The Fifth Deadly Sin of ERP Implementation
#5: Failing to Consider Industry Specific ERP Solutions
Most organizations start ERP selection with a list of the big names in the ERP software marketplace, research features, functionalities and total cost of ownership, and then schedule multiple rounds of sales presentations and demos.
Often overlooked in this process are the smaller solution providers that may better support particular industries and their specialized needs.
There are ERP vendors with exceptionally strong experience and domain knowledge in your vertical, offering industry-specific systems from a deep understanding of your business and processes. They offer important features that bigger ERP solutions do not. Many times, they may be the best choice for your organization and your unique requirements. You’ll never know, however, if you don’t include them in your evaluation, listen to their pitches and see how their software works.
Think harder. Expand your search to include smaller ERP vendors with a solution built for your industry.
The 7 Deadly Sins of ERP Implementation
Enterprise Resource Planning (ERP) systems are powerful tools that help organizations across various industries streamline business processes and improve efficiency. However, many businesses make a critical mistake during ERP implementation—failing to consider a ERP for your specific industry. This oversight can lead to inefficiencies, increased costs and missed opportunities for growth.
The purpose of this post is to explore why it is important for your organization to consider industry-specific solutions instead of a generic ERP solution and provide insights on how to find the right fit for your specific industry.
7 Deadly Sins of ERP Implementation
Some mistakes are the result of process-oriented or people-centric choices, and are easily avoided. These are The Seven Deadly Sins of ERP Implementation.
Understanding the Difference: Generic ERP Software vs. Industry-Specific ERP Software
1. Generic Software
Generic ERP systems are designed to cater to businesses across a wide range of industries. A generic solution offers robust functionality in areas such as accounting, inventory management, finance and general business management. While these systems provide a solid foundation, they often lack the features and capabilities offered by industry-specific ERP systems that are needed by businesses operating in specialized industries such as manufacturing and distribution companies.
If you are an organization in a sector such as manufacturing, distribution or retail you may have to customize the generic ERP system extensively, which can be both time-consuming and expensive.
2. Industry-Specific ERP Systems
On the other hand, some Enterprise Resource Planning solutions are tailored to meet the unique needs of particular industries. These systems are developed by niche companies with a deep understanding of the challenges and requirements faced by businesses in specific sectors.
Industry-specific software includes specialized modules. For example, this may include human resources and business intelligence functionality, built specifically for a process manufacturing company. The modules help with scheduling product production and other essential functions that align with the processes and workflows of their particular industry. By choosing from industry-specific ERPs, your business gains access to features that are specifically designed for your business—features not included in generic software.
The Benefits of Industry Specific ERP Solutions
1. Tailored Functionality for Your Industry
Industry-specific systems offer comprehensive functionality that caters to the specific needs of a particular industry. Whether you are in manufacturing, distribution, healthcare or any other specialized sector, an industry-specific ERP software provides features that are essential to your business processes, unlike a generic ERP solution.
For example, a manufacturing ERP system might include modules for materials requirement planning (MRP), production scheduling and capacity planning. On the other hand, a retail ERP system may have modules for Point of Sale (POS), Customer Relationship Management (CRM) and Inventory Management. These industry-specific features enable businesses to optimize their operations, reduce waste and improve overall efficiency.
2. Improved Efficiency and Productivity
By choosing an industry-specific ERP software, your business can streamline processes and eliminate inefficiencies. These systems are designed to automate and optimize industry-specific workflows, allowing employees to focus on value-added tasks instead of manual, repetitive processes.
For instance, an industry-specific ERP system for a distribution company may include integrated batch scheduling functionality, enabling efficient and cost-effective production and resource planning. This automation leads to faster order processing, reduced errors, and improved traceability.
3. Enhanced Regulatory Compliance
Different industries have unique regulatory requirements that businesses must adhere to. Industry-specific ERP systems are built with these regulations in mind, ensuring that your business can meet compliance standards without additional customizations or workarounds.
For example, in the pharmaceutical industry, compliance with strict FDA regulations is crucial. An industry-specific ERP system for pharmaceutical companies would include features that support industry standards such as Good Manufacturing Practices (GMP) and traceability requirements. This reduces the risk of non-compliance penalties and helps your business maintain a strong reputation in the industry.
