by Grant Decker | Mar 20, 2024 | Blog
Learn what Enterprise Resource Planning (ERP) systems are, how they can benefit your business, and how to implement them effectively. Keeping your business profitable takes continuous management of all the resources that make it up. Letting this slip leads to inefficiency, which increases your costs and reduces revenue. There are many ways for you to stay on top, but as your business grows, this can get more complex. Before you know it, you’re juggling product stock, cash flow, and people challenges all at the same time, with no way of improving these areas and ensuring they work together.
In this article, we’ll explore what this type of software is and how it can benefit your business no matter how big it grows.
Here’s what we cover:
- What is ERP?
- 8 benefits of ERP
- ERP in action
- ERP implementation challenges
- Final thoughts
What is ERP?
Enterprise resource planning (ERP) software lets you integrate and manage all your core business processes in real time.
That includes everything from finance and HR to supply chain and customer relationship management.
In other words, ERP acts as a central, unified hub that connects your data and lets you improve processes across many areas of operations.
Where some businesses have specialist solutions in each department (e.g. one for paying employees, one for managing stock levels, and another for storing customer details), ERP users have the advantage of keeping everything connected.
This brings many benefits, particularly to complex, medium-sized businesses that struggle to extract the full value of multiple separated solutions.
8 benefits of ERP
1. Boost efficiency and productivity
By enhancing multiple areas of your operations, ERP systems provide the opportunity to remove a large volume of manual processes with a single solution.
For example, your finance team could automate generating invoices, while your sales team automates the processing of customer orders.
Since every corner of the system is working from the same data, any process that can’t be completely automated is at least streamlined.
You can reduce mistakes, duplication of effort, and the use of outdated information.
People from every team can do more with fewer resources, in less time, and with fewer mistakes.
2. Enhance data accuracy and integrity
Having a single source of real-time data for your entire operations is perhaps the greatest strength of ERP.
This gives every department the best possible foundation for decision-making, since the information and insights they’re acting upon are always accurate and being used by other teams too.
This is essential for strategic planning and allocating resources, which often relies on teams ensuring their goals and actions are aligned with one another.
3. Improve collaboration
Speaking of alignment, the integrated nature of ERP makes it great for eliminating silos between your departments.
People can collaborate more easily, both within their teams and across functions.
The sharing of data and other resources, as well as dedicated features specifically designed for collaboration (such as those within project management modules), does the following:
- Breaks down communication barriers
- Facilitates smoother project execution
- Keeps everyone on the same page.
4. Save costs
Being able to efficiently allocate resources and get fast access to financial insights will help you consistently find ways to save costs.
For example, your procurement team could use an ERP system to manage and compare vendors, leading them to spot more competitive prices and negotiate better deals.
This can be the case for almost every area of the business, helping you directly use ERP to boost your bottom line.
5. Delight customers
A unified view of all your customer data allows you to find ways to delight those you service.
Customer relationship management (CRM) capabilities give you more control and visibility over every customer touchpoint, from tracking interactions and learning their preferences, to receiving their feedback.
This gives you everything you need to tailor your services, offer more personalized and timely experiences, and build stronger relationships.
6. Simplify regulatory compliance
Many ERP systems have compliance features embedded into their modules.
This minimizes the effort required from your teams to ensure you’re doing everything correctly, whether that’s how you’re managing sensitive data, running your finances, or anything in between.
These features will be tailored to the region you’re working in and are often automatically kept up to date by the software vendor, which means you’ll be able to stay compliant even as rules change.
By removing so much friction from compliance, you’re not only protecting your business against potential fines and legal action, you’re also able to instill more trust in stakeholders.
7. Scalable and adaptable
Today’s world is unpredictable.
ERP systems are designed to accommodate this by allowing you to scale different areas of the software as you need to.
If your business suddenly grows, or you need to quickly shift strategies, you can adjust the parts you need to suit.
For example, you might be pushing to expand your product line and need to integrate new sales channels.
ERP can evolve as your business does, and help you adapt to unexpected external shifts without compromising efficiency.
8. Data security and confidentiality
Most ERP solutions include robust built-in security measures that are perfect for protecting data confidentiality.
From encryption and access controls to regular security audits, they ensure any sensitive information you’re handling is protected, which creates confidence in stakeholders, and enhances your reputation in the market.
ERP in action
Organizations in every sector can benefit from giving their business processes a central hub.
By linking everything together, ERP can streamline your entire operations, from the point where your customers buy products, through to manufacturing, and delivery.
Empire Candle is a great example of this. After a rapid growth period, the company brought in Sage X3 to help manage inventory and manufacturing.
This sudden expansion made determining supply to meet demand much more challenging, so an end-to-end solution to manage both efficiently was chosen.
