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Thinking of buying a new ERP system?

Here are our most Frequently Asked Questions (FAQs), providing clarity on common queries you may have when considering an ERP system purchase.

What is ERP software?

ERP software, which stands for Enterprise Resource Planning, is a comprehensive system for managing business processes.

It's designed to integrate and streamline all functions within an organization. By automating key business processes and centralizing data, ERP software improves efficiency and simplifies operations. It covers various aspects including financial accounting, supply chain management, inventory management, and CRM, with some systems offering Material Requirement Planning (MRP) functionality.

Modern ERP systems also facilitate seamless integration with third-party platforms, ensuring adaptability to future needs. By providing a single source of truth and real-time insights, ERP fosters collaboration, informed decision-making, and efficiency across all departments.

How much should I expect to spend on a new ERP system?

The cost of a new ERP system varies widely, much like buying a vehicle. There are three main tiers:

  1. Small businesses (from $500 to $30,000).
  2. Mid-sized companies (ranging from $30,000 to <$1m).
  3. Large, global businesses (costing seven figures),

Your choice depends on your budget and needs, and you will get what you pay for in terms of complexity and features.

Can existing data records be migrated to my new system?

Migrating existing data records to a new ERP system is a common concern for companies. 

The migration process involves accessing, extracting, and mapping data into a format compatible with the new system, often requiring significant human intervention. It's therefore crucial to discuss data migration options with your service provider upfront to understand the level of support provided.

Licensing controls may apply here too, so discussing continued access with your previous supplier is important.

While migration isn't guaranteed, it's definitely possible and Intact iQ offers data import facilities with validation layers not standard in most packages, ensuring a smoother migration.

When is the best time to implement a new ERP solution?

Choosing the right time to roll out a new ERP system hinges on several factors. You might want to think about timing it with the financial year-end for straightforward audits and starting balances. It's also worth considering a month end to keep audit trails intact and making sure you've got enough hands on deck for data cleaning, training, and user acceptance testing.

Don't forget to consider holidays and peak seasons to make sure key personnel are available and not too swamped with other work. The goal is to ensure a smooth switch to the new system without disrupting your day-to-day business.

How involved will my team be during the implementation phase?

During the implementation phase of your new ERP system, your team's involvement will vary depending on your goals and approach. You'll need to decide whether the system will drive process changes, and efficiencies, or simply replace outdated software. Many companies use this opportunity to review and optimize their processes and long-term strategies, which is considered best practice. These tasks will add to your team's workload during the project.

It's a common mistake to assume that signing the sales order for the new system is the extent of your responsibilities in the project. To truly derive value from the project, approach it as a partnership rather than a transaction. This means actively engaging with the ERP vendor and being involved in decisions and implementations to ensure the system aligns with your business goals effectively.

How easily will my staff adapt to the new system?

Adapting to a new system is crucial for its success, yet businesses often overlook the end users' experience when choosing software. When users feel excluded from the decision-making process, they may reject the new system in favour of familiar but outdated methods like spreadsheets. Prioritizing the end-user experience from the outset ensures software acceptance and caters to user needs.

Effective planning for system rollout is key to success. Think of it like adjusting to a new phone—initially, there's resistance to change, but with time, users adapt and prefer the new system. To ease staff adaptation, ensure tasks can be executed effortlessly without extensive training. Assess the system's user-friendliness in advance and involve key staff to ensure smooth functionality.

Most modern systems are reasonably intuitive, but it's essential to verify this by visiting reference sites. By enabling staff to perform their roles easily, you enhance efficiency, and productivity, and facilitate quicker adoption of the new system.

Do I need to change my PCs or server?

When contemplating a new ERP system, seek professional guidance to assess your network, PC requirements, and overall infrastructure beforehand. The investment needed will depend on the condition of your existing setup and the specifications for the new software.

Different systems have varying resource and licensing needs, impacting the project's overall cost. Additionally, your choice between on-premises or cloud deployment will affect expenses. Consulting experts ensures you make informed decisions tailored to your specific needs and budget.

What is the difference between on-premise and cloud-based ERP?

The main difference between on-premise and cloud ERP lies in their deployment and payment structures. On-premise ERP follows a traditional licensing model where the user purchases licenses per user or company, installed on their own premises. This involves a one-time payment for software and implementation fees, followed by ongoing annual payments for support and upgrades. 

On the other hand, cloud-based ERP operates on a subscription-based or SAAS (Software as a Service) model. Users pay for the service regularly—annually, quarterly, or monthly—per user. This subscription typically includes support, maintenance, and optimization services, managed by the ERP provider. The key distinction is that with cloud-based ERP, the software is hosted remotely by the provider, and accessible to users over the internet, eliminating the need for on-premise installation and maintenance.