To stay competitive in our age of innovation, digital transformation is the name of the game for retail and hospitality businesses. Integrating data, apps, and workflows together while gaining more speed, agility, and flexibility is at the spearhead of a sharp competitive advantage today. These improvements are the cornerstone of delivering more convenient and personalized customer experiences, more revenue generation, and minimizing waste.
One powerful way to do this, is implementing an enterprise resource planning (ERP) solution such as Microsoft Dynamics 365 or LS Retail. But how do you know if your business should implement an ERP, and when it is the right time?
In this blog, we outline 8-steps to sourcing and implementing an ERP solution that will help you to verify if an ERP solution is right for you, decide which is best for your business, and how to implement it.
Step 1: Assessing Business Maturity
A small café or convenience store is very unlikely to benefit from an ERP system! It’s too much work for too little gain; but, as your business grows and matures, the benefits of an ERP solution start to outweigh the costs. Your business will also develop an increasing ability to implement and manage an ERP internally.
Note: having the maturity to implement an ERP is different to being ready to benefit from an ERP solution! It’s possible to fruitfully implement an ERP with the help of 3rd parties.
Here are some signs that your business has the capability to implement an ERP solution:
- You Have Enough Financial Resources
Implementing an ERP takes time, upfront and recurring financial costs, and can involve other infrastructure and hardware costs, such as sourcing POS systems that can integrate with your ERP software. There are many variables to costing, but here are some ballpark yearly estimates:
- Small Businesses: $10,000 – $100,000
- Medium Businesses: $100,000 – $500,000
- Large Enterprises: $1Mn-10$Mn, potentially more
ERPs offer powerful benefits, but they can also require a substantial investment to implement, so taking practical steps to ensure that an ERP solution is right for your business is highly recommended before taking action.
You Have Strong IT Infrastructure in Place
ERPs can process a lot of data and take substantial amounts of computing power to operate. Ensuring that your network and IT infrastructure can support this operation will be crucial for implementing an ERP solution effectively.
You Have a Skilled IT Team
Effectively implementing a comprehensive ERP solution internally takes an IT department with skills across networking, cloud computing, database management, software management and development, knowledge of relevant vendor solutions such as Microsoft Dynamics, and softer skills such as change and project management. The requirements will vary by the business’s complexity and the ERP solution.
You Have Clear Business Processes
Without clear business processes it will be hard to implement a beneficial ERP solution. Having standardized and documented processes will go a long way in integrating your data and workflows together across your ERP, ensuring maximum benefit for your business.
You Have Change and Project Management Capabilities
To implement an ERP without leaving any gaps in functionality or user adoption, you will need to be able to effectively manage it as a project and coordinate stakeholders effectively.
This will involve having an implementation team that is proportionate to the complexity of your ERP solution. A team that can take care of a range of aspects such as:
- Stakeholder and communication management
- Project planning and management
- Technology integration
- User training and adoption
- Configuration, system testing, and quality assurance
- Risk management
- Data migration and validation
- Cybersecurity and compliance assurance
With the right people, plans, resources, and capabilities in place, your business will be in a viable position to implement an ERP solution.
Step 2: Identifying the Need
There are a few key dimensions to verifying the need for an ERP solution. To assess the case for an ERP, you can look at it in terms of problems that it can help with, and more positively, you can flip the coin by looking at the direct benefits it can create.
Secondly, you can assess the needs in terms of more qualitative and quantitative measures. This could be working with estimating how an ERP can help with things like saving time, lowering over and understocking, and increasing customer sales for example. You can find more qualitative feedback by finding out the pain points of staff across your business, as well as using customer reviews, amongst other methods.
Here are a number of ways to consider the need for an ERP, based on the problems it can solve and the benefits that it can create:
Problems That An ERP Can Help With:
- Inventory Management Issues: Are you facing challenges in tracking inventory levels, managing stock across multiple locations, or forecasting demand accurately? An ERP system can provide real-time visibility into inventory, aiding in effective management and optimization.
- CRM Shortcomings: Is your current CRM process fragmented or inefficient? An ERP system can offer integrated CRM modules to help in understanding and managing customer interactions and data throughout the customer lifecycle more effectively.
- Inefficient Financial Processes: Are financial processes like accounting, budgeting, and reporting time-consuming and prone to errors? ERP systems can automate these processes, ensuring accuracy and timely financial reporting.
- Supply Chain Inefficiencies: Are there delays, inaccuracies, or inefficiencies in your supply chain? An ERP solution can streamline supply chain management, from procurement to logistics.
- Data Silos and Lack of Integrations: Does your current system have isolated data pools that hinder cross-departmental data flow? An ERP system integrates various business functions, ensuring seamless data sharing and collaboration.
