A New ERP System – Yes, I Said It!

May 26, 2015

I just taught an 8-hour course on costing accounting in Indianapolis, Indiana last week. It was my first time to Indianapolis and the area which I was located was quite nice. I wish I would have had more time to enjoy the city, but basically was in to teach and then back out again. I did have the pleasure of teaching a great group of people who posed some great questions!

One of the reoccurring themes was ERP systems and companies who were about to, just had, or needed to update their system. Those that made the update told of their journey and the issues to avoid. Those that recognized the need to change felt burdened by their current system and were frustrated that change may never occur. Then, there were those about to make the change. They were optimistic and excited.

The crucial part of an ERP system is your ability work with and in the system. Not outside and around it! The system should make your job so much easier. If that is not the case, its time to fix the issue.  The answer is not a new system, by the way. Are the costing standards, assumptions, bill of materials, routings, etc. are set up correctly in your current system? Can you query data and run reports as needed based on different scenarios?

SystemIf you said yes, then awesome and good for you! You are in the minority. However, do not slack too much to give yourself a pat on the back. Do you have dashboards? Are you providing the best reports for your team members and in a timely manner? Make sure that you are not leaving anything on the table, challenge yourself.

If you are like most people then you may be saying you just cannot do that and will never be able to. Sure different companies can afford to have different things and your system may not be capable of all of the different things others can, but you can still make it the best possible. Stop using your system as an excuse, make it the absolute best possible. If it will not work for your needs, then maybe a new system is needed.

If you come to the conclusion that the only way to get what you really need is by purchasing a new system, then ok. I’m not saying purchasing a new system is a bad thing, it can be a great thing. If you do get a new ERP system make sure to do your homework and confirm that the system can do what you need and want it to do. Study how you want it set up for every possible scenario now and for the future. This will take some time to do, but spend the time! Research your standards, routings, bills of materials, etc. Make sure everything is updated and input accordingly.

Slacking on the front end of getting information together for your new system leads you to frustration and a huge waste of money on the back end. It is very stressful and you just want to get it done when implementing a new system, but do not slack off. Take the time to understand the system, do the work needed to build the system, and then take the time and money to train on the system continuously.

What are some things that you have learned from going through an ERP system update? Save someone a headache that you wish you would have been spared. And go

Categories: Cost Accounting