Get some business backbone! The ERP (Enterprise Resource Planning) software you choose will be the digital backbone of your business. You'd take the time to do your research if you could choose your own backbone, so do the same for your business. The ERP software you choose will be the backbone of your business.
What does an ERP do?
Your human backbone keeps you upright — but what does your business backbone do?
An ERP serves as a comprehensive back-end organizing solution, providing a central hub for most key elements of a company's information.
What does this mean in the real world? Imagine you need insight into how the business is performing. If you ask the head of each department for a report, you’re likely to receive biased information. This will leave you unclear where the company’s true strengths and weaknesses lie. An ERP, on the other hand, will give you unbiased clarity.
Insights an ERP can provide include:
- What has sold and the margin
- Cash flow
- Inventory
- Payables
- Receivables
- Income statements
Overall benefits of using an ERP include:
- Reduces employee task repetition and project overlap
- Provides a centralized database for interdepartmental information
- Increases efficiency in resource allocation
- Integrates financial, purchase order and customer order information
- Helps reduce inventory
- Standardizes operations processes and information
NuORDER Systems Engineer Tamara Spiegel speaks with hundreds of brands about their ERPs, and sees some common points that come up:
- Cloud technology
- Level of customization
- Brand size and vertical
- Clean data
- Bulk changes
- Integration with other systems
- User interface
- Training and support
Cloud or not
Cloud-based ERPs are the newer choice over locally deployed desktop software. Cloud-based ERPs often have API integration capabilities and might have plug-ins and integrations easily available.
Ian Laughead from fashion-industry specific ERP software company ApparelMagic talks about the importance of cloud technology: "Today, the cloud is big news in every industry. With the on-the-go spirit of today’s fashion companies, cloud technology is a no-brainer. Switching from desktop to mobile to browser interfaces is not only helpful — it will change the way you can do business."
Mark Burstein, President of Sales, Marketing and R&D at NGC Software, a global software company specializing in ERP solutions, emphasizes the cloud-or-not decision, stating, “One essential decision is whether to select a traditional ERP with on-site software or a SaaS (Software as a Service) system delivered on the cloud.”
Level of customization
When it comes to the flexibility to customize an ERP, Spiegel advises there is a balance that brands need to find based upon their specific needs. She says, "Some systems are less customizable (and usually therefore lower in cost), while others offer more flexibility."
Citing her experience speaking with brands about their ERPs, Spiegel continues, "Every brand has different needs. A more standardized 'out-of-the-box' system might not do every single thing you want but can be cost effective and simple to use. A fully customized system can take more time, planning, training and development costs to implement. It's all about finding the right fit for your business."
Brand size and vertical
ERPs are often geared towards a certain type of brand, whether it's size (e.g. small brands upgrading from QuickBooks, medium-size brands starting to gain a market foothold or large global brands) or vertical.
NuORDER CEO Heath Wells stresses the importance of partnering with an ERP that’s in line with your company’s size, stating: “Choosing a global, brand-name ERP will require you have the team to manage it.”
"Choosing a global, brand-name ERP will require you have the team to manage it.
- Heath Wells, NuORDER
Burstein emphasizes the need to choose by vertical: “Be sure to select an ERP solution that is specifically designed for your industry, such as fashion / consumer goods. This will save substantially on overall cost and implementation time, and will ensure the ERP has the capabilities you need.”
“Be sure to select an ERP solution that is specifically designed for your industry."
MARK BURSTEIN, NGC SOFTWARE
Clean the data
When handling integrations, Spiegel often encounters data issues. She advises, "With any ERP, it's important to keep your data clean! Data cleanup can be a daunting task, but it's vital to any efficient and well-organized business. If you are just getting set up with a new ERP, it's worth investing time to ensure you're starting with clean data."
When it comes to data, Laughead warns, "The most important thing is to make sure your data is exportable. What use is your data if, in a year’s time, it’s stuck in an outdated, under-serviced system you can’t afford to maintain? Your data belongs to your business, so make sure you get to keep it."
"The most important thing is to make sure your data is exportable."
- Ian Laughead, ApparelMagic
Bulk changes
Does the ERP allow you to easily make changes in bulk? You don’t want your employees spending valuable time manually changing data because your ERP does not offer a bulk-change feature.
Integrates with other systems
How will the ERP interact with other systems in your business? Be sure your present solutions will integrate before making any commitments.
User interface
According to Spiegel, when shopping ERPs, it's important to ask yourself, "Is it visually appealing and intuitive to use?" If it's not aesthetically pleasing, intuitive and user-friendly, employee adoption of the new system can be difficult.
Spiegel adds that, in her experience, "When the interface is clunky, users get frustrated. People use digital apps on a daily basis and that raises the bar on what they expect out of a software system."
Training and support
It sounds obvious to say that a system is useless if it’s not being used. But failure to adopt is often a result of employees not having a firm grasp on how to use it.
Laughead says, “It’s easy to be short-sighted when making a decision on apparel software. But keep in mind once you’ve chosen your solution, the most important thing is if you can use it.”
