WHITE PAPER FACILITATING STRATEGIC GROWTH IN BUSINESS THROUGH ERP IMPLEMENTATION

Transcription

1 WHITE PAPER FACILITATING STRATEGIC GROWTH IN BUSINESS THROUGH ERP IMPLEMENTATION

2 EXECUTIVE SUMMARY Growth in small and medium enterprises (SME s), though highly desirable, can lay bare the inadequacies of existing IT infrastructure. This can be a severe challenge to executives as well as an opportunity. ERPs are integrated business software solutions that have evolved over time to cater not just to large enterprises, but also for SMEs. With proper implementation of suitable ERP solutions, SMEs can benefit in numerous ways. If your company or business is struggling to cope with increased pressure from expansion/ growth in sales volumes, it might be the right time to consider adopting an ERP solution. 2

3 CONTENTS Business Growth in Startups/SMEs and Challenges to Business Leadership...1 Enterprise Resource Planning: A Brief Introductory Primer...2 Significance of a Proper Implementation of ERP: Caveats and Potential Benefits...3 When Is the Right Time to Consider ERP Implementation...4 Company Profile

4 Despite the constrictive effects of the global recessionary tendencies, startups and SMEs have displayed positive growth in recent years. BUSINESS GROWTH IN STARTUPS/SMES AND CHALLENGES TO BUSINESS LEADERSHIP Regardless of the nature and size of a business enterprise, growth is a key component of the long term strategic vision espoused by its top leadership. And senior executives, CEOs in particular, are the common custodians of the strategic goals of the organization. Change is an inevitable aspect of business environments in particular. Yet assimilating positive internal change remains a considerable challenge for most enterprises. Chief among the myriad responsibilities of a CEO is to foster a forward thinking mindset and resilience within the overall organization to enable it to handle the inevitable stresses that arise as the result of internal and external environmental changes. Growth, while the primary goal of any business enterprise, can bring with it its own set of challenges, if left unaddressed, can severely damage its long-term stability and prospects. Changes wrought by continued growth in volume and sales can actually posit highly undesirable stressors on the internal infrastructure of a business. A CEO has to be intrepid enough to anticipate and identify potential stressors and take decisive action as and when the cracks start appearing, regardless of the general aversion to change that commonly plagues the major stakeholders of an enterprise. Despite the constrictive effects of the global recessionary tendencies, startups and SMEs have displayed positive growth in recent years. Executives in leadership roles in these enterprises face a surfeit of challenges from the opposite ends of the spectrum, namely, the pressures exerted by a recessionary environment on one hand and the challenges posed by rapid expansion on internal scaling capacities on the other. In such a scenario, CEOs often have to juggle encouraging growth while simultaneously reducing costs and increasing overall profitability. Business IT infrastructure has been gaining importance over the last few decades with the fast paced evolution of technology. The correct implementation of integrated enterprise software technology can enable businesses to streamline their various processes and transactions, often enabling significant increase in productivity and reduction in costs. Simultaneously, integrated IT solutions can also put previously unavailable datasets, analytical tools, and enterprise wide reports in the hands of top-level management. 4

5 CEO access to data is extremely relevant in the current climate of Big Data when every single business process and transaction tends to create a multitude of potentially useful datasets. Having a single, integrated software to handle all the different datasets at the disposal of different departments allows top level executives speedy access to relevant information. This can considerably speed up the decision-making process and allow for more time to be devoted to strategizing and evaluating the true health of the business at any given time. Having a single, integrated software to handle all the different datasets at the disposal of different departments allows top level executives speedy access to relevant information. Especially in a modern business enterprise with multiple entities, often based in diverse geographical locations and spread across the globe, keeping a tight handle on all available datasets can be a strenuous task. This is especially the case when different departments and entities resort to diverse software and IT tools for their own database management requirements. The long and often convoluted supply and delivery chains characteristic of a modern business enterprise can further muddy the waters and deny CEOs of a clear picture of the company s financial and organizational situation. This can severely hamper any initiatives to maximize the potential of all the assets available to the enterprise to deliver more value and further channelize the growth of the business. For top level executive and CEOs of growing enterprises and startups who have not yet implemented a modern ERP system, the above mentioned scenarios might strike a familiar chord. They might have encountered situations in their growing business where further integration of available systems for database management, compliance, HR, CC and sales processing might actually shave off precious hours of labor while streamlining their delivery of products/services. If one answers in the affirmative to the above assertion, then this paper should of great interest and a potential utility to you. 5

