How to implement an integrated system quickly and cheaply in a small or medium firm

A few simple rules can considerably increase the chances of successful implementation of a computerised system in a firm.

Currently, ERP computerised systems designed for small and medium firms are growing in popularity. These systems are so functional that they satisfy the majority of needs connected with the management of a small firm. Apart from the accounting module, which is as a rule the core of the system, they contain such subsystems as: sale, purchase, CRM, production, reporting, controlling, warehouse management, and frequently personnel/pay solutions. In this article we are going to present a few simple rules which may help in choosing the right system and a suitable partner who will assist with implementing it.

How to identify a customer’s needs?

The first step to successful implementation of the ERP software is for a customer to identify their needs, which, as we all know, is a very difficult task. The main problem lies in the fact that each future user of the system presents his list of wishes and it is difficult to dis-tinguish the essential items from the inessential ones included in the list. Substantial delays in the project have occurred in our practice because an employee responsible for preparing in-voices insisted that to search for a customer he should click twice, not three times. Obviously, a customer should decide what is important for him and what is not. However, he should be made to realise that a trivial wish related with the use of the system may increase his costs by, for example, ten percent.

That is why an initial analysis carried out together by people responsible for the sys-tem on behalf of the customer and consultants of an implementing company is such a vital and critical stage of the implementation. Expensive (from a dozen or so % and upwards of the project value) though it may be, such an analysis makes it possible to reject a customer’s un-reasonable and high-priced demands and specify the target functionality of the implemented system at the same time.

Contrary to how it might seem, it is often easier to identify needs and to prepare an implementation plan in a big firm. In very small firms family relationships are developed, which results in the fact that even lower-level staff may determine the needs concerning the functionality of the system. In general, in bigger firms a rigid hierarchy is established, and what is more, computer departments are usually more powerful.

The fact that generally the longer the system is used, the greater the needs become, poses another problem which makes the customer’s needs difficult to be identified. It should be also noted that when the integrated system is implemented, the structures and routines of the firm have to be changed, which also means exchanging one system for another one. Since people are usually conservative by nature and they do not like changes, they will always try to adapt a new system to an old one.

However, after the new application has been used for a few months, it turns out that it creates new possibilities, which results in an increase in the needs. Very often misunderstand-ings connected with this arise, because the customer tries to make the implementing company adjust the system to these new needs within the same project.

At the stage of an initial analysis it should always be taken into account that the im-plementation may be rejected and the project may be given up. Obviously, this does not often happen.

How to assess an implementing company?

Which criteria should be considered when a company implementing the software is assessed? Often a customer can choose from various entities which render similar services, for example, among global software suppliers. Obviously, it is important how long the com-pany has been dealing with implementing integrated ERP systems. It is a very specific type of ability and the gaining of experience is measured in years, not in months. It would seem that it is a good idea to request a reference visit to former customers of the selected supplier. How-ever, it should be noted that the choice of reference customers is seldom objective and the results of such visits should be evaluated with caution.

Consultants’ qualifications are another important issue. It is obvious that they should be experts in databases and computerised systems. In general less attention is paid to their skills in accountancy and inventory management, whereas in fact a consultant implementing a financial and accounting system should know accountancy very well. Very often this element of the consultants’ training is neglected.

As has already been mentioned, the implementation of the system is a serious inter-vention in the “living being” of the firm. In our activities we have encountered a situation where the implementation failed because it was not understood that to implement the system the organisation of the firm had to change. One firm owned twelve warehouses, each of which had a different index system, and after a few months of the implementation it turned out that there were actually fourteen warehouses. The attempt at the unification of the material system (which is indispensable in an integrated system) failed.

Usually the organisation of the firm must be simplified, and that is why the consultants should have considerable knowledge of accountancy, circulation of documents and organisa-tion of processes in the firm.

Today’s IT business is characterised by a weak attachment of consultants to employ-ers. A lot of work is performed by freelances, which unfortunately often lowers the level of the implementation.

Additional modules – necessity or opportunity?

Today’s ERP systems satisfy a considerable part of an average customer’s needs. However, in practice it is always necessary to provide a customer with additional modules. As experience teaches us, the preparation of the specification of additional modules poses the first problem. Customers do not know what they want, and even first-year IT students under-stand that some activities are not worth computerising.

Ordering parties often do not realise this and try to make the supplier include all the possibilities. For instance, a customer in Poland demands that payment by cheque should be possible, while this form of payment is practically unused in Poland, though theoretically it can occur.

In many cases, however, a customer’s needs are really justified and a certain potential in the software production is necessary. It is much better if the company supplying the soft-ware has its own software capability. Thanks to this and to its experience in implementation such a company can considerably reduce the costs and the delivery time of additional modules made to order.

The above comments surely do not cover all the problems which arise when an inte-grated system is being implemented in a small or medium firm. We have aimed rather at pre-senting general guidelines which result from our many years’ experience as a company im-plementing software.