Enterprise Resource Planning software is used by thousands of organizations of all sizes to enhance efficiency across their mission-critical operations.
With a fully-integrated ERP solution in place, companies gain insight and control over key functions within the business, such as accounting, procurement, warehousing, production, shipping, quality control and sales.
But finding the right ERP solution to fit your company’s needs can be challenging, and implementing and managing it once you’ve chosen the right one can be even harder.
To help you navigate the ERP landscape, I’ll break down the basics of ERP software, describe the different types of implementation, list the biggest players and explain why partnering with a managed service provider can be the most efficient and cost-effective way to move your company forward.
The basics of ERP
At its core, ERP software integrates essential business processes, often in real-time, to track, collect, store, manage and interpret data from different activities across a business.
When done right, otherwise challenging or impossible tasks, such as tracking a single resource from the materials-procurement stage to the sales and shipping stage, become a natural part of the ERP process.
ERP solutions have become an essential ingredient of the modern successful enterprise. When implemented correctly, they can save organizations millions of dollars and give them a significant edge over their less-efficient competitors. But when implemented poorly, ERP solutions can disrupt the very workflows they were designed to assist. Rather than saving time and money, the wrong ERP set-up can mean spending more of both just to remedy the situation.
Choosing the right ERP implementation for your business is the first step in making sure you find the right fit.
ERP implementation types
Although there are dozens of types, there are three broad categories of ERP implementation you’ll want to get up to speed on: on premise, cloud and hybrid. Knowing which is right for your business is not always a simple matter, and a good way to find out is to work with a seasoned managed service provider with a track-record of guiding enterprises through complex ERP implementations.
Below are pros and cons of each implementation type:
- On premise — although cloud solutions are improving by leaps and bounds, on premise ERP solutions may still offer a greater degree of integration with in-house software systems at the present time. That’s why on premise (also known as on site) solutions are often favored by the largest organizations with the greatest need for customization and performance. That said, approximately half of organizations running Tier 1 ERP software are at least exploring the cloud in their overall implementation.
- Cloud — The popularity of cloud solutions is growing exponentially. The lack of a need for large-scale, on-site hardware means cloud solutions tend be faster and less expensive to implement, maintain, monitor and upgrade. However, they don’t always offer the level of integration, customization and performance required by some larger enterprises.
- Hybrid — All leading ERP software makers offer a compromise between on premise and cloud implementations that can take advantage of the strengths of each in an overall, hybrid solution.
A number of legacy vendors exist that provide solutions for each of these categories. It’s important to understand who they are and what they offer when weighing various ERP options.
SAP and Oracle are the longtime ERP leaders. PeopleSoft, owned by Oracle, is another strong contender with an impressive end-to-end solution well worth considering. Before deciding among them, it’s wise to reach out to independent ERP specialists that have high-level experience with all three platforms.
One of the most important decisions you’ll want guidance with is the roll-out strategy for your ERP solution. Given the need for integration with nearly every business unit and software system in your organization, a reliable ERP implementation requires careful planning.
Here are the two most common roll-out strategies:
- Big Bang — this is the simplest and least-expensive model. The cutover to the new ERP system happens all at once, with no turning back. Often best-reserved for smaller companies with minimal integration requirements, the “big bang” approach is generally considered too risky for larger, more complex implementations.
- Phased — the primary advantage of the phased roll-out strategy is risk reduction. The cutover to the new ERP system takes place in steps, one module at a time. This gives teams the maximum amount of time to familiarize themselves with the new software and revert back to the old one when a problem is found. This strategy is generally best for larger, more risk-averse companies with the most in-house software to integrate. Although it’s always wise to seek the guidance of a team of ERP roll-out experts from a managed service provider, it’s doubly important with a phased roll-out strategy, where extensive planning is required.
Ongoing support and management
Once your ERP platform is up and running, the next step is to manage, optimize and protect your investment. In this area, it is difficult to overstate the value of a team of ERP specialists from a world-class managed service provider.
Depending on the precise set of managed services you choose, a team of ERP experts can relieve the burden on your IT department, freeing IT to focus on core business needs rather than ERP support.
An enterprise-grade, full-service managed service provider should at the very least address monitoring, system security, reporting, database management and granular, module-specific support.
The enduring value of ERP
ERP software has the power to transform your enterprise by providing a centralized means to view, monitor, track, automate and adjust core business processes across the entire organization.
Still have questions? Visit Rackspace to find out more about our suite of managed services for ERP software and the ways we’re working with businesses to help them get the most value out of their ERP software.