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Andi Gray: Become an expert at ERP

Andi Gray
Andi Gray

ERP is such an important decision. I don’t want to half-ass it. I’m not an expert at ERP. I want someone who is completely unbiased to help me figure out what’s the best for the future of my business. I could easily spend 100 hours on it, but I don’t have time for that. I don’t want to make the decision by myself.

THOUGHTS OF THE DAY: Let’s start by defining what is ERP and what it can do for any business. There are lots of folks who can provide advice on what to choose. Start by defining what’s going to be right for your business. Go through a careful investigation process.

ERP stands for enterprise resource planning. That’s a fancy way to describe the various software systems that a company relies on to execute the work of the company. Every year small business owners add more technology: from 2010 to 2017 there was an 18% increase in tech among small and midsize businesses (SMBs), a 30% increase in software spending and a total tech spend approaching $700 billion in 2017.

Growth in tech spending is practical. Updates in technology create better ways for businesses to process and mine data. Measurable productivity and quality improvements stem from technology and translate into bottom-line savings.

There’s still plenty of room for improvement. It’s estimated that one-quarter of small businesses rely on less-efficient, error-prone manual solutions instead of implementing technology. Also, 80% of SMBs report that some portion of their information processing is manual despite having solutions available that they could implement.

When picking someone to help with your IT investigation, interview candidates to find out what services they offer and how they price. Ask them to describe in detail how they take companies like yours through a search process. Insist on talking with references who are just like you – same size, same industry, similar set of needs. Be sure to build a budget for the advisory services and be up-front about that budget.

Software vendors may have advisers, but the advice will likely be biased. Many of the accounting, legal and consulting firms you already work with may have an opinion, but make sure they have carefully vetted those recommendations. There are technology firms, especially those that operate managed services businesses, that provide advice as part of their portfolio of services, some as part of a package they provide to their existing clients, others that offer a standalone service.

And then there are your peers. Look for the most advanced companies in your industry. Focus on firms that are twice your size. Find those companies that you don’t directly compete with and ask them to show you what they use and why.

Once you’ve picked an adviser, build a set of requirements. What do you have now? What should you have in three to five years? What automation do you want to implement? Which areas could benefit from upgrading existing tech? Get an adviser on board, right from the get-go, to help you define your goals. Evaluate how well you work with your chosen advisor. If it’s not working well for you, consider making a change. If things go smoothly, keep going.

Build a list of systems and companies to look at and set up interviews. Consider systems that “do it all” and multiple systems that can integrate into a complete solution. Your adviser should help set up these meetings, provide you with a decision-making checklist and provide their recaps as well. They should help you debate the pros and cons of the various solutions. And if you wish, make sure they can follow through to help oversee the final selection and implementation of your chosen solution.

BOOK RECOMMENDATION: “Modern ERP: Select, Implement and Use Today’s Advanced Business Systems” by Marianne Bradford.

Andi Gray is president of Strategy Leaders Inc., StrategyLeaders.com, a business-consulting firm that teaches companies how to double revenue and triple profits in repetitive growth cycles. Have a question for AskAndi? Wondering how Strategy Leaders can help your business thrive? Call or email for a free consultation and diagnostics: 877-238-3535 or AskAndi@StrategyLeaders.com. Check out our library of business advice articles at AskAndi.com.

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