Why ERP is one of the most important decisions you'll ever make

Meryl Malcomess

In these businesses, ERP systems are primarily perceived as "large" solutions that are expensive and time-consuming to purchase and deploy. For big businesses, not realising the benefits of effectively using the right ERP platform usually means the difference between mediocre and exceptional performance. In smaller businesses, the difference is often between surviving or not.

In order to grow the economy and create jobs in South Africa and Africa at large, it is essential that small businesses - which constitute the engine room of our economy - are aware of all the options open to them to make them and their operations more efficient and effective.

The single most important business decision

Choosing an ERP solution is a decision that impacts on every aspect of a business. In fact, from a systems perspective, it is the single most important business decision there is. It is at the very heart of the business and choosing an ERP solution essentially comes down to scaling and optimisation, but more importantly the trust and relationship you have with the vendor.

Getting this decision right will make what is a very challenging process a lot simpler. Getting this decision wrong means all the difficulties in your business will multiply and the full potential of your business will be very difficult to realise. With this in mind, there are important factors all businesses must take into consideration when choosing the right ERP solution:

• Start with the end in mind: Understand exactly how your business' processes fit together across all business units. Too often decision makers get distracted by the "vision sell" and go beyond selecting what is actually fit for the desired purpose. There is a desire to buy bigger than needed, just in case. Making a decision this way inevitably means buying the dream and paying too much, instead of solving the problem.

  When the right ERP solution is implemented to support a business' unique processes, that business is enabled to function faster and more efficiently. Transactional information is recorded, stored and made available for valuable analysis. It is this information that enables a business to optimise operational processes to support and realise its long-term vision for growth;

• Be objective: The South African ERP market is more sentiment driven than it is objective. People tend to develop strong perceptions of what value solutions can deliver based on anecdotal feedback and, once in place, these perceptions are hard to shift.

  The market is tight and businesses cannot afford to make emotional decisions and remain competitive in both the local and global markets. If the platform is not driving efficiencies within the business and showing a clear ROI, this is a strong indicator that the evaluation process was not objective;

• Get out of your comfort zone: Often the decision of which ERP platform to purchase hinges on past experience or knowledge - usually leading people simply to go with what they know rather than considering what is really in the best interest of the business. IT allegiance to one vendor or one particular technology can have the knock-on effect of creating fear of change. Employees may fear losing their jobs or having to learn entirely new technology.

  ERP forces disciplined business processes and removes some of the old "flexibilities" that some employees may have become accustomed to. Don't be swayed by resistance to change. Keep an open mind and avoid staying in your comfort zone without thinking of the bigger picture;

• Get the right fit: Business fit is one of the - if not the most - important factors when it comes to choosing an ERP solution. The right ERP fit will save money down the line. For smaller businesses, it is best to start with a simple ERP solution and grow the use of functionality as the business grows. This doesn't mean choosing the simplest solution, but rather choosing a solution that can be rolled out in phases with the right functionality at the right time.

  Consider how sophisticated and experienced the potential users are. Ease of use and ease of learning are two of the biggest barriers to effective implementation of ERP, so always keep the user in mind when choosing a solution.

• Listen to word of mouth: Another key aspect of business fit is finding a solution that offers the right kind of local support. Explore whether your vendor can adequately support your needs in your specific market and industry.

  Talking to other users of an ERP solution really matters when it comes to selecting the right platform for your business. They will give you insight into the real experience; balancing the "vendor sold" experience and helping you make an informed decision;

• Commit to growth: ERP removes the strain of manual administrative tasks by automating them and, in so doing, frees up valuable resources by streamlining and keeping business processes simple. Consider a business without ERP - it is continually busy trying to keep up with orders and trying to match procurement with manufacturing and sales demand. There is nothing but spreadsheets, paperwork and internal knowledge to help the business grow.
  On the other hand, consider a business with ERP - demand management is completed using analysis on current and past data using researched methods and algorithms not only to help inform, but also to optimise what used to be a very difficult task. The full integration of all internal systems will result in a centralised business model.

At the end of the day, it is growth, efficiency and peace of mind that are the drivers of a decision to purchase ERP. If a business doesn't want to achieve these goals, it can forgo moving to an ERP system - but its business will likely fade away in the process.