Enterprise Resource Planning (ERP) software is a “must have” today for distribution businesses. Certainly, as more distributors equip themselves with the latest in distribution management applications, the sector will grow more competitive. Those with the technological edge will likely do best. Still, the idea of adding ERP or replacing a legacy ERP system can be daunting. Acumatica has addressed this concern in a helpful new white paper for distribution businesses called A new ERP System doesn’t have to slow your schedule – or your business. Here are some of the highlights:
About ERP software for distribution businesses
Acumatica Distribution Edition is an example of the kind of modern, cloud-based ERP that distributors are embracing today. It helps distribution companies manage supply chain and logistics activities, warehouse operations, inventory, orders, requisitions, sales, purchase orders and so forth. As an integrated suite, Acumatica Distribution Edition automatically flows data from these activities into its accounting and financial management software modules.
Best practices for ERP implementation
Having worked with many distribution businesses on the selection and implementation of ERP suites, we found the white paper to be accurate in describing the practices that make for a successful ERP launch. The paper describes how the ERP implementation process is only partly about the software itself. Implementing the right way involves understanding how the business works—and deploying software to meet those requirements.
Identify your strengths and weaknesses
As the paper notes, the first step is to take a good look your current operations. Identify what your system does well, and what it doesn’t. With this information in hand, you have the knowledge to select a system that meets your needs. At this stage, it’s also wise to research the quality of vendor support you’ll get and understand how the system will grow and evolve over time with your business. An implementation partner can help in this process.
Choose an implementation strategy
It may be tempting to do a “big bang” deployment, where you set up ERP, flip a switch and expect it all to go great. This is not always the best approach. It is definitely a high-risk strategy. It may make more sense to pursue a phased implementation, e.g. set up and launch warehouse management, then sales management, then purchasing and so forth. You’ll learn a lot along the way and reduce the risk of disrupting your business if the launch of each segment doesn’t go right.
This approach also keeps costs down on a periodic basis and avoids stressing out the implementation team. Your chosen system supplier and independent consultants can help you figure out the best implementation plan for your business. Remember, though, that not all ERP systems can support this level of flexibility.
Ask the hard questions about functionality and road maps
Don’t be afraid to ask tough questions of the system supplier and the implementation consultant. You’re entering into a long-term technical and financial relationship. You have to be confident the solution will work for your needs. Ask how complete the solution is. Ask if it includes functionality that you may not need today but which could be important in the future. Ideally, the system will be structured as independently functioning units. Some call this a module-based architecture. At the same time, the modules and apps have to integrate well and use the same database structure.
As an Acumatica Gold Certified Partner, we can help you think through your ERP options and implementation scenarios for your distribution business. If you’re thinking about ERP for your business, get in touch with us.