Considering new ERP software? Here are seven crucial steps you can take right now.
- Roger Pujol, CPIM, CSCP
- Nov 26, 2024
- 4 min read
Updated: Apr 22
If your business software is a decade old or older, it's wise to consider upgrading or replacing it. Although budget constraints, limited internal resources, or a heavy workload might not make this the ideal time for changes, you can still take numerous actions with your current setup or easily accessible tools to achieve immediate results.
An ERP project may span 12 to 24 months, beginning with a Business Process Assessment (BPA), a Request for Proposal (RFP), and concluding at the go-live phase. Thus, it is beneficial to begin organizing your current systems and planning for a new ERP software implementation ahead of time. Moreover, introducing a new ERP system demands significant effort from the company. Below are several steps to prepare for a future migration to a new ERP business software system.
1. Business Process Assessment (BPA)
Looking for a new or replacement Enterprise Resource Planning (ERP) business software system can be time-consuming and overwhelming. A significant initial step is to engage an independent ERP software consultant to perform a Business Process Assessment (BPA). This consultant will conduct interviews with stakeholders across all operational areas of your business to identify needs, requirements, inefficiencies, and opportunities. After determining the company's current and future needs, a list of appropriate ERP software vendors is compiled, demos are set up, and contracts are finalized. The consultant will continue to assist the customer throughout the implementation and go-live stages.
2. Information Technology (IT) Assessment
What is the current state of your Information Technology (IT) setup? If your hardware is current, there might be minimal need for changes. However, if your hardware is 5 to 8 years old or older, it might be time to consider an upgrade. Many businesses have focused on updating their ERP business software but have overlooked hardware improvements, leading to dissatisfaction with performance. Additionally, you should determine whether to implement it on-premises or in the cloud.
Areas to consider:
Servers
Switches
Printers (desktop and multi-function)
Scanners
Wireless network
Mobile devices
Backup & Restore
Security
3. Document Management
How are you currently handling the storage of your business documents? Many companies still rely on the traditional Explorer folder and file system, while others use physical file cabinets. A better solution you can immediately implement is a cloud-based Document Management System (DMS). This system allows documents such as vendor invoices, customer invoices, and HR files to be stored in the cloud and indexed for easy access from any device. Additionally, cloud-based document management systems are generally compatible with any ERP software, ensuring that your document management system will integrate with any ERP system you choose.
With a small initial investment, you can easily integrate these systems into your current setup and continue using them in the future. Common initial steps involve directly importing supplier invoices into your existing accounts payable systems, as well as managing purchase orders, packing slips, customer invoices, and other tasks.
4. Workflow Management
If you're operating an older system, you might not be familiar with workflow management. Workflows are made up of predefined steps in any business process. For example, handling a supplier invoice involves a series of actions before payment can be made. A workflow is set up for this task to ensure it is completed consistently in the same way each time. Additionally, approvals for specific dollar amounts or endorsements from the quality and purchasing departments might be required. As mentioned earlier, Document Management Systems typically include a workflow management solution. Integrating these can revitalize your existing ERP system.
5. Inventory Management
Evaluate your current inventory management practices and consider how you envision them evolving. For instance, do you monitor stock levels for reordering, safety stock, minimum/maximum thresholds, and ABC classifications? Establishing and inputting these values will be a worthwhile investment in your existing system and extremely beneficial for your new system.
6. Warehouse Organization
How organized is your warehouse? If you're considering implementing a new ERP system with handheld scanners and barcoding, it's vital to integrate a Warehouse Management System (WMS). For a WMS to be effective, it's important to have a well-organized and clearly labeled warehouse.
Areas that you can start working on immediately to become "WMS Ready" are;
A CAD layout of your warehouse.
Racking & bin locations are already defined.
Barcoded bin location labels.
Aisle and directional signage.
Barcoded Inventory labeling.
7. Data Standardization & Cleanup
Over time, you might have observed that the data in your current system has become chaotic and unstructured. This often results from staff changes or inconsistent user input. Developing a data standardization list for all fields in your database is advisable. For instance, should text be in uppercase, lowercase, or Proper Case? Are users inputting unsupported characters or symbols into your system? Creating a data standardization document will define how data should be entered into your system. This is crucial when importing your data into a new design and affects the appearance of your reporting output. Check out our post on ERP Data Standardization for tips and a worksheet.
Summary
Transitioning to a new ERP system demands significant company resources and engagement. Although a "perfect time" rarely exists, evaluating your current circumstances can save time and cost. We assist companies in preparing for new ERP business software implementation by serving as project advocates on your behalf.
Contact us for more details.
Roger Pujol is a business improvement consultant and the founder of Champion Business Solutions, LLC. He speaks and writes about encounters, helping small to medium-sized businesses (SMBs) improve their business operations.
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