What do a maker of grooming products for men, a fast-growing moving business and a specialized shipping logistics provider have in common? All three had intractable challenges that were addressed by an enterprise resource planning (ERP) system.
In all cases, their journeys started with ERP implementations. Once up and running, these disparate companies got the results they needed: more sales without adding new employees, faster and more accurate payroll processing and the ability to deliver tens of thousands of orders per day without delays or errors, respectively.
What Is an ERP Implementation?
An ERP implementation is the process of installing enterprise resource planning (ERP) software, and then making sure your team is making the most of the technology. The process includes three main phases:
- Installing onsite software and/or contracting with a SaaS provider. Often, companies seek help from the vendor or an implementation partner specializing in ERP, the vertical industry or specialized use cases.
- Migrating data from your previous system or systems into the new ERP.
- Training the finance team to use the new software. That process may include knowledge transfer from employees who previously used the system or formal education from your implementation partner.
The success rate ERP implementations is improving thanks to a focus on user experience, specifically simpler interfaces, more configuration flexibility, mobile functionality and increased automation. In fact, IDC’s 2021 SaaSPath Survey showed that "ease of use" is the most important vendor selection criteria for those purchasing finance applications.
Best practices to ensure success include organizing a strong implementation team of leaders from all areas of your company, from sales to accounting to operations. Ask them: What problems would we like this new system to resolve?
When choosing the ERP, it’s important to ensure it can easily integrate with other financial systems, and those of your key partners, and that you can be up and running in a reasonable timeframe, preferably 90 days or less. Finally, make sure your finance policies and procedures are aligned to make the most of the new system.
An ERP implementation is a process: ERP vendors and reviewers alike recommend carefully evaluating ERP vendors and/or partners before beginning, as well as taking things one step at a time, setting expectations with realistic planning timeframes and a comprehensive checklist mapped to your company’s goals for the system.
3 Successful ERP Implementation Case Studies
Let’s look at three companies that found success with their ERP implementation projects, and their key lessons learned.
ERP Case Study #1: Fulton & Roark
Fulton & Roark, a retailer of men’s grooming products, is an example of a successful ERP implementation.
Prior to upgrading to full-featured ERP, the North Carolina-based business tracked its inventory in a spreadsheet and its financial data in desktop accounting software, Sage Live. When the company began doubling sales year-over-year, leadership felt its current processes weren’t keeping up. Spreadsheets couldn’t account for changing inventory costs, and the accounting software didn’t have the workflows necessary to record the cost of goods sold (COGS), an important financial metric.
As a result, the Fulton & Roark team did double data entry — manually.
To centralize all work in one place, the company’s co-founders implemented NetSuite ERP. After a three-week implementation process, changes were immediate, according to team members. Finally, the Fulton & Roark team was able to:
- Catch and correct bookkeeping mistakes related to inventory.
- Stop working with external accountants, growing both unit and dollar volumes significantly with no extra headcount.
- Increase sales roughly 50% year-over-year without increasing headcount.
- Get a more accurate picture of margins and inventory, which helped grow its ecommerce operation.
- ERP implementations don’t have to drag on — Fulton & Roark’s team was up and working in about 20 days.
- The company’s story also emphasizes a major success factor: Getting management committed to an ERP project. In this case, the co-founders initiated the project, which consultants say often spurs employee adoption.
ERP Case Study #2: N&N Moving Supplies
N&N Moving Supplies, a family-run distributor of moving equipment and supplies, successfully implemented an ERP system after expanding from one location in Georgia to three locations in multiple states and more than quadrupling its workforce.
Running on QuickBooks and a third-party payroll provider, it was nearly impossible to keep accurate time records and reconcile payroll with general ledger accounts. So, N&N turned to ERP to manage its accounting and payroll processes. During the implementation process for NetSuite ERP, N&N worked with a NetSuite partner, NOVAtime, to add a time-clock solution to the main system.
With this in place, N&N was able to:
- Reduce payroll processing time by 84%.
- Balance accounts faster.
- Improve the accuracy of hours and vacation time counts.
