If you are a service company you are essentially an equipment and labour-intensive organisation measured by your ability to meet customer service expectations. ERP systems that are implemented early in businesses that are ERP ready, can help scale and future proof their operations.
Companies like this often start off as a soul operator, keeping track of jobs, staff and materials on an Excel spreadsheet or sometimes simply good old fashion pen and paper. As the business grows, accounting software is needed to stay on top of the numbers – Xero or MYOB are the usual go-to options, but these are short term solutions.
When is the right time to upgrade to an Enterprise Resource Planning system?
Generally at the 2 year mark business are running multiple disparate systems. One software application for sales, one for inventory, one for field service management, another for ecommerce, accounting, customer service, human resources and so on. It’s at this point the business owner often finds hours of his day tangled in a web of software applications and redundant processes that suited things just fine when it was a one man show.
Signs of being ERP Ready
Service companies have to keep a look out for the following challenges, each of which is a tell-tale sign that you are ERP ready:
- Reduced service levels relating to scheduling conflicts, lack of skills, sub-optimal routing, inefficient dispatch and inventory depletion.
- Missed new business sales revenue opportunities due to poor service levels.
- Working capital constraints due to under-utilised equipment and inventory.
- Poor monitoring of field employees resulting in low productivity.
- Occupational health and safety incidents due to lack of compliance tracking.
- Decision making impacted by the lack of meaningful analytics to measure volatile costs and poor customer service.
It’s at this point the question needs to be asked ‘Can we actually take on more work or employees with our current systems?’ eg. Can we scale up using the software applications we have? If the answer is No (Or Yes, but painfully), then it’s definitely time to consider upgrading to an ERP.
Choosing an ERP
Picking an ERP is a daunting prospect. ERPs are not only more expensive than stand-alone accounting software, they are more complex to set up and operate. Then there is the cost of retraining; an ERP is usually used by every employee in the company. However the benefits and ROI of an ERP far outweigh the costs if you are ERP ready.
The advantage of ERP systems is that everyone in the business logs in to the one system for everything (one source of truth), and each individual in the company has their own personalised dashboard. Cloud Based ERP’s come with all the advantages of cloud computing, meaning all field staff can log in to the system from anywhere, eradicating the possibility of leaving any critical information back at HQ. It’s not uncommon for businesses to have paid off the implementation cost in their first years just from the efficiency savings.