Do You Love Your ERP?
When most people think about custom-built software for business, they think of a single application with a single purpose, like a CRM or an email client. We can understand why most businesses would not look for custom software solutions for such applications—why spend that money when there are so many options from which to choose already on the market?
But the kinds of projects we typically engage in here at Skeleton Key aren’t single-purpose custom applications. We are often building software that runs entire businesses—or at least, that runs many of their core operations.
So the question of whether or not your business needs custom software solutions isn’t answered by thinking in terms of typical apps, but rather by thinking in terms of another type of software: ERP systems and ERP modules.
So ask yourself: Do you love your current ERP?
How ERPs Came to Be Dominant (in Certain Industries)
In our experience, very few people answer this question in the positive. Some like their ERP systems just OK, some find them annoying-but-necessary…and some even loathe their current ERP. No one seems to feel their ERP is just right.
ERP (Enterprise Resource Planning) systems started showing up in the ’90s as a way to operationalize and digitize standard business procedures (such as accounting, order management, inventory control, and so on). More and more businesses began to adopt ERPs over the next two decades because ERPs could take some aspects of what those businesses did and give them a model for doing them consistently and efficiently.
Take a typical manufacturer, for example. That manufacturer might require several business software solutions because it needs several things done in a consistent and efficient manner: Job costing, assembly, ordering of parts and supplies, and so on. An ERP system can take complex processes and create some standardization around them, while also digitizing key steps (like ordering supplies or tracking jobs through a facility).
The Growing Variety of ERP Modules
So how do modern ERP systems juggle these different needs? Most do it by having a number of separate ERP modules that cover different aspects of the business. A modular design helps to rein in some of the complexity of modern ERPs. Common ERP modules include software for:
- Finance and Accounting
- Procurement and supply chain management
- Inventory management
- Job costing and estimating
- Job tracking
- Order management
- Human capital management (labor management)
What’s Still Missing? (i.e., Why Doesn’t Anyone Love Their ERP?)
So why don’t more businesses love their ERPs? Put simply: There’s no way for a single ERP system to capture everything a business needs to do, in the way that each particular business needs to do it—even with a modular design. ERPs, by their nature, must treat businesses as if a one-size-fits-all solution will be the most effective. But the opposite is true: In order for something to be widely used, compromises have to be made.
Take our manufacturing example again. There are many ERPs the manufacturer could use that have robust capabilities when it comes to things like job costing and assembly. But what if the business also needs a very detailed quality control module?
While it’s possible that the ERP they use for job costing might have an ERP module for quality control, it might not. And if it does have one, chances are pretty good that the module will not match the company’s needs 100%. The ERP, in effect, could impose its processes on the company, requiring the business to change what it does – and how it does it – to accommodate the ERP.
On the other hand, if the ERP does not have a module for quality control in the first place, then a key element is missing altogether. That suite of processes now needs to be performed manually, often using spreadsheets or paper forms. This creates a fragile and labor-intensive process, whose steps can easily fail to track or keep pace with the data in the ERP.
Regardless, many people will say that they like their ERP, as it adds some value to their organization. But no one in our experience ever says that they love their ERP, because even as it standardizes some things, it also creates the need for workarounds, manual steps, and clunky sub-processes.
Custom Software Solutions Can Augment, Even Replace, ERPs
Many of our clients here at Skeleton Key came to us because they “weren’t feeling the love” for their current ERP, and they needed a software consulting company to help them determine what to do about it. Those clients had come to realize that their ERP was not a good fit for their business after all, and they needed to either remodel or rebuild that software to run their business in a way that made sense.
This is where custom software solutions can come to the rescue. Using FileMaker, we can augment or even replace an out-of-the-box ERP to fit a business with unique needs. Here are a couple of case studies that illustrate how we’ve done just that:
A precision machining shop. A machine shop had an ERP system with many of the modules it needed for job costing and orders, but the one crucial thing they were missing was the ability to track physical items as they physically traveled through the shop. This was tricky, as many of their jobs consisted of large metal parts that did not lend themselves to attaching tags or barcodes. The shop also needed to associate a growing list of digital assets with these physical parts—things like blueprints, digital photos, and production notes. As robust as their ERP was, they were still tracking most of these extraneous bits of information using paper forms…and inheriting all the problems that come with paper. This was solved by developing a robust mobile solution that integrated with records in the ERP, took into account what was occurring on the shop floor, and provided a bridge to all of those disparate pieces of additional data.
A construction company. A construction company was using an ERP system with robust accounting capabilities, but their field superintendents still had to spend at least 30 minutes each day entering each employee’s hours into spreadsheets at the job site. Payroll was a bottleneck, too, as the payroll clerk spent roughly 15 hours a week entering that data into accounting software. The solution was to create a more integrated system, which included a custom app that could be run on iPads in the field (and off the grid). This allowed field personnel to enter data quickly, and with higher quality, which made it easier for the payroll clerk to review, and it facilitated direct insertion of that data into the accounting system after review, which further freed up the payroll clerk and reduced the opportunity for accidents or errors in data entry.
Are You the Next Example?
Again, these are just a couple of examples that illustrate how an out-of-the-box ERP failed to capture the intricate and unique details of individual businesses. Those ERPs embodied the right idea: Taking manual processes done on paper or spreadsheets and bringing them into a robust, standardized digital environment. But an ERP that was “just OK” when the business first adopted it might not be the best fit for that business today.
What processes are you shoehorning into your current software? What do you still do–or now have to do– on paper, or in a spreadsheet? What do you wish your software truly handled for you or helped you do? If you feel that there’s a lot of love being lost between you and your ERP, it might just be worth having a conversation to explore what could be done better.