- See labor-cost trends across its three locations.
- Give employees access to personalized ERP dashboards on iPads at each of its sites.
- N&N’s case study nods to another major implementation success factor: managing employee morale. ERP projects often fail when execs and other employees don’t feel a sense of buy-in. By providing personalized dashboards — and ideally explaining their benefits to employees before the implementation — N&N avoided this pitfall.
- The case study also shows that a third-party partner can be helpful in tailoring the ERP system to precisely fit your company’s needs.
ERP Case Study #3: Green Rabbit
Once upon a time, two friends launched a candy wholesale business. Then, they ran into a problem: shipping melt-prone chocolate bars during summer months. After the pals designed a heat-sensitive supply chain, other food companies turned to them for help. The duo rebranded as Green Rabbit, a supply chain logistics provider specializing in fast delivery of perishable goods.
That shift in strategy tested the company’s current processes, which relied on QuickBooks, Excel and email. Green Rabbit’s multiple databases couldn’t communicate with one another, making real-time data analysis impossible. The warehouse was often waiting on help from the IT team, too.
Green Rabbit chose NetSuite ERP, and the NetSuite professional services team got the company up and running on the system in three months.
Green Rabbit now:
- Helps customers ship candy, snacks and more across the country in 24 hours from one of three different warehouses, without inventory errors.
- Delivers tens of thousands of orders per day, without delays.
- Gets guaranteed error-free data from its ERP system, instead of risking errors from manually entered data.
- Could triple its order volume, if desired, without impact to its systems.
- When implemented correctly, ERP makes it easier to manage a complicated supply chain, as Green Rabbit’s case study shows.
- ERP is pivotal to growth. Green Rabbit implemented ERP after it grew substantially and because it anticipated further expansion.
Many growing companies like those profiled here ask: “What is the business case for ERP?”
Besides the takeaways from our case studies, it boils down to agility. When finance teams stop peering at dozens of spreadsheets and paper records, they can get strategic. By helping executive and business colleagues visualize data, growing firms can forecast future trends and adapt quickly to beat competitors.
ERP Success Factors
ERP systems can revolutionize businesses and ease their paths to growth, but successful applications of them share some common traits. The first is employee adoption and morale, which requires encouraging buy-in by presenting the ERP in a way in which it will directly benefit the end users. Providing dashboards and solutions tailored to each business makes this easier to do — and tagging in a third-party partner to help with a tailored implementation is an effective way to accomplish this. Also important is planning and executing the implementation efficiently, while having realistic expectations for the timeline.
What Are the Challenges of ERP?
Implementing an ERP can mean overcoming obstacles. Two of the most commonly cited ERP challenges are:
Choosing the right vendor. Obviously, choosing an ERP system that doesn’t fit your company’s needs will likely result in a failed implementation. Many advisers recommend evaluating around five vendors before choosing which ERP to purchase.
Companies should choose a vendor that has experience with your company’s vertical, type (product or service) and size; can provide a hands-on demo; understands the tax laws and regulations that apply to your business; and is sure to be in business in five years.
- Getting employees to support the change. As mentioned, teams may resist the transition to ERP if you don’t show them why the new system will be helpful to them. Explain how ERP will make each team’s everyday tasks easier before the implementation begins and ensure plenty of time for training during the process.
Why Do ERP Implementations Fail?
ERP implementations can fail without proper risk management. In other words, leaders need to anticipate what might derail the project, then plan.
In one often-cited case, for example, a multinational distributor’s implementation epically failed, resulting in major shipping delays and lost sales. It turns out the company had operational issues before the implementation even began, as it had just acquired another company and was having trouble integrating the new subsidiary’s operations into its own. Company leadership should have managed that risk by identifying and fixing those operational issues before the ERP implementation began.
ERP implementation is a process. It requires lots of planning to ensure success. However, your company isn’t the first to go through it. Consider case studies of successful implementations, choose the right partner and your business will enjoy the benefits of the system, quickly.
If you’re considering an ERP implementation, schedule a consultation with NetSuite.