Choosing to implement or replace an ERP system can be daunting, but it’s a decision that can benefit a company well into the future. As with any big change, there will be questions. At Reflex, we’ve encountered many common questions companies have before taking the ERP plunge, all of which are relevant to determining which software package and which software vendor is most suitable for the organization.
Below are some of the questions we encounter the most from companies considering ERP implementation. Have a question but don’t see it here? Feel free to email us and one of our solution experts can give you the advice you need.
What is ERP?
We hear this question very frequently and we believe companies should never be afraid to ask it. An enterprise resource planning (ERP) system is, simply put, comprehensive business software. There are tons of software applications out there that can help run a business, but there are much fewer ERP systems, simply because ERP software does it all. Rather than running different software packages for payroll, human resources, financials, customer relationship management, and more, ERP software offers one single solution that takes care of all departments and processes.
What’s the difference between an ERP system and multiple software applications?
We’ve all had to deal with information silos because of multiple kinds of software: creating an Excel file with information that must be re-entered into a cloud app, having to print invoices and POs, sending them for sign-off, and having to scan them back into the system. Managing mass amounts of information through multiple software systems can get messy and things can get left by the wayside.
A great ERP, on the other hand, offers full integration across all departments, so that information entered from one point is immediately available to users with access throughout the company. This helps reduce wait times and human error.
How long does an ERP take to implement?
The easiest answer to this question is that implementation times can vary depending on the size of the company, the number of functions required by the software, and the amount of customization needed. In our experience, though, our Reflex ERP generally takes from three to 12 months to implement.
We strongly recommend that companies take into consideration the degree of customization required when selecting a new ERP system. Extensive software customization can not only become very costly, it can delay the Go Live period of the software by a significant amount of time. At Reflex, we pride ourselves on offering a flexible and configurable software package that can be adjusted to meet many clients’ needs without extensive custom development—this helps ensure that our implementation timelines are met and that the project remains within the original projected budget.
How do I start deciding on an ERP?
Selecting an ERP system begins with looking inside the company, rather than immediately looking outwards for different software packages. What processes do you want to automate? How many users will need access to the software? What pain points are you looking to remedy?
It’s important to enter the ERP selection process with a firm understanding of your business needs and the primary functionality required from the software. This is called Business Process Management: identifying processes within the company that require improvement. The selected software solution should facilitate these process flows—a best-fit ERP solution is one that fits the needs of your company, rather than your company having to adapt to the software.
Again, mass amounts of customization are not ideal. The best fit is a solution that only requires minimal customization to meet the company’s needs out of the box.
Once the company has a solid understanding of its software needs, the next step is to research options. Which software packages offer the required functionality? What are their support levels like? Are they local? Do the vendors own their software or are they resellers? What is their implementation history like? For more in depth research, you can reach out to companies in similar industries currently using your potential ERP systems to ask about implementation times, whether there were any hidden costs, and how effective they’ve found the software.
How much is it going to cost?
Like implementation times, cost can vary depending on a number of factors. Every solution vendor has a different pricing model for software licensing, so it’s best to find one that offers options to suit your budget. Generally, the total cost of an ERP system is split between licensing costs and implementation services and it’s important to consider both when determining the overall budget for the project.
At Reflex, we offer two options for licensing—clients can either pay a one-time fee for ownership of the software and a yearly support and service fee going forward, or they can choose a yearly subscription model at a fraction of the one-time cost.
One thing to consider is the long-term cost of choosing a yearly or monthly subscription model. With many companies, it presents a lower upfront cost but can amount to well over the initial intended budget at the five or 10-year mark. At Reflex, we want to ensure that our clients experience the benefits of the Reflex solution without overcharging on licensing fees, which is why our yearly subscription model changes after three years—at three years, the client has paid the equivalent of the one-time ownership fee, so we then consider them owners of the software and they only have to pay the yearly support and service fee from that point on.
When shopping around for different solutions, it can be helpful to do a cost projection chart for the near and long-term future to determine how much the software is going to cost the company in the long run.
What kind of hosting do I need?
The two most common types of hosting for enterprise software are on-site or cloud hosting. Depending on the company’s IT infrastructure, they can choose to host the software directly within their own business or outsource it to a cloud service provider. There are benefits to both, although cloud hosting will always require a strong internet connection to avoid disruption caused by an unreliable ISP. You also need to consider whether you’d rather keep your data on-site or if you’re comfortable with it residing in the cloud.
What are the most important things to look for?
The main items to consider when selecting a new ERP system are functionality, total cost, support levels, and the age of the software (some systems are old, legacy software with a new interface, so beware). There are, however, several things that need to be considered to ensure you’re selecting a system that can grow with your company over the next 10 to 20 years.
Firstly: mobility. The world is mobile. If you run a company that requires employees to access the software in the field or remotely, you need a system that can offer that functionality.
Secondly: document management. Not only is the world mobile, but documents are increasingly digitized. A software system that provides full document management for digital files can put you leaps and bounds ahead of the competition.
Thirdly: analytics. Tracking, reporting, and business intelligence are key. Make sure your ERP system offers a built-in analytics app so that you can stay on top of trends and performance.
Choosing to implement an ERP system is a significant decision to make, so it’s best to stay informed about your needs and what software vendors have to offer. Feel free to browse our website to learn more about our next generation Reflex ERP or email us to chat with one of our solution experts about your specific needs and requirements.