More exercise, less screen time, better relationships with family and friends — many of us make resolutions for the new year. Organizations also use the turning of the calendar as an opportunity to set goals and zero in on important targets. Experts agree that breaking goals into bite-sized chunks is key to success, whether for personal resolutions or corporate objectives.
If your distribution business aims for reduced costs, increased revenue and greater agility, an enterprise resource planning (ERP) system could be key to achieving these goals. Selecting the right system, however, can be daunting. How can you break down ERP implementation strategies into manageable pieces? This guide can help you identify the right next step toward harnessing the power of an ERP system to meet your firm’s objectives.
Start here: Establish business goals
To start, begin by defining your business needs and goals. Focus on your objectives by assessing your needs in three primary categories:
- Financial measures such as cutting input costs, increasing revenue and stronger cash flow management
- Customer satisfaction, including improving retention or churn rates and raising satisfaction scores
- Internal business processes that include better quality assurance, fewer errors and smoother regulatory compliance
Next, determine areas for improvement, such as manual tasks or time-consuming reviews, as well as leverage points where small changes can drive big results. In a distribution business, supply chain responsiveness is often a significant leverage point, characterized by the ability to quickly see and respond to changes. You’ll also want to consider any existing systems and where they may have shortcomings.
At this point, you’ve built a basic framework to assess how an ERP system can add value to your business. In addition, these insights are useful for creating a high-level business case for the ERP project.
This is also the moment to specify your budget and determine the key stakeholders who will need to weigh in throughout the research and decision-making process, including finance executives, IT team members and users from important functional groups.
What does your business need? Draft ERP requirements
When you’re ready to move forward, the next step is to gather and document which capabilities the new ERP system will need to achieve the specified goals and address your firm’s problems. You’ll want to prioritize the requirements or otherwise weigh their relative importance.
Requirements can specify functions and features, as well desired processes or working groups the ERP system needs to support. LifeScience Logistics, for example, was seeking a robust, FDA-compliant distribution ERP with warehouse and transportation management applications that are easy to deploy, learn and use.
It may be helpful to categorize your requirements, such as:
- Manage financials with features like general ledger and invoicing.
- Forecast sales and track transactions with sales management tools.
- Provide user support with dedicated account managers and phone support.
- Oversee customer relationships through lead management and email integration.
- Track inventory with features like valuation and categorization.
- Optimize supply chain with integration to supplier systems and dock scheduling.
- Improve warehouse operations with labor scheduling and order prioritization
- Use system specifications like cloud delivery and mobile device compatibility.
Survey the field: Research and compare different ERP systems
With requirements in hand, you’re prepared to create a shortlist of ERP solutions providers specific to your industry and needs. Through a combination of RFI and RFP responses, follow-up conversations and demos, vendors can provide answers to critical questions, such as:
- Which of your firm’s high-priority features are available as a standard offering?
- Which are available as customized or bolt-on offerings at an additional cost?
- Is the cost within budget over both short- and long-term horizons?
Once you’ve identified the right ERP system and are ready to commit, the final step is to develop an implementation and deployment plan with timelines for testing, training and rollout.
Want to discover what a robust ERP system can do for your business? Speak with an expert today.