all over the US.

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