Robert Turtledove, president and CEO of Empire Candle, says: “The right systems don’t just make IT better or technology better. They make the company better.
“That’s what you want. This is the central nervous system of the company.”
Having such control of operations has saved Empire Candle 30% of unproductive labor, with productivity increases helping the company save around $400,000 per year.
ERP implementation challenges
Leading ERP solutions are designed to be fast and easy to implement, even for complex businesses. However, there are some common challenges that can arise if you don’t take a considered approach.
Here are the hurdles you might encounter and some strategies to overcome them.
Challenge 1: Resistance to change
It can be difficult to get employees onboard with new processes and technologies, especially if you’re a long-established business and your people have being doing things the same way for a long time.
You need them to buy into the new system, otherwise it won’t be used to its full potential.
Solution 1: Conduct training
A lot of the resistance will be down to a lack of confidence or knowledge of how to use a new system.
If you conduct comprehensive training and highlight the benefits, most will see the value and start to embrace it.
Also, offer ongoing support and ensure everyone has the resources they need to keep up to date with the software and its capabilities.
Challenge 2: Data migration
To make the transition as smooth as possible, you’ll need to migrate the data from your existing solutions into the new ERP system.
This can be an intricate and lengthy process, and, if done incorrectly, can cause problems later due to data discrepancies.
Solution 2: Meticulous planning and testing
Think about how you’re going to migrate data well in advance of bringing the ERP system in.
Create a detailed plan of how you’ll extract data from each existing solution, working closely with current vendors to do this accurately.
You can also ask the ERP vendor which additional tools can be used to transfer data.
And once you have the system in place, do some data validation and testing before it goes live.
Challenge 3: Customization
Being able to customize ERP is great for helping you achieve specific business goals.
However, sometimes this introduces some system instability that you may have to compromise on.
Solution 3: Set priorities
Identify which customizations are essential, and which you could live without.
Work with the ERP vendor to understand what sacrifices each might require, and let them guide your decisions on tailoring the solution.
Challenge 4: Integration with existing systems
Even with a new ERP system, you may still be keeping some software that you’ll want it to integrate with.
This can present compatibility issues, but if you neglect integration, you’re more likely to maintain the silos that ERP is so good at eliminating.
Solution 4: Compatibility assessments
Work closely with ERP vendors to assess compatibility before committing to bringing in their solutions.
When researching your options, ask whether systems have APIs that allow integration, and work with third-party IT experts if you need to.
Challenge 5: Budget overruns
As with any large implementation project, there is always the potential for the budget to creep beyond your initial estimations.
This can be down to how the implementation is managed–both by your own team and the ERP vendor–as well as the technical complexity of the solution itself.
Solution 5: Cost analysis and planning
Before bringing an ERP system on board, conduct a thorough cost analysis and err on the conservative side.
Ensure you have contingency plans in your budget to create some room for unexpected mishaps that require more money to solve.
Take a phased approach to implementation, starting with critical functionalities that provide the most value.
To control costs internally, make sure you have a detailed implementation plan that outlines tasks, timelines, and responsible stakeholders.
Final thoughts
When implemented correctly, ERP systems can help you better manage your business operations.
Having a single, fully integrated system for all your departments will help you work more efficiently, give you faster access to insights, and reveal ways to enhance profitability.
Bringing in an ERP system also gives you the opportunity to get rid of all those under-used apps that aren’t adding much value and that may even be creating friction between your teams.
With this in mind, think of ERP as a strategic investment that could not only boost operational efficiency but also improve your internal culture by removing barriers and making life easier for your people.
by One Vision | Nov 16, 2023 | Blog
Surviving and thriving in business regardless of external financial conditions might sound too good to be true. SaaS is a highly competitive industry, and even the top players in the market can have their good fortune reversed if they aren’t constantly vigilant.
Developing a hawk-like focus on your metrics–and just as importantly, knowing which SaaS metrics to watch–can help you weather virtually any economic storm. Metrics are vital tools that help you understand:
- Where you’ve been: In business as in life, it’s critical to take an honest assessment of your past performance. Metrics give you objective signposts about your day-to-day effectiveness or lack thereof.
- Where you are: Knowing your present performance helps you stay realistic about timelines and trajectories. It’s essential to manage your expectations without losing your ambition.
- Where you’d like to go: The most valuable thing about SaaS metrics is their ability to jumpstart your progress toward your goals. Whether your quarterly or annual plans involve growing subscribers or revenue, lowering churn rates, or something else, metrics can help them become realities.
Which particular metrics should you be watching, and why?
Voluntary and Involuntary Churn
During an economic rough patch, your churn rates should be one of the first places you look to get your bearings. As a SaaS CFO, we doubt you’re new to the overall concept of churn. You’re probably aware of its enormous impact on your net revenue.
