Why Use ERP for Services Company? Do you own a marketing agency? Or probably you own a consulting firm? No matter what type of service business you run, you definitely have a certain vision, mission, and strategy which you follow to manage your company effectively. Any type of activity needs intelligent management provided by the right staff selection and using the right tools. In this article, you will learn about ERP for services company.
What Is a Service Industry?
According to Wikipedia, services companies belong to the tertiary industry where no goods are manufactured whereas the primary industry is one which extracts oils and minerals, and the secondary one produces goods and products. A service company is defined as one which provides services to other companies and end users.
Business dictionary defines a service company as an organization that is aimed to earn profit by providing services or producing intangible products. Such companies may serve the following industries: transport, retail, food, distribution, construction, energy, etc.
Simplicable offers 25 examples of the service industry. Among these examples, you can find different industries like insurance, healthcare, sports, marketing and sales, consulting, etc. Almost all spheres of life are closely related to and affected by the service industries.
On our blog, we have already published the articles which cover this topic. Here are some articles which are devoted to the finance and banking industry, transport industry, and construction industry. You may find them useful if you operate in one of these areas.
This article will serve you a guide to check if your services business needs a new system for enterprise resource planning. You will also understand what are the main advantages of using ERP for a services company. And finally, you will get a free ERP selection checklist.
4 Challenges ERP for Service Business Can Address
How to understand if you need ERP? Below are the early indications that your operations are out of kilter.
Challenge 1 - You have a lot of systems to manage different processes.
Just take a few minutes to think about how your co-workers register, process, and monitor information. Do different departments of your company use separate systems to work with information? The use of various software systems that are not connected with each other causes harm to business continuity. For example, the lack of financial data can negatively influence the harmonization of marketing budgets or payrolls.
ERP system includes all these processes in the form of a centralized data space. Being a unified database, ERP helps people take data-driven decisions and allows more time for performing a major job.
Challenge 2 - It’s difficult for you to get timely information about your business.
For companies providing services, it’s important to analyze the key indicators of their business to effectively regulate their activities. Companies having different systems need to perform the analysis manually.
Today’s business environment is dynamic. It requires instant access to data. With a good ERP in place, business owners can get a timely image of their business state whereas executives can get complete information on how to work more effectively.
Challenge 3 - Your IT infrastructure is complicated.
Complex processes within the company are the negative effects of a complicated IT infrastructure. If you have a lot of different software tools, you’ll definitely be tired to update them, integrate them with each other, and maintain those systems properly. Moreover, if you have legacy software, it can cost more to update it than to purchase a new system.
By implementing ERP for services company, you will get a system providing flexibility to adapt to new business processes.
Challenge 4 - The rate of customer satisfaction drops.
When you manage sales and customer relationship separately from each other, your employees won’t be able to give a timely response to customers. If you’ve got your system launched properly, your employees will have instant access to the needed information.
So, if you find your IT infrastructure too complicated, your processes too confusing, or you don’t know what is going on in your company, it’s high time to think of a good ERP system. Before implementing new software, you should find out what kinds of systems there are. Our next section covers the types of applications for the service industries.
Types of Basic ERP Systems for Service Companies
Basically, there are different types of enterprise resource planning systems. Below we will distinguish systems by the scope of business they are intended to serve to and by the type of infrastructure.
By the business scope, there are the following systems:
ERP for small business is now gaining popularity. If you start up a new business or have a small company, you should consider implementing ERP if you plan to scale up your processes in the future. In this case, traditionally, a system will consist of the core modules like accounting, human resources, marketing, sales, and a few more.
ERP for midsize companies are probably the most popular as this sector of business is the largest by its size. Enterprise-grade systems include modules for both internal and external operations. For in-house activities, they offer financial management, HRM, manufacturing, and inventory management (for the industries different from the services industry). For external activities, these applications offer marketing management, CRM, and SCM. Besides, you can use amazing reporting and analyzing tools for providing clear reports and making data-driven decisions.
ERP for large organizations is intended to automate the complicated workflows at large corporations. These systems are usually made of dozens of modules which are customized according to the company’s goals. Owners of such corporations usually prefer to order custom development because their needs are too specific. Custom-built platforms can better match with the industry specifics and comply with the company’s requirements.
By the type of infrastructure, there are the following systems:
Web-based or cloud ERP is a perfect fit for those companies that have no possibility to keep sophisticated systems on their computers. The key advantage of the cloud is that you can access the system from any device connected to the Internet at any time.
Open source ERP is typically a web application that can be downloaded and installed on your computer. Open source infrastructure means that software must comply with the following key conditions:
- Be distributed freely.
- Be readable.
- Work under the same license conditions.
- A license must not restrict other software.