Benefits That An ERP Can Drive:
- Enhanced Efficiency: ERPs help businesses save time and lower costs across the board, such as by enabling businesses to automate more workflows and routine tasks and by empowering managers with data-driven insights.
- Improved Decision Making: Using intelligent and digestible data-driven insights, businesses are able to make faster and better decisions at multiple levels of management, contributing to more profitability and customer success.
- Scalability: An ERP system can make growth more scalable and profitable for your business. By integrating your operations together into a more seamless whole, you’ll be better placed to expand with more speed and simplicity without missing a beat.
- Compliance and Risk Management: An ERP solution can empower superior observability, control, and reportability across your business’s compliance efforts, saving time, increasing ease, and enabling compliance and risk management measures to scale with your business.
Step 3: Budgeting and Resource Allocation
Armed with a deeper awareness of the benefits an ERP can create for your business, the challenges it can help with, and the features that can bring these benefits to life, you will be in a better position to resource the project appropriately.
Develop a comprehensive budget that includes acquisition, training, support, and ongoing maintenance costs. Take care to evaluate your current workforce’s capacity to manage the new system and consider if additional hiring or training is needed. Consider:
Total Cost of Ownership (TCO)
Beyond the initial price tag, estimate the costs associated with the ERP system across its lifecycle (usually 5-10 years), this will include things such as:
- Software costs
- Training costs (before, during and after)
- Testing and quality assurance
- Third-party costs (e.g consultancy, implementation, configuration)
- New hires or internal labor allocation to manage and optimize the ERP system
- Support service costs
- Infrastructure and hardware costs
- Data migration costs
With a TCO established, your business has a foundation for implementing a profitable ERP solution and a realistic picture of the costs that it will likely incur across its lifecycle.
Internal Resource Capability
Assess the skills and availability of your current team. Determine if you have the necessary expertise to implement and manage the new system. For example, will your business need to hire a new ERP system administrator? If there is a gap, consider the costs and time required for hiring new staff or training existing employees in your plans.
Training and Support Requirements
Determine the level of training your staff needs to effectively use the new system. This may vary based on the system’s complexity and your staff’s current expertise. Additionally, understand the support offered by the ERP vendor or a relevant third party, including availability, performance metrics, and cost.
Step 4: Consider Partnering with an ERP Specialist
The knowledge and skills of ERP specialists can enrich the ERP selection and implementation process for your business, as they will be especially able to translate the commercial and technical aspects for your business and ensure the ERP solution is aligned to your goals, needs, and constraints.
An ERP specialist can help you identify the most promising ERP solution for your business, envision how it can be tailored to meet your needs and goals while fitting with your current workflows, infrastructure, and tools, and help you plan and practically implement the rollout.
When Selecting An ERP Specialist, Look Out For:
- Industry-specific experience and knowledge
- A proven track record and testimonials, especially from those within your industry
- Alignment with your business’s culture, needs, and goals
- Scope of practical support that they can bring to your ERP implementation (e.g change management, ERP configuration, system integration, consulting)
Step 5: Finding The Right ERP Solution
If you choose to work with an ERP specialist, they will especially be able to offer invaluable insights and guidance for this step. Now that you have a scope of the benefits an ERP can bring and the resources that are likely to be needed to implement it, you can select an ERP solution that offers the best bang for your buck.
When selecting an ERP solution, your business will want to consider:
- Scope of features: can the features meet your needs and drive our goals?
- Customizability: how seamlessly can the ERP’s features harmonize with your services, workflows, and offerings? Is it open to custom-coded features?
- User-experience: Is it intuitive and easy to use? How steep is the learning curve? How does the experience vary depending on device? (e.g POS, mobile, laptops)
- Integrability: can it integrate easily with other apps and systems?
- Budget-friendly: does it provide the best value for our budget?
- Compliance: can it meet our regulatory requirements where relevant?
- Future-proof: can the ERP grow seamlessly with our business and support its strategic plans for the future?
- Business continuity: How robust are the ERP vendor’s cybersecurity measures? Does the provider ensure maximum uptime, or are they prone to disruptions?
- Mobile and remote friendliness: Can the ERP be operated securely and easily using mobile devices and in remote working contexts?
- Analytics and reporting: How powerful, comprehensive and accessible are the analytics and reporting features?
Alongside working with specialists, you can use other methods to verify the effectiveness of the ERP solutions, including taking product demos and examining reviews and case studies.
Step 6: Implementation and Customization
As we move towards directly implementing a specific ERP solution for your business, there are a number of key steps and aspects to consider in order:
1. Project Planning: This initial phase sets the foundation for a successful implementation. It involves creating a detailed project plan that outlines the scope, timelines, resources, and budget. Effective project and change management will prove crucial here, as they will steer the direction, pace, and effectiveness of the implementation process.
