When Talking ERP Needs, Does Business Size Matter?
When Talking ERP Needs, Does Business Size Matter?
Julie Stepp, CPA Senior Consultant – Fahrenheit Finance November 2013
Since When Does Size Not Matter?
Take it from me, guiding an organization down the path to ERP implementation is a maddening exercise when things go right…and a catastrophic nightmare when they don't. The path to implementation is fraught with hazards. If the requirements are not properly ‘brainstormed’ on the front end, no amount of implementation talent is going to save the project on the backend. It will surely fail.
One thing I’ve been asked over many a conversion: does the size of my organization impact my requirements? This is tricky but the truth is that there is not a direct relationship between company size and system requirements. The business requirements come from internal processes, and the complexity of these processes will drive the ERP system selection. Just because an organization is small does not mean only a low-octane product is in order. In fact, assuming that a small business has but a few processes, or a less complex product or less demanding customers will surely get you in trouble right off the bat.
For example, I have a manufacturing client who requires the ERP system to manage and track the receipt (bill of materials), flow of raw materials (purchasing and use), production process, final product receipt and distribution to customer. Whether the product is made with three materials or twenty, or even out-sourced for that matter, the process is still the same.
Customers and market can impact requirements.
Often the customer or product market drives the system requirements. For Example, while working for a consumer products company, I encountered a situation where customer demand for e-communication (related to incoming POs, delivery notifications, out-going invoices, etc), was the primary driver of change. In another example, global expansion and the need to convert a US standard item number to the more voluminous GTIN (Global Trade Item Number) prompted the selection of an ERP system that could house and maintain this particular information. The size of the organization mattered little.
Having said all of this, it is important to acknowledge there are indeed certain considerations that are specific to a smaller business. Most relate to spending limits or how the company views the role of information systems or even the choice to handle some requirements outside the ERP system. But that does NOT change the reality of what is truly a requirement and what can be lived without. Requirements are just that…required.
What does this all mean as you choose an ERP system?
The requirements of a business to operate are the same for a large or a small company making the same product. Select a software provider that is keeping up with client needs and making improvements as business environments change. If you choose an ERP system which does not have some capabilities that your business could use, make sure the impact of performing these tasks manually/ in spreadsheets is fully understood. Always consider business growth in your decision. Just because you may be able to handle some tasks manually today, does not mean you can when the business has grown over a few years.
Julie Stepp is a CPA with a unique combination of expertise in financial accounting and financial system implementations. She is an expert at implementing new systems, helping clients use existing systems better and improving processes to be more efficient. Julie brings to our clients over 22 years of accounting and system implementation experience.
