Growing business? How your first ERP project can also be your last
By Taryn Cromie, sales manager of HansaWorld South Africa.
When your growing company reaches a certain size, the time comes to consider implementing more sophisticated systems for management and control. Just where that inflection point lies differs from one company to another, but the answer to managing growing organisational complexity is generally a fully sufficient and integrated enterprise resource planning (ERP) solution. By making a careful choice of software for your first ERP implementation, it could also be your last.
That's according to Taryn Cromie, sales manager of HansaWorld South Africa.
"That's because the selection of an ERP solution capable of meeting the needs of a relatively young, growing business, yet which is capable of scaling to a 500-plus employee concern, will mean your system can grow seamlessly with the organisation," she says.
Cromie points out that ERP software provides a broad range of integrated functions, while introducing best practices across a number of disciplines. "Typically, the first-time ERP implementation will require core financial modules, stock management and sales," she says.
These modules often replace previously disparate or limited products, such as spreadsheets, or an accounting system that has reached the limits of its capability. The ERP system is typically built on a central database and allows for the easy exchange of information between various modules, while also facilitating the exchange of data with external systems (such as those of partners or clients), or the extraction of data for reporting and intelligence purposes.
Implementing a 'starter' ERP can be done in as little as a few days, continues Cromie. "The company owner looking at a first-time ERP solution typically has a business that hasn't yet reached a level of complexity that would require a project of any significant duration," she notes.
She states clearly that the myth of the 'ERP project with no end' has no place at this level.
With the implementation of a suitable system, she says growth should be further spurred by the ability to manage the business better - after all, that is often among the key purposes of the ERP project in the first place. "As that growth takes off, the system should be able to grow and expand along with the company. The 'basic' groundwork of the ERP system should scale. The general ledger, for example, which may have originally catered for a business with perhaps five or 10 employees, should scale all the way with the business to cater for 400 or 500 employees."
And as the business grows in complexity, scale and variety, the ERP system should provide for the addition of any one of a number of modules and tasks. These can include production, customer relationship management, business intelligence, warehousing and job costing, and many more.
"The system should also provide for easy extensibility, so it can be rolled out to new branches; it should provide multi-currency support, especially pertinent in sub-Saharan Africa where expansion into neighbouring countries is likely for many businesses; and it should provide for remote access and management, such as through smartphones and tablets," Cromie continues.
A further criterion that Cromie says is a critical deciding factor is platform independence. "Even if all your workers today are on Windows, a growing company may introduce a department using Apple or Linux machines; there is also the noted trend of 'bring your own device', so you want a system that won't limit your options in terms of operating systems."
While advocating that ambitious business owners should start with ERP as soon as they can, and so position themselves for growth with better management tools, she stresses that the decision should be made with an eye on the 'future perfect' - and also 'not so perfect'. "You want your first system to be your last, because changing from one ERP to another can be stressful, time-consuming and even fraught with risks that could shut your business down. A poor fit can be even more harmful if you have to choose different systems when rolling out internationally, just because your initial system can't expand to neighbouring countries," she says.
The ability to scale up should also be matched by an ability to scale down just as easily, delivering the flexibility in business systems to match the unpredictable nature of the macro-economy.
"You don't want to reach a point where it is necessary to throw out the time, money and effort invested in an initial ERP system, only to spend it all over again on a new one. With the right choice, you buy once and keep growing," Cromie concludes.