SME CEOs Guide: Turning a Clunky ERP into a Revenue Boosting Business System

ERP systems have long been the backbone of companies' day-to-day operations, but they're not typically the most modern or intuitive solutions. Too often ERP systems are not serving the needs of customers and employees due to the domination of large software vendors that offer rigid, one-size-fits-all solutions. The disconnect between technology and the people using it leads to bloated and overcomplicated systems that are difficult to use and maintain, resulting in decreased productivity and a negative impact on the bottom line.

The rise of customer and employee experience as key factors for winning big in the global competition means that ERP vendors and customers need to focus on transforming the traditional ERP into a modern-era business system that facilitates silo-free intuitive functionalities for both customers and employees.

Exceptional customer experience requires more than just a technology perspective into business systems, leadership focus is needed to ensure they truly serve both customer as well as employee needs.

Tweaking Customer Experience in a One-Size-Fits-All Economy

According to the 2021 CX Trends & Insights Research Report delivering exceptional customer experience is already the key to remaining competitive in 2021 and beyond. The role of a modern ERP is to support and guide the customer's journey across multiple channels, from online shopping to customer service, contributing to building delightful customer experiences. A monolithic one-size-fits-all technology stack is very rarely synonymous with intuitive usability, support for integrations between systems or modular functionalities that are key elements for agile and responsive customer interactions.

Modern digital business systems can and should go above and beyond when it comes to knowing the customer, leveraging vast amounts of transactional data to provide a more personalized experience. By utilizing all available customer data and integrating it across all business systems, companies can serve their customers better, whether the customer servant is a person or a bot.

All businesses today, both B2C and B2B, are digitally driven and all the data in the world should be available to build a smooth customer experience. Often though, in practice data is lost in silos between systems and poorly implemented integrations. Here’s a checklist for identifying ERP development opportunities on your path towards exceptional customer experience:

1. Are you utilizing your customer data and integrating necessary information across all your business systems?
2. Does your ERP cater for the needs of your customer service?
3. Is your ERP communicating actively/automatically with your e-commerce platform or other systems as well as their human counterparts?
4. Is your customer-servant seeing all relevant customer information from purchase history to active communications or possibly even complaints the customer has made?
5. Are all the people/departments in your organization happy with how your ERP accommodates for customer experience?

If the answer to any of these is no, you may have good room to improve competitiveness through focusing on customer experience.

The Disconnect Between Technology and People Using It

But it's not just about customer experience. An integral part of the workday experience is the set of digital tools employees have at their disposal, and how these contribute to their ability to work effectively. By providing modern digital tools that cater to the needs of remote and hybrid work, businesses can attract and retain the best talent, ultimately improving the customer experience as well.

According to McKinsey State of Customer Care Survey 2022, customer care leaders say they are looking to build better organizational cultures to attract and retain employees. An integral part of the workday experience is the set of digital tools we have, how we are using them and how this combination contributes to our ability to work effectively.

Developing operational procedures and introducing modern digital tools can be an effective way for companies to modernize. It can improve both the customer experience and productivity of employees for example by streamlining order processing and reducing the need for manual data entry. This streamlined process can also provide employees with more time to focus on other essential tasks, ultimately improving the overall efficiency of the business. If your ERP limits the possibilities for procedural improvements, there’s a fair chance you’ve fallen into the clunky ERP trap.

Products vs. Custom Solutions

Custom software development is expensive, so as a rule of thumb if there’s a ready product that does exactly what you’re looking for, always use that instead. ERPs offer vast functionalities but not all organizations need an ERP (at least not in the original meaning of the acronym), so focus on the functionalities not the acronym. Sometimes your business landscape is truly unique, and there’s a real business case for investing in tailored software.

Custom software created from scratch allows businesses to tailor software to meet their unique needs, rather than being constrained by pre-built, rigid solutions. It’s still a good idea to put extra focus into selecting the appropriate platform to build on. Open-source ERP systems are typically more cost-effective and provide better ongoing support and customization options. Additionally, they offer greater transparency and security through source code access. Unless you are bound to a proprietary technology stack for a specific reason, it’s recommended to evaluate open source as an alternative.

Whether it’s custom or a product, make sure the development partner you choose is a fit for your organization. Make sure you get a simple understandable answer for how they are planning to support your business also in the long run. Favor vendors providing exceptional customer service - this means providing ongoing support, training, and guidance throughout the entire lifecycle of the product. It also means actively listening to customer feedback and using that feedback to continually improve the product and service offerings.

Building Digital Systems for Innovation and Change

Every company is a software company today, and thus the true risk in digitalization is if we ignore it. Therefore, we must perceive the digital storm as a great opportunity to grow our business and choose to grab a surfboard to ride the waves.

To enable innovation and change, companies should allow experimentation and smart risk-taking. At the very heart of digital transformation is the need for business systems that can integrate information between all operations, from customer service and sales functions to warehouse and finance. But at the same time a critical requirement for modern business systems is their ability to support innovation and change. Modular business systems enable companies to keep pace with the ever-changing technology landscape – while running business today also accommodating experiments with future ways of working by adding and changing functionalities.

Is Your Business Ready to Make the Leap into the Future?

In summary, modernizing ERP systems is essential for businesses that want to remain competitive in today's global market. By transforming these systems into modern, modular, silo-free business systems that provide exceptional customer and employee experience, businesses can attract and retain the best talent, reduce costs, and ultimately, increase their bottom line.

So, ask yourself: is your business ready to make the leap into the future of ERP systems?

Pekka is the CEO of Avoin.Systems, a company committed to serving all customer business operations within one system.