There is a lot of talk out there at the moment about enterprise resource planning (ERP) systems, but as an IT manager how do you really know if your business is ready to improve profitability and control by deploying a ERP system? Neil Davidson, UK managing director for global project-based ERP solutions provider, Deltek, explains how to recognise when your business is ready for the move from basic spreadsheets or disparate systems to an integrated ERP to consolidate your financial, project and resource management.
1.You’re data rich, but knowledge poor
Today most organisations hold a phenomenal amount of data relating to their business, but quantity doesn’t guarantee quality – far from it, in fact. Companies and their IT managers must be able to harness this data efficiently and collectively to provide real insight and knowledge and use it to the benefit of your business. Does your current system (or systems) provide instant access to, and reporting of intelligent, relevant information from right across your company? if not, an ERP system can provide your company with this, dramatically improving business processes and providing much more robust insight into all areas of the business.
2. Finance is a cost centre not a profit centre
‘Cash is king’ is the mantra all businesses must live by. A positive cash flow is the lifeline to a business. Key to this is a company-wide real time integrated financial workflow based on best practice, that effortlessly and automatically collects all billing data from across the company. This provides a centralised and transparent process for month end, payroll, project balances, supplier payments and client invoicing. The primary focus of back office financial processes should be to enhance, not inhibit the profitability of a company. It must ensure the company cash flow lifeline is as strong as it can be. If it’s not, or can’t do this, it’s time to look at how ERP can help.
3. No one wants to be a busy fool
In a professional services organisation, people are its most valuable asset. But often, effectively managing these valuable assets, including analysing staff costs against project costs across multiple projects and timelines presents huge challenges. To achieve this, companies need a transparent, robust and centralised workflow management system that can give the executives and project teams the information they need at any time through the course of a project to ensure it is being delivered on time and on target. ERP consolidates all this complex data and provides a wealth of easily understood information such as per-employee utilisation levels, billable rates and resource bandwidth. All this ensures the right people are working on the right areas of the project at the right time, maximising profitability.
4. Sometimes you shouldn’t Excel in business
Recent research showed 88 per cent of Excel spreadsheets include errors, add to this the limited knowledge of most people using them and drawing business critical information and analysis from them and you have a potential recipe for disaster. Your company is too important to make business-critical decisions based on potentially inaccurate and untimely information in Excel or other silo’d, legacy data capture and management tools. Don’t try and build your business with Excel, accelerate it with ERP.
5. Linking in the business chain
If you were to take a look today at a typical project that’s been managed recently in your organisation, how successful do you think it would be? Was it profitable? Did it manage all the resources effectively? Was it invoiced on time? What were the problems that you can learn from for next time? Was it managed in a coherent fashion from inception to completion and evaluation? Or, more importantly – does your current workflow management even enable you to start comprehensively answering the questions? If the answer is no (especially to the last question), then you and your business need to be seriously considering ERP. The above questions aren’t a luxury or a ‘nice to have’, they are critical to ensuring your business is profitable, can manage resources properly, beat the competition and grow. It’s simple: ERP helps to save time and maximise profitability. If that’s what you as an IT manager are looking for or have been tasked with securing, then ERP should be making its way up your priority list.