Key Requirements for a New ERP System

Introduction

For over thirty years AccuNet has assisted small to mid-sized businesses select and implement financial systems to run their businesses.  Below we have distilled the guiding principles that AccuNet and our clients use in selecting their next ERP system.

All-in-One

As much as possible, we strive to get all the core business processes required to run our enterprise from one software solution.  If CRM, MRP, distribution, ecommerce, time and expense management, document management, project management, or any other module are all from the same software provider, you reduce double entry, cut integration costs, improve data integrity, streamline business processes, increase visibility, and unify the corporate structure.  A little compromise from line of business managers will pay compound interest over the life of the system.

Unlimited Licensing

Per-user license costs take the enterprise out of enterprise resource planning.  In selecting a financial system your goal is to push data entry to the person most responsible for the transaction, and push targeted reporting to all people who can act on it.  A per-license cost forces value decisions rather than opening up access to improve and streamline business processes.  Department managers and project managers should be getting dashboards and alerts that keep them up to date on key performance indicators. The entire purpose of an ERP system is to share valuable financial information beyond the four walls of the accounting department.  Do not let licensing handcuff your productivity.

Microsoft SQL-Based

All financial systems use a database and the clear winner for small to mid-sized businesses is Microsoft SQL.  Microsoft SQL is the most popular, the most widely supported by other software vendors, and it self-maintains.  Knock-off versions of SQL like MySql and MongoDb that some publishers use to save cost lack performance, compatibility, and features.  Oracle is a large database engine that is trying to push down into the mid-market.  Oracle requires more maintenance, and often a full time person, just to maintain the database.  Keep it simple and go with the market winner – stay with Microsoft on this one.

Universal Workflow Engine

Older financial systems often have a few hard-coded workflows, maybe a purchase order or time card approval, but newer systems have a universal workflow engine.  The power of this cannot be overstated.  It allows you to codify business rules into your financial system.  For example, you can set up a workflow that allows some people to create a new account, but the controller approves it before it can be used.  You can set up approvals for any expense over a particular amount.  You can set up approvals to review any new customer or vendor before processing transactions.  All the rules for how you do business are built-in, avoiding errors and reducing employee training.

Mobility

The work force is changing and many employees do some of their work from their mobile phone.  Mobile access keeps employees connected and makes sense for approvals, alerts, time, and expense entry.  Modern ERP systems should come with a mobile solution and it should be included in the price, not an extra per user charge.

Outlook Integration

Outlook is the most common tool used by businesses.  If your ERP system integrates with Outlook, wide ranges of productivity tools are available for the ERP system. Outlook integration enables e-mailing of Invoices, timecard reminders, AP payment notifications, statements, and scheduled reports automatically.  Accounting tasks and calendar reminders integrate with Outlook.  If the software vendor is not using Outlook they often try to use SQL mail or build their own e-mail engine, which we have seen fail repeatedly.

Own Your Data

This is hard to believe but in many cloud-based ERP systems, you do not own your data.  If you have a billing dispute, the ERP publisher can hold your data hostage.  Others will give you your data but it comes in hundreds of Excel spreadsheets like COA master, vendor master, invoice transactions, credit transactions, payment transactions, etc.  This means a major conversion project as you try to piece together your financial data.  Software publishers often charge exorbitant fees for a dump of your data.  Make sure you understand the legal language in your ERP vendor’s license agreement.  You should be able to get a copy of your database in a relational database like SQL, which is much easier to move to another ERP system.

Dashboards, Queries, KPIs, and Alerts

Modern ERP systems come with these features, and they should be built-in and included in the cost of the system.  You can think of these features as business intelligence that many companies add as an extra cost and pay huge consulting fees to implement.  These features should be easy enough that a power user can set them up themselves.  Examples are accounts or sub accounts added in the last 30 days, customers with balances over x days, projects within 80% percent of budget, revenue and cost for my department compared to budget, etc.  The information varies by business, but they are the frequently ask questions in your organization, and the answer is presented in an easily consumed format to keep your business on track.

Excel-Based Financial Report Writer

AccuNet has worked with dozens of financial report writers and all ERP systems have one.  Most only report on GL detail, although some have drill down to AP or order transactions, which is good but not enough.  Since most financial people work in Excel, it makes sense that the financial report writer is Excel-based.  The ideal financial report writer is Excel-based, always connected live to the database, has drilldown, and can pull budget and project information into financials.  This gives the power of a roll up report that shows projects with budgets rolling up to GL accounts with budgets, compared against the corporate budget.  This is the holy grail of financial reporting.

Broad Third-Party Support

In requirement one, we stated the goal of a one publisher solution, but the reality is your business will need to integrate with other systems and may have specific needs that demand a specialized app.  Your next ERP system needs to be open.  An open ERP system will have a SQL database (requirement three), have published API’s (application program interfaces), use published web services, have open source code, and include strong import/export features to every data entry screen.  A respectable number of third-party apps is in the hundreds and often nears one thousand.  You will see apps from Microsoft like Office, SharePoint, Power BI, Skype; major payroll systems like ADP;  credit card companies; DocuSign; Drop Box; specialized shipping systems, etc.  If you have any specialized industry solutions that must stay in place, then have those solutions talk to your next ERP solution before making a final solution.

Conclusion

AccuNet has great experience with this process and we can help you build a requirements document that will avoid surprises, narrow the number of choices and focus your evaluation process.