But you might not know that there are two distinct kinds, and each has its own management strategies. The two types you should be monitoring are:
- Voluntary Churn: Voluntary churn is what it sounds like: users have voluntarily decided to unsubscribe from your service. Sometimes the reasons for this are apparent and quickly correctible, and you can win back lost business. But in other instances, you might consider directly reaching out to your customers and asking them about changes or service upgrades they’d like to see.
- Involuntary Churn: Involuntary churn occurs when a problem arises with payment processing. The user’s payment failed to go through, so they were unsubscribed involuntarily. Often, the issue is on the user’s side (expired or canceled card, and so on), and they’ll correct it and resubscribe. But there’s always the potential that the error is on your end, so be sure to stay on top of your payment processing.
Our next recession metric is just as crucial as your churn rates. But unlike churn, which is more about managing external negatives, this one puts a bit more direct control back in your hands.
Is Your Cash Burning Up?
Although that’s a great question for everyone to ask themselves during a recession, it looms even larger in the minds of SaaS CFOs.
Your cash burn rate (CBR) shows how quickly you’re burning through your financial resources. The equation used to find your CBR is:
CBR = Cash / Monthly Operating Expenses
Your CBR is measured in months. For instance, if you have $2,500,000 cash on hand and your monthly operating expenses are $250,000, your CBR would be ten months.
Your CBR is all about maximizing and stretching your dollars and cents as far as they’ll go. Be sure to take a thorough look at every aspect of your daily operations to see where you might be able to trim the fat.
A great way to do that is to automate every aspect of your department that you can. Board members and investors will want to know that you’re doing everything possible to cut costs during hard times.
Take It Month By Month
When the economic seas start to get rough, it helps to narrow your time horizon. Slowing down and taking everything one month at a time can help your entire team operate more optimistically and effectively.
Your monthly recurring revenue (MRR) is the foundation of your annual recurring revenue (ARR). So it pays, literally and figuratively, to preserve your MRR in any way you can.
A few effective strategies for doing that include:
- Catering to the committed: Your most committed customers form the backbone of your ongoing revenue. Showing a bit of direct gratitude can go a very long way. Consider special offers or perks for members who stay with you for specific periods of time and tactics of that nature. Everyone loves feeling appreciated.
- Offering intro discounts: If your potential customers get the recession jitters and new signups start to drop, don’t despair. It’s human nature to perk up at a great deal: offer some.
- Sway the fence-sitters: Have someone on your team comb through reviews and other user-generated content related to your brand. See what you find in common about features or benefits your service might be lacking in the minds of your customers. Address their concerns and proactively make it known that you are.
Choose and use one of these strategies (or combine them), and you should see an uptick in your MRR relatively soon.
Hard Times Call For Smart Teams
In the world of SaaS accounting, there’s no smarter long-term choice than opting for automation. We can help you optimize practically every facet of your department to thrive for years to come.
by One Vision | Nov 16, 2023 | Blog
If you’re using Salesforce, congratulations, you’re in good company. They bill themselves as the world’s number-one CRM platform and rightfully so. I’ve been both a Salesforce user and administrator for more than 20 years, though the latter is not part of my current role. I’ve met and spoken with Mark Benioff, and he is a true mensch.
Now, if you’re using Salesforce along with QuickBooks or are considering this, we need to talk. Some of us recall the Salesforce tagline “No Software” as it’s a cloud-based software-as-a-service offering. Unlike Salesforce, QuickBooks started out as desktop software and indeed many of its users are on the desktop version while others use QuickBooks Online. Besides where the platform resides, there are other major differences as QuickBooks Online delivers less functionality than the desktop version. And if you want to connect QuickBooks to Salesforce, your options are confusing at best.
QuickBooks offers its own Salesforce connector for QuickBooks Online Advanced. Look at its current customer ratings, which as of this writing scores a 2.6 out of 5, with comments such as:
- “It doesn’t work at all. Unable to import enough data, seems can’t even import more than 5. A waste of money.”
- “Randomly misses certain fields for some customers and sometimes doesnt (sic) even import the opportunity no matter what you do.”
- “The integration is extremely poor, it doesn’t work properly. It creates sales drafts for every opportunity that gets edited, even though the settings are configured to only bring in an opportunity once it is closed. It creates drafts for old opportunity records every time you edit an old opportunity, or merge an account with old opportunities.”
- “Terrible documentation, no support (not only that – they purposely obfuscate), a complete mystery to make it work properly. Look elsewhere.”