2. Data Preparation and Migration: Data is the lifeblood of any ERP system. Preparing and migrating existing data into the new ERP system is a meticulous process. It requires auditing, cleaning, mapping, and transferring data from old systems or spreadsheets into the ERP. Ensuring data accuracy and integrity is this stage and beyond.
3. ERP Installation and Configuration: With the data ready, the next step is the installation of the ERP software. This is followed by a thorough configuration to align the system with your business processes. Customization at this stage involves tailoring workflows, forms, reports, and user accounts appropriately.
4. User Training and Testing: Training your team is essential for the smooth adoption of the ERP system. Now that the ERP has been furnished to reflect how your business works, you can train your team to use it and rigorously stress-test how it works in practice, using realistic and unusual scenarios to do so. By getting your employees involved in the testing, you will be able to gather up a vast amount of actionable feedback ahead of deployment.
5. Custom Development (If Needed): Sometimes, off-the-shelf solutions might not entirely fit your unique needs. In these cases, custom development can bridge the gap. This could involve creating bespoke modules or integrating third-party applications to extend the functionality of the ERP system.
6. Final Adjustments and Feedback Integration: Test, test, test is our motto at this stage! Take care to implement the insights and feedback through the implementation process, and then test the new adjustments again to finalize your ERP ahead of the go-live.
With the initial implementation, customization and fine-tweaks made, you’ll be ready to begin the go-live process!
Step 7: Go Live and Monitoring
The go-live phase marks the critical transition where your ERP system becomes fully operational. This stage demands meticulous planning and coordination. A ‘go-live’ checklist is essential for ensuring everything is functioning correctly before the switch.
During the go-live, take care to have a dedicated support team available to address any immediate issues. This team will play a pivotal role in troubleshooting and helping users to adapt to the new system in real-time.
After the go-live, you will also want to monitor the performance of your ERP. This involves tracking system and network performance, user experiences, and capturing and actioning unexpected issues as they emerge. System monitoring tools and ERP analytics are two sources that can give insight into the ERP’s performance and usage patterns.
The initial weeks following go-live are critical for gathering feedback from users. This feedback is instrumental for fine-tuning the system. You can encourage feedback through regular check-ins and creating support channels.
Step 8: Post-Implementation Review and Continuous Improvement
Once the ERP system has been operational for a set period, you can conduct a comprehensive review of the ERP and the outcomes it has created.
Compared to focus on functionality in the testing processes before deployment, the review should look at both this and the outcomes the ERP is producing, examining it in reference to aspects like:
- Business goals and objectives
- User and customer experiences
- Sales and unit costs
- Resource and supply chain management
- Productivity metrics
- Decision making
- Regulatory compliance
By creating metrics and mechanisms for reviewing the performance of the ERP in quantifiable and less quantifiable ways, you can assess the success of the ERP and find out where further improvements can be made.
It’s ideal to include various stakeholders in this process, including staff, customers, and managers to enrich the feedback and insights that are collected. By creating processes for gathering and acting on feedback and insights, you will be well-placed to tap into more value from your ERP, translating into superior customer experiences and growth for your business.
Understanding the Benefits
A well implemented ERP system brings enhanced efficiency, better decision-making, and improved customer experiences, and much more. For retail and hospitality businesses, this means streamlined operations, accurate inventory management, and superior service quality, positioning them for profitable and scalable growth.
Final Thoughts
Embarking on the journey of implementing an ERP solution can be daunting and complex at first glance, but by verifying the benefits, breaking down the steps on the way and understanding what’s involved, retail and hospitality businesses can make the path smoother and more empowering.
Remember, you don’t have to go it alone! An ERP specialist can greatly simplify the nuts and bolts of the implementation process for your business, saving time, resources, and risk, while also delivering the powerful benefits that an ERP solution can offer to you. Whatever the case may be, we hope that you find this blog useful and empowering for your journey.
ThinkTribe: Dubai and the Middle-East’s Proven ERP Implementation Specialists
Welcome to ThinkTribe, the premier choice for ERP implementation in Dubai and throughout the vibrant Middle-Eastern landscape. As seasoned specialists in system integration and ERP solutions, we excel in fostering profitable and scalable growth for businesses spanning various sectors, leveraging state-of-the-art technology solutions.
Whether you’re eager to harness the power of ERP for your enterprise in Dubai or any other part of the Middle-East, seeking tailored advice to select the ideal solution, or require hands-on support throughout the implementation process, our dedicated team is here to support you at every turn. Reach out to us today, and let’s propel your business towards success together.
