5 Tips On Selecting An ERP For A Project-Based Business
What Is ERP?
ERP stands for enterprise resource planning. Project-based ERP is a core system to manage the end-to-end business ﬂows for ﬁrm’s who deliver projects as their primary business operation. Integrating: business information, including ﬁnance/accounting, customer relationship management, management accounting, procurement, human resources, budgeting, and project delivery.
Project-Based ERP for Dummies
Choosing A Project-Based ERP
Traditional ERP (Enterprise Resource Planning) systems, were developed to support the needs of the manufacturing industry, and depict a company as being ﬂat; analysing information, data and resources accordingly. However, project-based companies have their own distinct needs and requirements, and – fundamentally – must be able to view their business in three dimensions. Project-based businesses need to have complete control, visibility and maximum efﬁciency of every element of their project operations, costs and resources.
Here are our 5 tips for selecting the right ERP for your project-based business:
1. Deﬁne Clear Business Goals
The direction for your ERP project and what your chosen solution needs to achieve in business terms is critical. Project-based ERP sits at the heart of achieving:
- Fact based decision making by ensuring business transparency and role based reporting
- Improved billability by ensuring fast and complete time capture
- Improved cash ﬂow by ensuring fast invoicing and tight cash collection control
- Improved project proﬁtability by ensuring baseline and project cost control, scope tracking and pro-active progress evaluation
- Improved staff utilisation by ensuring corporate resource overview for short and long term planning
- New business wins by ensuring sales pipeline control and full client insight
2. Involve All Relevant Stakeholders
Selecting an ERP system is not something that is done in isolation and its selection and implementation will touch all facets of your business. Therefore garnering support from throughout your business at the outset is crucial – make sure everyone understands the beneﬁt and what it means to them directly.
3. Deﬁne Your Business Requirements And Workﬂows
Don’t get carried away with additional ‘bells and whistles’ functionality if it doesn’t support your core business functions. In essence, for a professional services organisation every aspect of the project needs synchronising – every single transaction is tied to an account and a department, as well as the over-arching project. Therefore project-based businesses need to select and deploy an ERP which provides granularity to analyse and manage their entire organisation from the following dimensions;
- Accounts: This does what it says on the tin, it’s the ledger which describes all expenses and income, including everything from travel and accommodation to third party costs and partnerships. It’s where the cashﬂow is taken care of and tracked. Selecting an ERP which ensures accuracy throughout is key to measuring proﬁtability.
- Department: This is the area within the business which is involved in the project, from the managers in charge to those carrying out activity on the frontline. This can be an already identiﬁed division within the business, a specially designated or created group assigned to the project. It’s who is doing the work, essentially, and within this you need to allocate labour costs in order to make sure the project is running at maximum efﬁciency – otherwise, your proﬁtability might suffer alongside productivity.
- Project: Everything involved in the customer or client’s project needs to be included within this umbrella – it’s where the economic value of the project sits within the business, and from where revenue and billing emanates.
4. Look For A System Which Installs Best Practice Throughout Your Business
Improving productivity and proﬁtability should be key deliverables and measures of success, so ensure you chose a vendor who has a track record of delivering these for their clients. By demonstrating their experience within your industry, your vendor should become a partner in advising you as to the optimal processes for reaching your business goals, and the ERP system built to support your business model.
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5. Agree Realistic Implementation Expectations
Rome wasn’t built in a day, and the same is true for an ERP implementation. Choose your ERP with a clear understanding of deployment milestones and an agreed project plan. Change management and a thorough approach to staff training are also key components in getting a new ERP system deployed. The decision between electing for an on-premise system hosted on your own servers versus a cloud model will also have an impact on implementation timelines.
Take The Next Step
Find out more about ERP and its value for your firm by downloading our Project-Based ERP for Dummies eBook.
Project-Based ERP for Dummies
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