Laughead suggests asking the following questions of any ERP you are considering:
- How much is training and support?
- Did they forget to mention training was extra?
- Do they have live support?
- Do they have a sturdy support center, with a knowledge base, videos, and online learning?
Laughead says these questions must be “on your mind before your purchase.” He’s adamant that if not addressed, these issues “will come to the forefront as soon as you need to use your system.”
Cost
This is an obvious factor. But, there are specific aspects of cost to take into consideration.
When it comes to apparel solutions, Laughead warns to “Watch out for apparel solutions that force you to sink so much money into them up front that you’re trapped with your purchase. Those that have been lured in can relate to Shakespeare’s Macbeth who was so steeped in blood, he could not go back.”
To avoid a software Shakespearean tragedy, Laughead advises to "look for transparency and accountability." He advises to ask the ERP provider if "their pricing is upfront, or do they look at your budget before giving out any real numbers?"
Laughead also warns, “With some providers, you’d need a pricing wizard to judge your final costs. Make sure you get firm costs before you make any commitments, and take any reluctance the provider has to giving you those numbers as a warning sign.”
Additionally, Laughead says it's important to "know what extra costs might exist in the future" and to be aware that "some providers traffic in bait-and-switch fees with extra maintenance and training costs that come from nowhere."
[TWEETBLOCK text="Tweet this"]"Some providers traffic in bait-and-switch fees with extra maintenance and training costs that come from nowhere."
- Ian Laughead, ApparelMagic[/TWEETBLOCK]
Give it time
Spiegel wants brands to know that "implementing a new ERP usually takes longer than you think it will." She also advises that a brand should wait until they’ve finalized implementing an ERP before they start integration with another system, stating: "Even after you go live with the ERP, there will often be some fine-tuning that impacts the way your other systems (like NuORDER) need to connect. It's best to get your foundation rock-solid before you start building on top of it."
[TWEETBLOCK text="Tweet this"]"Implementing a new ERP usually takes longer than you think it will."
- Tamara Spiegel, NuORDER[/TWEETBLOCK]
ERP committee
With those common pain points in mind, some suggest putting together an internal ERP committee with a representative from each of your company’s departments. The committee will be responsible for choosing the best ERP for the company, based on the collective needs and concerns of each department.
When evaluating options, Laughead says to be aware that “there are a lot of so-called rating companies that are simply pay-to-play advertising and promote on who is paying for their listing or referral services." He advises to ask yourself, “Is the person recommending the software getting something in return?”
[TWEETBLOCK text="Tweet this"]“Is the person recommending the software getting something in return?”
- Ian Laughead, ApparelMagic[/TWEETBLOCK]
Laughead continues, "First and foremost, ask yourself how many customers are using the ERP successfully. If a company claims to have a lot of clients or resources, check how many actually appear on their website."
Additionally, Laughead suggests asking the following questions:
- Does the company have reviews with first and last names and real companies for accountability?
- Do they have a client list on their website? If not, ask yourself why.
- Do they have a sufficient customer base, or are they afraid to let people know who is using their software?
Burstein suggests creating a checklist to ensure you have all the important aspects your business needs, such as:
- Industry specific
- Cloud based / Internet accessible
- Accounting
- Manufacturing/PLM (product lifecycle management)
- Pick and pack or shipping options
- CRM, sales history and customer notes
- Provide multiple ship-to addresses
- eCommerce integration capabilities
- Open API for third-party software
- Easy to learn
- Effective tech support
- Low maintenance
Questions for each department to consider:
Finance
- Is your financial reporting timely enough?
- Is your data up-to-date so you can properly perform billing and payments?
Inventory
- How often are there write-offs?
- Do you have accurate, real-time information on all inventories, including location and condition?
- Do you over-order just to be safe and get stuck with excess? Are you experiencing stock-outs?
IT
- Do you want your ERP system to be in-house or in the cloud?
- Are there internal or third-party systems to be integrated with the ERP?
Purchasing/production
- Is it a challenge to know what to order/produce and when?
- Are you operating on a combination of educated guesses and reacting to urgent situations?
Sales
- Does your team have the information from other departments the need to sell well?
- Do you need your data to be mobile-friendly?
- Are you able to efficiently create quotes and convert them to sales orders?
Trusted customers and suppliers
- Ask them for an honest assessment on what you do well and where you’re lacking.
- Are there issues they experience when doing business with you that they don't when dealing with other organizations?
Final thoughts
Laughead advises brands to “not settle for second best,” and that “there is a solution out there perfect for your brand.”
He also warns that “compromising on your dream system can wreak havoc on your work flow.” For those in the apparel industry, he poses the scenario: “Thinking of taking a gamble with a solution that’s not apparel specific? Imagine making two-dozen products for one style because you don’t have the capability to work with colors and sizes!”
We feel Spiegel sums it up perfectly: "The ERP is going to be the backbone of your business, so it’s worth taking the time to get it right!”
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