6 ENTERPRISE RESOURCE PLANNING: A BRIEF INTRODUCTORY PRIMER For those uninitiated into the concept, Enterprise Resource Planning (ERP) is simply a unified business management software. In this software system, a suite of integrated software takes care of all the main processes taking place in a business enterprise, allowing for the collection, recording and analysis of all data and information that may be accumulated as part of the business activities. A properly implemented ERP software suite can completely oversee all major business functions like planning, R&D, manufacturing, sales and marketing, while simultaneously automating numerous IT related back-office functions and processes. The core philosophy behind the creation and utility of an ERP is in the creation of a centralized repository for all business related data and information which enables easier and faster data flow throughout the business organization. Though initially developed in the 1990s primarily with manufacturing resource planning in mind, ERPs have developed and expanded to cover the whole gamut of enterprise-level operations. And with the rise of internet and evolution of sophisticated database management technologies, ERPs have evolved to integrate not just internal back-office functions, but also external front-office functions like Customer Relations Management (CRM) as well as supplier relationship management (SRM). At present, ERP systems are available as either on-site solutions or as cloud-based solutions, often in a Software as a Service (SaaS) model. Traditionally, ERPs have been largely restricted to the domain of larger enterprises, but the situation has seen drastic change since the turn of the millennium. Online, cloud-based solutions offer SMEs and startups access to affordable and flexible ERP solutions with the ability to scale up or down as required. The evolution of communications technology and web based SaaS systems have shown a dramatic trend in ERPs towards mobile solutions that can give executive a real-time snapshot of the business information on-demand, on the go. And with more robust and secure cloud computing technology alleviating prevalent concerns regarding data security, this trend has been accelerated by the migration of more and more ERP solutions to cloud computing. The ERP market has also evolved into a highly specialized structure, with the likes of Oracle, Microsoft and SAP catering more to larger enterprises, while smaller, more specialized vendors cater to the unique needs of mid-market enterprises and smaller businesses. In such a diverse and mature market, ERP solutions can be found tailor-made to the specific requirements of most enterprises. 6

7 ...upgrading to a well chosen and properly implemented modern ERP solution can bestow numerous potential benefits to an enterprise using non-integrated software systems or older, legacy ERP solutions. SIGNIFICANCE OF A PROPER IMPLEMENTATION OF ERP: CAVEATS AND POTENTIAL BENEFITS Implementation of an ERP solution is not a decision that can be taken lightly in any enterprise. Often such a decision is precipitated by the aforementioned pressures of inadequate scaling and inefficiency of existing IT infrastructure to handle increasing volume of processes and transactions in a fast growing enterprise. Yet, CEOs and concerned executives should be sufficiently aware of the potential negative fallout of improper selection and execution of ERP solutions. Expectations regarding potential benefits of ERP solutions should be tempered with a healthy dose of realpolitik. An ERP is in no way to be considered as a panacea for any ills plaguing an enterprise which has its roots in poor planning or faulty execution of business processes. It is not, in short, any species of silver bullet which can erase the faults inherent within the internal organization and machinations of an enterprise. As a worst case scenario, an ERP might even exacerbate the issue, causing unplanned delays in implementation, cost overruns and actually even reduced productivity. Keeping these caveats in mind, upgrading to a well chosen and properly implemented modern ERP solution can bestow numerous potential benefits to an enterprise using non-integrated software systems or older, legacy ERP solutions. Though not an exhaustive list, the following may be defined as the most common benefits accrued as result of ERP solutions: Reduction of Operating Costs Often one of the most cited and most persuasive arguments used in favor of ERP solutions. Enterprise level software suites do not come cheap. Implementing multiple software systems from different vendors over various departments, branches and other business entities can often result increased subscription costs and license fees. Concurrently, IT departments may also find their cost of training employees in multiple systems much higher relative to a single integrated system. Taking these facts into account, using a single ERP solution could conceivably reduce IT staffing costs as well as implementation and maintenance costs across the organization. By automating many common back-office functions, ERPs can further reduce operating costs across the company. 7

