Food For Thought: What to Consider When Selecting ERP
2020 has been a challenging year. It’s fair to say, not many businesses will emerge into 2021 unscathed by the global pandemic. Those at the forefront have had to adapt in order to grow and, hopefully thrive, in an increasingly uncertain market place.
Those at the forefront of change are seizing the opportunity to make changes; to adapt; including reviewing and implementing their software estate. Potential ERP buyers have hundreds of solutions to choose from, all with wide ranging capabilities and in built industry standard processes. So what should you be considering if you’re thinking of ERP?
Consider the size of your business
Your business size (and budget) is typically one of the first things you should consider when looking at the ERP market place. Most ERP vendors will class their product as being fit for a certain business size or other – usually based on business turnover and/or employee numbers. For example SAP Business One and Sage solutions are typically a good fit for small businesses. For mid market businesses (circa £10m-250m turnover) you might prefer to consider a more robust product like NetSuite or Microsoft Dynamics. Enterprise software (for businesses £500m-£750m or higher) is typically SAP S4 HANNA, Oracle Cloud or Infor.
Consider what you need the software to do?
Each of the software vendors will have a natural fit when it comes to industry type; a personality if you will. SAP tends to fit well in a business with lots of compliance requirements – like manufacturing. SAP is quite an unyielding software (I’ll often tell people it’s “the SAP way, or no way”). This can work well if you require conformity for industry standards or for consistency. NetSuite on the other hand is very flexible and configurable which means it suits most industry standards well. NetSuite works hard for wholesale distribution, services businesses and software companies.
Something you should definitely consider, when reviewing software products, is where you want to be in five years time. The software should be better than “fit for purpose NOW”. It also needs to be flexible enough to cope with your business aspirations for the next five years as a minimum. Most business software contracts last a minimum of three years, typically longer. The average lifetime of a NetSuite client is 11 years. If the software is adaptable enough to grow with you, you won’t need to find a replacement for some time.
Large vendors such as Oracle or SAP will also have rapid growth and long term innovation plans. Larger vendors often also have complimentary offerings such as IoT and native applications to enhance user experience and fill any functionality gaps. A solution like NetSuite affords you the opportunity to procure third party SuiteApps, from partners like CloudTamers, which augment the standard software.
Consider why you’re making the move
There are many different reasons why businesses replace their software. The most common include:
- Your business is upscaling and needs a software to cope
- Your business is downscaling and your current software is too big and complex
- You want to move away from your legacy software (usually because you don’t like it, it isn’t fit for purpose, or you’ve become version locked)
- You simply need an upgrade
Most companies, especially in the time of Covid, find themselves in a position where they cannot afford to sit back and do nothing if they want to remain competitive in their space. Replacement of legacy systems remains the most common reason for a software search and select*
Legacy systems eventually fall short of requirements either in terms of the volume of data needing to be processed or the ability to analyse business in a more advanced way. For a business to gain competitive advantage, or at least keep up with their competitors, they need access to fast, accurate and real time analytics – the latter being handled particularly well with cloud based products such as SAP Business ByDesign or NetSuite (nearly 63%* of all ERP projects are cloud implementations).
Modern ERP systems are simply better at providing accurate and actionable analytics; something a business in 2021 simply cannot do without. That said, upgrades from legacy systems have decreased this year by 14%* This is typically because the legacy system has been so heavily customised as to make it hard to move. Another common reason for stagnation is the inability to move forward at board level. Before you make the move, consider why you are really doing it and whether new software will give you the competitive edge you need.
Companies who are making the move because they want competitive advantage, or are planning for rapid growth, will typically move to a bigger and “better” software (like a move from Sage Line 60 to NetSuite). Whereas companies who have become version locked or who suffer from software inertia are more likely to postpone the move.
Consider your approach and your partner
There are several different ways to approach a software implementation project. The most common are:
- Big Bang (a go-live with all functionality and all modules, all at once. Usually considered the speediest but riskiest approach)
- Phased Implementation (a case-by-case unlocking of functionality based on the business needs – useful if you are replacing several legacy systems. This approach takes longer but is generally less risky)
- Agile Implementation (more of a “sook-it-and-see” approach which enables you to take decisions throughout the implementation rather than signing off on software design at the start of the project)
- Hybrid (a mixture of the above where a small business unit might take a big bang approach, whilst the parent company takes a phased approach)
Regardless of your approach, you will need to review your implementation partner with as much care as your software. The success of your implementation will depend on your ability to work with your partners, to communicate and frankly, to get on. Focusing more on selecting the right software and less on the right partner is a common mistake and one which often lands companies in a danger zone.
Around 1/3 of CloudTamers implementation wins are NetSuite rescue projects.
“Having used a different partner to implement our NetSuite software, we commissioned CloudTamers to audit and assure it. It was an incredibly worthwhile exercise. Working with a knowledgeable and responsive team a comprehensive review has been undertaken and a detailed set of outputs created. We are now making several changes to our system which will release its full potential and allow us to maximise our experience. CloudTamers have always made themselves available throughout our NetSuite journey, I only wish we had formally engaged them sooner” : Matt Gascoigne Chief Operating Officer Socitm Advisory
Consider what’s important to you. Do you want someone local? Someone small and responsive? Are you looking for experience? Risk sharing? Someone to lead change-resistance from the front?
In any case, the “people” part of “people, process and systems” needs to be considered with the utmost of importance as your project will live or die by user acceptance and adoption. When it comes to choosing a partner, it is definitely not one size fits all. Spend some time making your selection in order to get it right, first time.
If you are considering a NetSuite implementation, CloudTamers is one of the UK’s longest standing partners. We have global implementation experience across multiple sectors. If you want to chat about our experience or get some impartial advice about the software, get in touch.
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Written by Emma Stewart – ERP Evangelist at CloudTamers Ltd
*35% (Panorama Consulting Group) 2020