ERP Software Systems: Key Questions to Ask Before You Buy
Business Management Software: Get the most out of ERP software by asking these questions as you shop for the right solution.
By D.J. McKenna
Date Posted: 6/1/2017
While seriously considering an enterprise resource planning (ERP) system can be a major undertaking, software vendors say your implementation should go much more smoothly if you get answers to the following questions before you sign on the dotted line:
Does My Pallet Business Need an ERP System?
ERP systems are software that combine various key parts of your company under one database to streamline processes from sales and purchasing to inventory and plant operations to billing and delivery. An ERP system is like the master brain of your business providing great insight into your data and processes. Often, businesses begin to consider ERP systems when they realize that processes that once worked fine are beginning to break down. For example, manual processes once used for transmitting, organizing and storing data may begin to seem antiquated and counter-productive as a pallet business grows and orders pick up. Your old approach of using an Excel spreadsheet just doesn’t work with the increasing complexity of your business.
“In today’s business environment, there is no room for mistakes,” says Steve Miranda, executive vice president of applications development, Oracle. “Organizations that do not adopt modern best practices across all critical business functions will struggle to survive.”
How Important Is Upper Management Support When Choosing & Implementing a New ERP System?
Countless failed projects of any kind can often trace the roots of their failures back to the realization that upper management support for the project was never secured. Without upper management support, delays and inevitable unforeseen glitches can derail a project when upper management is simply unaware of the project’s priority.
One of the ERP systems developed just for the pallet industry is PalMate® ERP by Automated Machine Systems (AMS). Kevan Grinwis, vice president of AMS, said, “It is vitally important to have buy-in and support from all organizational levels when choosing an ERP system, from administration all the way to upper management.
Grinwis added, “We’ve seen many folks achieve success by assigning a point person who can navigate the conversation on many different organizational levels, understanding some of the smaller details while maintaining a big picture perspective.”
Everyone has to realize that there are things they will like and not like about any software transition. It won’t all be the same. But support from upper management can provide the impetus to make it happen. Once buy-in is achieved on multiple organizational levels, success is a no brainer since everyone’s interests are represented and no one is left out of the loop’
Do I Want a Cloud ERP or an On-site ERP System?
Cloud-based ERP systems enable a pallet-maker to hand off most — if not all — of their information technology (IT) needs to a third party whose entire business is maintaining and updating IT systems. Cloud-based ERP systems also relieve pallet-makers of the responsibility for securing their computer systems — a growing problem in today’s business world.
“Customers from around the world are using the cloud in incredible ways to accelerate and transform their business,” said Scott Guthrie, executive vice president, Microsoft Cloud and Enterprise. “It’s now possible for organizations to run their entire business in the cloud.”
But on the flip side, relinquishing control of your IT to a third party means you’re at the mercy of your provider’s customer support team. And you’ll also be forced to entrust your business data to a provider who may or may not share your zeal for keeping that data private.
How Much Customization Should I Allow for When Bringing in an ERP System?
One of the truisms of software purchasing: You should find a package that fits your business — rather than attempt to fit your business to a specific package.
That said, there’s a good chance that you may need to make some customizations to your ERP system. Keep in mind though that with every customization, you get further and further away from the standard product — something that may cause problems when the product upgrades, and you’re forced to redo all the customizations again once the new upgrade is in place.
PalMate’s Grinwis suggested, “If you’re going to pursue the possibility of customizing or enhancing an ERP system, it’s important to ask a few questions:
“(1) Is the feature that you’re talking about really a ‘hill to die on’ or is it something that requires only a slight business process change which will allow you to use the product as is?
“(2) Are there other ERP’s on the market that will give you the full range of capabilities that your team needs off the shelf without additional development cost?
“(3) Who will be responsible for supporting your customizations and enhancements when new releases of the software become available or when you decide to upgrade your operating system — or other software which integrates with your ERP?”
How Important Is Planning for Mobile with an ERP System?
Another ERP designed specifically for the pallet and sawmill industry is Pallet-Track® Mill Manager, which previously received an innovation award from the National Wooden Pallet & Container Association. Alan Miceli, president of Innovative Data Systems – the maker of Pallet-Track Suite of Products, said, “In today’s environment, mobile has become the preferred method of communication.” And as such, mobile may not be important now, but it is increasingly important for the future.