8 Single Unified Data Repository Having a single point of control for all relevant business related data can have a massive impact on productivity and efficiency in an enterprise. ERPs facilitate faster and smoother flow of data within a business organization. In the case of a global enterprise spread over diverse geographical locations, seamless access to data can provide executives with critical insights into the financial health, efficiency and productivity of the overall business enterprise. Company-wide access to real time, critical data can improve efficiency and reduce valuable time spent on data collection in an organization. In many modern enterprises, data integrity is of paramount concern. A unified ERP solution can guarantee this with a single storage and access point for data and information for the entire business enterprise. Unified data processing systems across the enterprise has the added advantage of eliminating potentially costly duplication of data within the databases of the company. Facilitates Expansion Across a Global Organization Across a global enterprise, geographical and cultural boundaries can adversely impact workforce coordination as well as adoption of uniform best practices. Having a single system ERP can help management transcend such barriers more effectively. With all the diverse benefits of efficiency and streamlining facilitated by ERPs, planned expansion could become more cost-effective. Expansion also becomes much easier across distances and borders owing to the use of globally applicable templates for management of organizational resources and assets. Scalability enabled by ERPs are often a key consideration compelling enough for fast growing enterprises to migrate to such solutions. Advantage for Compliance, Transparency and Accountability Faster and secure access to internal data can only have a positive impact on compliance. Especially in global enterprises, where different arms of the business fall under multiple regulatory environments, complete adherence to diverse compliance regulations can be a difficult and time consuming endeavor. Standardization of internal databases and financial accounts, facilitated by ERPs can prove to be highly beneficial for this purpose. The same applies for efforts related to transparency, accounting and timely reporting of vital enterprise information to the relevant stakeholders of the business. 8

9 Improved Flexibility and Resilience to Adverse Changes CEOs and top-level management require comprehensive access to all vital information regarding the business enterprise to be capable of better handling adverse market conditions when they arise. Such adaptability is crucial to the discharging of the basic functions of a CEO. With the Dashboard function provided by modern ERP solutions, executives are able to remain up-to-date regarding all aspects of the enterprise and this offers them a degree of flexibility and resilience that other fragmented IT solutions simply cannot provide. 9

10 When existing infrastructure is stressed... this [is] a good time for CEOs to consider ERP solutions as a viable alternative for the long-term future and growth of the enterprise. WHEN IS THE RIGHT TIME TO CONSIDER ERP IMPLEMENTATION In the case of enterprises who have not yet implemented as ERP solution, phases of positive growth and evolution are when the need for such a system manifests itself internally. Management or IT departments usually become aware of the inadequacies of existing IT systems to handle the increased pressures that come as a result of increase in sales volumes and rapid expansion of production and asset acquisition. For startups and SMEs, they often reach a point in their business expansion when using QuickBooks or simplified Database managements tools no longer pass the muster and actually hamper expansion. When existing infrastructure is stressed in such a manner and results in possible stagnation, this would be a good time for CEOs to consider ERP solutions as a viable alternative for the long-term future and growth of the enterprise. 10

11 Let s us help you grow ahead! Contact NeoSystems Corp for your free consultation! (888) netsuite@neosystemscorp.com ABOUT NEOSYSTEMS In the case of enterprises who have not yet implemented as ERP solution, phases of positive growth and evolution are when the need for such a system manifests itself internally. Management or IT departments usually become aware of the inadequacies of existing IT systems to handle the increased pressures that come as a result of increase in sales volumes and rapid expansion of production and asset acquisition. For startups and SMEs, they often reach a point in their business expansion when using QuickBooks or simplified Database managements tools no longer pass the muster and actually hamper expansion. When existing infrastructure is stressed in such a manner and results in possible stagnation, this would be a good time for CEOs to consider ERP solutions as a viable alternative for the long-term future and growth of the enterprise. 11