Why how you implement software could be more important than the software itself

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Upgrading your business software is a big decision. Particularly for smaller businesses, who are likely making a big investment in the hopes it will boost their capabilities, operations and – ultimately – profits.

A lot of research goes into choosing the software that will be right for your business – finding the right functionality at the right price point. Hours and hours can go into one single software choice.

But how long do you spend thinking about how the software provider will help you implement this software?

The truth is, no matter how well a website, demo or salesperson has sold the functionality of a particular software to you, whether you actually achieve those capabilities comes down to how it’s set up to run in your business. I’m here to argue that software implementation is more important than the software itself.

It’s frighteningly easy to end up with software that doesn’t work for your business

There are around 200 ERP options on the market for small-medium sized businesses. And while they will all sit in different places on the functionality/price scale, when it comes down to it, they are all very similar in the features they offer.

What’s not similar is how they perform for different businesses.

Simply buying a certain software doesn’t guarantee you the functionality advertised. Just because it offers (for example) great inventory management, it’s the implementation, setup and preparation that actually determines whether great inventory management will actually be achievable after the go-live.

The results the software produces are not necessarily valuable if the inputs have not been qualified and understood to give a realistic output. A generic, unfit for purpose implementation and setup often results in:

  • Limited functionality
  • Minimal operational improvement (in some cases, it can even make it more difficult)
  • Spurious report results
  • Business decisions made based on false information.

Let’s look at an example. Say you use your new ERP to set up restocking to be based on sales quantity. By all reports, sales are going incredibly well and you’re frequently restocking. But your system hasn’t been set up to recognise the price differentiation between your stock pieces. What’s actually selling is small pieces with tiny margins.

These sales aren’t making you money – they might not even be covering operating costs. And because of generic software implementation, you’re not seeing the right data, so you’re not investing your capital in the right place. This ends up costing you sales and growth opportunities.

How does it happen and how do you stop it?

These sorts of events happen with a generic – or, “cookie-cutter” – implementation approach. This means that you’ll still get guidance about the software and how to use it, but it won’t account for your unique business needs, the way you operate, what specific outcomes you want to achieve or how the intricacies of your business might affect outcomes.

While the same software can be used for many businesses, that doesn’t mean all businesses are the same. Today’s best ERPs are made to be flexible but “the flex” needs to happen during the setup process.

To ensure this happens, you want to make sure that the software setup and training processes include information specific to your business, including:

  • How the software works
  • How to use it to achieve your desired results
  • What parts might not be suited to your business
  • Any changes you will be required to make to your current processes.

For example, sometimes with systems changeover sometimes comes a change in accounting processes, requiring businesses to change from cash accounting to accrual accounting. This needs to be adequately explained to and understood by business accountants before going live.

Weigh up the effort and the outcome

While ending up with a “cookie-cutter” implementation is unfortunately quite common, making sure you get the bespoke, value-added setup doesn’t need to be difficult. To ensure you’re getting a business-specific service and the best chance to get the most out of your ERP investment:

  • Find a provider that can meet you in the middle. No one knows your business like you do and no one knows ERP like an ERP provider. So, you need to find a provider who can offer common ground – someone who will learn your business and guide implementation accordingly.
  • Be wary of any provider that doesn’t offer a chat with a real person before you commit. You want to be able to ask questions – and they should want to ask questions about your business, too.
  • Don’t base choice purely on price. Offering an impersonal, one-size-fits-all approach is one way that providers keep their costs down. But you’ll often end up paying what you’ve saved (and then some) elsewhere. Pay slightly less for the implementation and you’ll pay more later through poor functionality, time wasted on support hotlines and slow ROI.
  • Focus on the data. This is what drives your ERP. When switching from one system to another, you want to make sure you have the right data in the right place and make sure it’s delivering the right results – before you go live. The right provider should have a system in place to help you with this.

At Key Business Solutions, we offer clients incredible functionality and innovation through SAP Business One. But – more than that – we offer our experience and understanding, discussing what your business actually is and what you aim to achieve. We’ll then use that information to ensure the best use of the software.

If you want more information on what to expect or ask for when it comes to ERP selection and implementation, contact me on (02) 9648 3383 or at deryc@keybusinesssolutions.com.au.

About the Author: Deryc Turner

Deryc Turner

Deryc Turner has a degree in Economics from Sydney University and is a Fellow of the Australian CPA's. Since 1994 he has been advising small and medium businesses on how to maximize the value of their information systems to gain an unfair advantage over their competition

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