Adds Libby Koehn, a vice president at Sage, a maker of ERP software, “The blending of personal and business use of technology creates new challenges for enterprise. Employees want flexible access to the company data and workflows.”
Essentially, many of today’s workers expect to be able to use their smartphones, tablets and other devices while they’re on the job. Handled correctly, granting workers that option could save your pallet-making business thousands of dollars in the long run, given that your employees will be buying the mobile computerized devices, not you.
Just be sure that those devices are secured with in-house IT security software, which can ensure your company data is safe and also enable you to remotely erase data from a smartphone or tablet that has been lost by an employee.
How do I Evaluate the True Cost of a New ERP System?
The trick to estimating an ERP system’s true cost is to factor in all the ancillary aspects of an implementation, including hardware, data collection devices, training, customization, changing your business processes to fit the software.
On the flipside of that balance sheet are all the cost saving features an ERP system will bring to your pallet or sawmill business. “Most companies will get more data than they had before, which in turn will lead to more efficient operations,” explained Pallet-Track’s Miceli.
He asked, “For example… How much money does it cost a company to send someone out into the yard to see if they have product? That activity is replaced by viewing a product list or simply seeing inventory on-hand as you are placing an order.”
“Multiply that by ten times each day, your return is huge,” commented Miceli. “Same for producing product that you didn’t realize you had in-stock already or spending time on figuring out the proper products to load into a machine. How about knowing the true cost of your products so you can calculate your profit margins correctly.”
How Much Time Should I Allow to Implement an ERP System?
Some vendors recommend setting aside six to twelve months to roll out an ERP implementation. Others suggest an implementation can be put together much more quickly particularly if you already have lots of data that can easily be migrated to a new system.
“My answer is different for all companies,” explained Miceli. “But basically, if the ERP system is intuitive to your staff and you are committed to the implementation it shouldn’t take more than 30 days.
“If you are going to come back and forth to working with it, then it could take months.”
What’s the Best Way to Train My Staff on the New ERP System?
ERP system vendors advise that training is best-handled during the implementation phase – well before the system goes live. Ensuring you have employee ‘buy-in’ on the system before it goes live will also play a key role in ensuring use of the system gets off to a good start. Including employees in the testing and evaluation phase of the system also goes a long way toward getting the most out of everyday use of the system.
What Known Pitfalls Should I Avoid When Implementing an ERP System?
Most pitfalls can be avoided if you engage in good planning. You should fully vet your ERP vendor, get a complete understanding of features before you buy and ensure you have the right people on your implementation team from the start.
You’ll also want to invest in training, create a plan for decommissioning your legacy system, test the software with a full onslaught of data — rather than doing a few minor tests — and setting up a maintenance strategy ahead of time.
“Software support is a critical element,” said PalMate’s Grinwis. “Ask who will be available if things don’t seem to be working quite right. Ask about updates and how the software is continually supported to accommodate the fast paced growth of today’s technology. Consider whether or not the software that you’re choosing — and the company behind it — has the staying power to be around long enough for you to get your ROI.”
Here’s a representative sampling of ERP vendors to evaluate:
PALLET INDUSTRY SPECIFIC ERP VENDORS
• Pallet-Track® Mill Mangager (www.pallettrack.com): Awarded a Shared Vision — United Goals Award from the National Wooden Pallet & Container Association, Pallet-Track takes a customized approach to computerizing the systems of a pallet-manufacturer, from just-in-time inventory management to identifying production bottlenecks and optimizing delivery schedules.
• PalMate® (http://PalMateerp.com): A comprehensive ERP system, the PalMate software suite brings together sales orders, purchasing, production management, inventory control, dispatching, reporting and accounting. PalMate enables a pallet manufacturer to make informed decisions, while increasing the overall efficiency of operations.
GENERAL INDUSTRY ERP VENDORS
• Epicor ERP 10 (http://www.epicor.com)
• IFS ERP (http://www.ifsworld.com/us)
• Infor ERP (http://www.infor.com/company/solutiondemos/solutiondemos-erp)
• Microsoft Dynamics ERP (https://www.microsoft.com/en-us/dynamics365)
• Oracle ERP (https://www.oracle.com/applications/erp/index.html)
• Sage 300 ERP (http://www.sage.com/us/erp/sage-300)
• SYSPRO 7 (https://www.syspro.com/us)
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