Transitioning from accounting software to ERP as your business grows

If we had the ability to see into the future, all entrepreneurs and business owners would be perfectly equipped to deal with the growing requirements of their businesses.

Unfortunately, this isn't the case, and in many examples, fast-growing companies are restricted by technology and support that was employed at the inception of the business. Gavin Halse, Director at Adapt IT, says it's a common problem in smaller businesses.

"Patching of accounting software happens in businesses that have grown substantially where the basic accounting program they started out with can't deal with the growing complexity of the business." Halse says when this happens, it is time to consider upgrading to an enterprise resource planning (ERP) system.

There are various scenarios that lead companies to consider upgrading to ERP. In some instances, an acquisition might have taken place in the organisation increasing business complexity and introducing multiple sites and expansion into new countries. Technology obsolescence is also a major issue as many companies upgraded their ERP in 2000 as part of the Y2K panic. These systems are now 12-years-old and are in desperate need of an upgrade. "Technological advancement renders some programs useless after a certain amount of time, serving as another prime example of systems that no longer support the business, regardless of company growth."

Halse says that while there are several mid-market ERP solutions available in South Africa, business owners and operators need to carefully select a solution that meets their specific criteria. "Adapt IT offers over 15 years' experience in the development and support of commercial ERP systems, and it's this type of know-how that your ERP partner needs to possess to suitably assess your business and guide you through the process."

Halse says Adapt IT works very closely with the international business management software behemoth, Sage, and uses its market-leading product, Sage ERP X3. According to Sage, businesses should consider the following three factors when selecting an ERP vendor:

1. Balance between functionality and complexity: The ability of an ERP vendor to simplify business processes without sacrificing system capabilities results in easier adoption of the system and more efficient business processes.

2. Scalability: Most companies plan for periods of rapid growth and the system needs to support this. The system also needs to cater for internal restructuring, which means that the system usage might double, or halve. A system that is scalable in both directions is a necessary enabler of business agility.

3. Cost of ownership: It has been reported that for every $1 spent on software licence, the total cost of ownership is upwards of $7. This ratio can be positively impacted if the implementation is well managed, scope is contained and an experienced support partner is used for post-implementation support and enhancements.

With clients that include successful mining companies, banks, higher education institutions and process manufacturing companies in South Africa, Halse says that Adapt IT has a vision for the future of ERP and business software. "We understand that the world of technology is changing rapidly and that mobile services and cloud computing are fundamentally changing possibilities in business. We invest in keeping ahead of this curve and advising our clients on strategic systems that are future-proof."