Recent survey data has revealed that small businesses in the US are experiencing issues with ERP integration that are causing projects to spiral out of control and even fall through altogether.
Representatives from over 500 SMEs took part in the study by Brightpearl, a leading retail OS provider.
The data suggested that small businesses in the US struggle with fulfilling Enterprise Resource Planning (ERP) integration projects, with implementation taking far longer than advertised and at a higher cost.
With such significant issues being revealed by this survey, we wanted to provide our considerations for how to address them and highlight how YourShortlist can help small businesses avoid worries around ERP integration.
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ERP integration problems
The Brightpearl survey drew attention to how the viability and success of ERP projects have been less than stellar for small to medium businesses.
Namely, major ERP projects were found to take six months longer than companies were initially told by vendors. Companies can on average expect a 195-day delay to major enterprise software projects, which can already take months or years to finish even when completed on schedule.
One troubling statistic was that around 4 in 10 businesses (38%) experienced a major project failure when trying to implement their new Enterprise Resource Planning system.
While larger businesses were found to experience more issues on average, margins are already tight enough for small businesses and many cannot afford delays or escalating costs.
With over half (53%) of SMEs encountering problems, it must be asked where flaws in the ERP integration process can be identified and addressed.
Addressing the challenges with ERP integration
The survey data cited the main reasons for failed ERP projects to be “ongoing integration issues (27% of results), a lack of scalability and flexibility (25%), being a poor fit for a retail brand (17%), and a lack of expert implementation consultants to help guide the process (15%)”.
Let’s break down each reason and how it can be addressed:
Ongoing integration issues
ERP integration refers to how the software integrates with other IT infrastructure and applications, such as a project management, ordering, or Customer Relationship Management (CRM) system. While most ERP companies offer integration with other software, such as the Microsoft 365 suite, some may be lacking and would require custom integration offered by the solution provider.
We’d suggest looking for ERP software that has a track record of successful integration with any existing systems you are using, or at least has the option of modules or applications to extend its functionality to CRM, ordering, or more that you require.
Lack of scalability and flexibility
One of the benefits of ERP designed for small business is that it suits the limited budget of small-scale operations. However, some of these solutions may not be geared up to expand alongside a business, with a ceiling on number of users or a lack of additional modules.
You can address this by purchasing a scalable solution with an affordable pricing model from the outset, with the capacity to expand through larger scale versions or additional integrations. As your business grows, so too can your ERP software, saving you time and money on onboarding an entirely new solution.
Applications of ERP in industry
It’s unfortunate that many businesses will choose ERP software that looks good on paper, and perhaps even has excellent reviews, only to find it lacks key functionality for their specific industry.
The upside is that there are several ERP solutions on the market designed around core functions like manufacturing or distribution, meaning with a focused procurement search you should be able to find the most suitable ERP software for your industry-specific needs.
No consultant to guide ERP integration
Some vendors will simply provide ERP software and leave it to the buyer’s IT staff or the system’s own built-in tutorials to facilitate effective setup. This can cause long delays and require extensive staff training to get relevant personnel up to speed.
To address this, be sure to purchase through a vendor that also offers consultation and support in setting up, maintaining, and troubleshooting your new ERP system. This allows for much more effective implementation in the long run and cuts the time of ERP projects significantly.
Considerations when choosing ERP software
Despite the issues many companies face when procuring and onboarding new ERP software, several of the problems can be avoided with effective planning and preparation.
To ensure your ERP integration project can help you achieve your company’s goals, consider your future objectives and projected growth to determine what your procurement criteria will be.
- Individuals from different departments should identify key requirements for their areas of expertise. Establish a project team to highlight requirements across the entire business.
- Allocate responsibility to key personnel for internal ERP software support, and maintenance throughout the project.
- Guaranteeing external software partner support in the early stages will negate the need for training further down the line.
- Review and map out your business processes to gain a picture of how the software will support and impact your company.
- Ensure buy-in from the team and that the ERP system will be utilised by all relevant members of staff (as well as ensuring they are trained in its use).
- Look for well-supported software that provides longevity and scalability to adapt to changes and growth within your business.
Keeping all the above considerations in mind can make the procurement process much easier.
Timescales for ERP integration
Even with careful planning and foresight, you may still encounter issues in the procurement process that will cause delays or result in problems further down the line.
Typically, a review process for selecting and onboarding ERP software can take between 6 and 12 months.
This would involve comparing options on the market to narrow down a longlist of around 10 to 12 providers.
This would then be narrowed further to a shortlist of 6 to 8 providers.
Finally, IT buyers must compare software options from each provider to determine their best overall solution.
ERP implementation is not a one-off exercise, especially with cloud ERP systems continuing to update and evolve in complexity.
The best way to ensure smooth and efficient ERP implementation is to select a solution that meets your key criteria, is easy for to adopt, and integrates with or streamlines your existing systems.
Rather than waste time and money sorting through hundreds of potential options, why not speak to someone that can manage the procurement process, so you don’t have to.
How YourShortlist helps with ERP integration
As the Brightpearl survey results identified, ERP integration is a complex and often precarious project for small businesses.
Long lead-in times are often required, and it can be very easy for the scope of the project to grow exponentially. This leads to stretched budgets, missed deadlines, headaches for IT managers, and even failed projects altogether.
So, how does YourShortlist hope to provide an answer?
Our team of consultants works with buyers to simplify and clarify the software market. We make it easy to see which ERP providers and solutions are relevant to your needs.
We handle the lengthy process of procurement for you to avoid wasted time and money spent searching for, deploying, and maintaining a new ERP system.
If you’d like to find out more about how we can assist you in your ERP integration project, get in touch with our Members team today.
Book a meeting with our team or call us on +44 (0) 20 4532 5532 and we can work to match you with the software partner you need.