While investing in OS software, companies may reduce risks of developing a system from scratch. By the way, most open source applications can be adapted to your needs.
What Kind of ERP Solution Services Can You Get Today?
Whatever you choose, a custom solution, or an out-of-the-box one, you should be aware of the main services you can get from most software development companies that deal with ERP. Here is a comprehensive list of the services provided by our company:
Dedicated development team / Custom development from scratch
If the industry you operate in is too specific, it’s better to create an individual system. By choosing custom development, you’ll be able to select the right stack or framework with the help of specialists. Systems that are developed from scratch are easily customized in the future as the developers will have access to the source code. These systems are also easily scaled up in case you need to grow your company.
Dedicated team means that you will have a well-selected team of professional developers, project managers, testers, designers who are skilled enough to create the software that will completely comply with your needs. These people work as a part of your company on their site but you can monitor their work at any time. Outsourcing providers offer different programs like time tracking apps or project dashboards where you, as a project owner, can see what’s going on at the moment.
Implementation / Integration
Once your system is ready, you’ll need to implement it and integrate it with the existing software. We help our customers on this stage. The dedicated team is completely responsible for smooth implementation and integration of the systems with the third-party apps.
Learning how to work with new software is always challenging for employees. Our team provides comprehensive documentation and guidelines on how to deal with new systems. Our instructors will help your workers get used to deal with a new ERP. They provide complete training and consulting on different issues and questions employees may have.
Maintenance / 24/7 technical support
If you don’t have a technical staff within your company, it’s not a problem for us to provide you with around-the-clock technical support. Also, we offer maintenance in case you need to develop your systems further.
Reengineering / Modification
Once you understand that you have legacy software, start thinking of reengineering or migration to the cloud. We are able to make any changes to your system or migrate your data to the cloud.
Every software that is designed for reuse and change can also be used as a framework in its intended application area, provided you have the source code or good interface documentation. This makes open source ERP systems interesting from a developer's and customization perspective because you have the opportunity to adopt the framework and easily share improvements or develop add-on modules are developed and integrated.
ERP system audit: How to Make the Right Decision?
A thorough system audit can be undertaken in several steps or include multiple audits related to compliance, processes, risks, security, etc. It can help you detect the general problems not only in the system but also in your business, in particular. By analyzing how everything works, you’ll learn the key issues your firm is facing. Basing on this information, you can make a list of changes you should do to eliminate these issues and improve the internal processes.
How to Select the Right ERP for Services Company?
Below is a free ERP a step-by-step selection process that can come in handy if you have any doubts about your current system or need a new one.
Step 1. Define the requirements for the system by interviewing the company’s personnel. In other words, you must have a deeper understanding of your business
problems in order to be sure you know what to solve through the use of ERP.
Step 2. Build a professional software selection team by choosing a representative from each area of the business.
Step 3. Check the compliance with the business system requirements. Developed from user interviews, requirements are determined along with a request for proposal.
Step 4. Identify multiple system providers based upon software requirements.
Step 5. Get some demos from system providers. Each provider will be requested to demonstrate their product. Each firm should be required to identify the following things:
- personnel to be involved in the support of the new system;
- installation. This would include resumes, number of times they have been involved in the implementation and list of references from customers;
- list of client companies that have fully implemented the business system.
Step 6. Analyze the information and get recommendations. The selection team rates the providers and makes a specific recommendation to management.
In other words, before selecting a business system, you should learn if the vendor of your choosing provides custom solutions that really address the unique needs and objectives of your industry. You must check whether your vendors are versed enough to handle your unique business needs and ERP requirements.
Take these steps to determine if they can be helpful for your organization:
- Make a list of vendors and solution partners who can potentially match your requirements.
- Check each vendor’s experience and competencies against your specific needs.
- Get a demo version for functionality evaluation and testing.
- Involve key personnel in the trial to ensure a complete evaluation.
Once you have selected the solution that matches your requirements, the next step is to find out whether the vendor provides adequate support and training resources. Please note it is a very important aspect that you must consider because most ERP solutions are rather complex and require a lot of time and effort to be introduced into working environments. Your staff needs to be trained in the use of new software.
To engage your employees in ERP training, consider the use of a new system as a changing process that requires continuous audit and control. Make a milestone schedule to track and measure your ERP project on a regular basis. Be sure every user knows how to operate the system (you can check the user’s training status). Hold regular meetings with your staff to explain to them how the system manages the core activities. Focus each user on his/her own contribution to the company’s success.
Hopefully, it has become apparent that achieving ERP is not about implementing a new computer system. What makes companies truly successful is their approach and understanding of training their people, and focusing on company productivity to drive a habit of ongoing improvement in the enterprise.