Those are direct quotes from QuickBooks customers using its connector to Salesforce. Of course, using the QuickBooks built-for-purpose connector from Intuit isn’t the only option as there are dozens of third parties offering much higher-rated connectors to Salesforce. This begs the question: Why doesn’t Intuit offer a solid connector to Salesforce? Why force customers to add yet another solution to their financial tech stack, instead of making it easy?
Part of the problem goes back to the very nature of Salesforce and QuickBooks. One is a true cloud platform, the other is software retrofitted for the cloud. When it was released, QuickBooks wasn’t designed for use with an application programming interface (API), since it was single-instance desktop software.
Speaking of instances, let’s consider that QuickBooks can’t handle multiple entities. Each entity needs its own instance of QuickBooks. As it is, multiple-entity consolidations can take hours to days to complete because the data from each entity must be exported and manually combined in spreadsheets regardless of any automation within a unique instance. Now it gets more problematic when you consider connecting multiple instances of QuickBooks to a single instance of Salesforce. What a mess, and you’re not going to go there.
Connecting QuickBooks to Salesforce – Why?
At this point, you might be thinking “is it even worth connecting QuickBooks to Salesforce?”
Let’s think about the negative consequences lacking an integration, primarily driven by cash constraints and missed revenue opportunities. Without a tight integration between the accounting system and Salesforce, it makes it harder to scale due to inefficiencies. When cash flow is tight, you can’t fund as many growth initiatives as you’d like and grow slows down. As a result, you might end up looking for additional funding to fuel growth. As well, you might find that you’re:
- Not hitting quotas/growth targets
- Experiencing flat or declining sales
- Missing customer commitments
- Unable to grow and react to market changes and opportunities
- Lacking visibility into costs, profit and loss
- Unable to maximize revenue
- Unable to optimize pricing and have ineffective discounting programs
All this creates unpleasant outcomes. Since your CRM isn’t connected to your accounting platform, you could end up losing market share, fail to meet customer needs, weaken your competitive position, miss revenue and growth opportunities, and make less informed decisions, leading to lower margins.
Instead, what if you could accelerate cash flow by 20% or more? How about saving scores of hours each month by not rekeying contracts, orders and projects, as well as eliminating manual billing? Or scaling billing 100% to 400% without increasing headcount?
This requires application integration that gives you and other stakeholders visibility and access to information at the right time. It also requires business-process automation and a modern, scalable integration platform.
With the right integration, you can streamline and automate the entire quote-to-cash process. Salesforce quotes can be turned into orders with a single click. This automatically triggers invoicing, ASC 606 revenue recognition and expense amortization for subscription-based services such as health clubs, internet service, phone contracts and SaaS. An immediate bidirectional synchronization between Salesforce and your financials allows you to maintain billing, revenue recognition and receivables in your financial platform while maintaining orders, contracts, projects, changes, and renewals in Salesforce. Pricing, billing and payments are easily visible to salespeople. Everyone stays up to date—without time-consuming rekeying of information, phone calls or emails, or jumping between systems.
Automating quote-to-cash increases sales and services productivity with:
- Creation and modification or orders, projects and contracts within Salesforce
- One-click conversion
- Email templates and notifications for renewals
- Automatic generation of renewal sales opportunities
- Increased visibility
- Support of reseller workflows
With Salesforce Chatter integration, collaboration should improve. A common view of contacts, accounts, products, prices, orders and contacts will improve efficiency. This will help you meet or exceed business-plan objectives; exceed customer expectations; improve communication, visibility and collaboration; and create a positive company culture.
You can track success with metrics that include:
- Time to market
- Net promoter score and percentage of repeat customers
- Average revenue per account
- Percentage of increased sales per customer
- Days sales outstanding
- Time to cash
- Quarter-over-quarter and year-over-year revenue increases
Of course, you can’t do any of this with a clunky integration between QuickBooks and Salesforce. First, you need to be on a single instance of QuickBooks, then choose the right one of dozens of the connectors out there (since QuickBooks’ own connector doesn’t work), and then more than likely engage with their professional services teams to map everything out so the connector works for your environment.
Fortunately, there’s a better solution than trying to connect QuickBooks to Salesforce. Here at Sage Intacct, we’ve built a hardened integration that allows our cloud-native financial management platform to connect directly into Salesforce. It’s as simple as point-click-connect. Our customers report 30% to 75% shorter order and quote-to-cash cycles, DSO improvement and some report millions of dollars in accelerated cash flow. Our Integration is prebuilt on the Salesforce platform, so there’s no need for expensive third-party integration, IT support, upgrades or custom consulting. It comes with our “Buy with Confidence” guarantee. So, instead of playing go-between with vendors, you can stay focused on your business.
Not sure what to do? Review the advantages of connecting your financial system with Salesforce as I’ve outlined here. Your path will be clear after that.