4. Deep Industry Knowledge and Support
Industry-specific ERP vendors have a deep understanding of the challenges and intricacies of their respective industries. These vendors are familiar with industry-specific terminology, processes and best practices, allowing for smoother communication and a higher level of support.
Vendors of generic ERP systems simply can’t provide this level of expertise. By partnering with an industry-specific ERP vendor, your business can leverage their expertise to maximize the benefits of the ERP system and drive growth in your industry.
5. Faster Implementation and Time-to-Value
Implementing a generic ERP system often requires extensive customizations and modifications to align it with industry-specific requirements. This can result in lengthy implementation timelines and delayed time-to-value.
In contrast, industry-specific ERP systems are built with the specific needs of a sector in mind. They come pre-configured with industry-specific features and functionalities, reducing the need for extensive customizations. As a result, your business can implement an industry-specific ERP system more quickly, start using it sooner and begin reaping the benefits of the solution faster.
6. Lower Total Cost of Ownership
While generic ERP software may seem more cost-effective initially, the need for extensive customizations can significantly increase the total cost of ownership. Customizations require additional time, resources and ongoing maintenance, which can be quite expensive in the long run.
On the other hand, industry-specific ERP solutions are purpose-built for specific industries, reducing the need for costly customizations. These systems offer the essential functionalities your business requires without unnecessary features that are irrelevant to your industry. As a result, the total cost of ownership for industry-specific ERP systems is often lower, providing a better return on investment.
Finding the Right Industry-Specific Software
When selecting industry specific ERP solutions, it’s important to consider several factors:
1. Identify Your Business Needs
Before evaluating different ERP solutions, it’s crucial to identify your business needs and pain points. Assess your current processes, workflows and areas that require improvement. Make a list of the specific features and functionalities you require from an ERP system to address these needs.
2. Research ERP Vendors
Conduct thorough research on vendors that specialize in your industry. Look for vendors with a proven track record of providing industry-specific solutions and catering to businesses similar to yours. Consider their experience, reputation and customer reviews to gauge their suitability as a partner for your ERP implementation.
3. Compare Features and Functionality
Compare the features and functionalities of different industry-specific ERP systems. Look for solutions that align closely with your business needs and offer the specific capabilities required by your industry. Consider factors such as ease of use, scalability and integration with other business applications you currently use.
4. Assess Vendor Support and Expertise
Evaluate the level of support and expertise offered by the ERP vendor. Consider their understanding of your industry’s challenges, their ability to provide ongoing support and their commitment to staying up-to-date with industry trends and regulations. Strong vendor support can make a significant difference in the success of your ERP implementation and long-term satisfaction with the system.
5. Consider Total Cost of Ownership
While cost should not be the sole determining factor in your ERP acquisition, it’s essential to consider the total cost of ownership when selecting an industry-specific ERP solution. Evaluate the implementation costs, ongoing maintenance fees and any additional charges related to customization or support. Choose a solution that provides a good balance between cost and value for your business.
Conclusion
Failing to consider an industry-specific ERP solution can be a costly mistake for your company’s future. While an industry-specific system has the same basic functionality and features as generic systems such as accounting, finance, inventory management, project management, etc., they also have features that uniquely address the needs of your industry. By neglecting to choose a system that caters to your unique industry requirements, your organization may struggle with inefficiencies, limited functionality and increased costs.
Industry-specific ERP solutions offer tailored functionality, improved efficiency, enhanced regulatory compliance and deep industry knowledge and support. By carefully evaluating your business needs, researching vendors and comparing features and functionality, you can find the right industry-specific ERP solution that aligns with your business goals and sets you up for long-term success.
Don’t overlook the smaller, niche vendors that may offer specialized capabilities and a better understanding of your industry. Make an informed decision and reap the benefits of an industry-specific ERP solution tailored to your business needs.
Ultra Consultants is an independent ERP selection partner. With our experience, we can help you select and implement an ERP system that is specific to your industry, avoiding the costly implications that arise from force-fitting an ERP system for your organization. For more information and additional resources on how to bring our expertise right to your doorstep, request a free discovery call today.
