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SMEs often mistakenly think ERP systems are nothing but fancier, high-end accounting software.
In fact, we frequently get calls from customers in Singapore asking for ‘SAP accounting software’ or ‘Microsoft accounting system’. Once the caller learns it’ll cost more than their off-the-shelf accounting software, you can almost feel their stunned silence on the phone.
So,what's the difference?
A typical accounting software revolves around facilitating accounting transactions. Common modules include general ledger, purchase order, billing, accounts receivables, payroll etc.
On the other hand, ERP software goes far beyond what accounting software offers.
A true ERP system covers a wide range of functionalities, including non-accounting ones. Some examples are Procurement, Inventory Management, Sales & Distribution, Warehouse Management, Manufacturing, Service Management, Cost Accounting, Human Resource Management (HRM), and Customer Relationship Management (CRM).
As such, ERP systems are not fancier, scaled-up versions of accounting systems. Instead, think of accounting software and its functionalities as a subset of what true ERP software can provide.
Less commonly, ERP systems are sometimes confused with Material Resource Planning (MRP) and Manufacturing Resource Planning (MRPII) systems.
This is due to their long-shared history in the manufacturing sector.
MRP systems go way back to the 1960s and 70s. Back then, manufacturers used MRP systems to calculate their required materials in the optimum time frame and quantities.
Ideally, a good MRP system helps them reduce inventory levels, associated costs, and shortages and better plan delivery and purchasing schedules. But as manufacturing businesses grew and their requirements became more complex, manufacturers demanded a better software solution.
MRPII was MRP's next evolution. An MRPII system had MRP functionalities plus capabilities like in-depth capacity planning, general accounting, quality assurance and so on.
This worked until 1990, when a new breed of solutions hit the market.
These systems not only had processes found in MRPII systems but also integrated company-wide operations applications — financial management, supply chain management, procurement management etc.
Gartner termed these new solutions ‘enterprise resource planning’, or ERP systems.
In other words, ERP systems evolved from MRP systems — and are still evolving today in the Singapore market and countries abroad.
Picture all the processes that take place within a business.
There’s accounting to be done, sales orders and/or inventory to manage, procurement and payroll to handle and so on.
An ERP system essentially ties all these processes into one integrated system.
By utilising a shared database, everyone’s assured they’re relying on the same information, regardless of which department or function they’re in.
Full-fledged ERP software also provides real-time reporting and automation. This lets employees directly pull information from one system instead of maintaining separate spreadsheets or software, thus minimising data loss and inconsistencies.
For SMEs in Singapore struggling with manpower issues, this integration and real-time automation can really transform efficiency levels and service quality in the workplace.
Now you may be thinking:
But we have different systems/methods to divide our workload, and each solution is specialised for its purposes. So, all we need is for our teams to ‘get their act together’ and work more effectively.
Purchasing and gathering various point solutions are indeed useful – functionally. But these will not give you the same benefits as a fully integrated system, where every part works in unison.
Let’s use a typical sales order of what goes on in an SME in Singapore with disjointed processes as an example:
Now imagine the alternative:
And that is just one difference made to your Sales processes alone.
In a nutshell, the ERP concept is more than a sum of its parts. To quote a CIO article:
Enterprise resource planning (ERP) software doesn’t live up to its acronym. Forget about planning — it doesn’t do much of that — and forget about resources, a throwaway term. But remember the enterprise part. This is ERP’s true ambition. It attempts to integrate all departments and functions across a company into a single system that can serve all those different departments’ particular needs.
Like its MRP predecessors, ERP systems continue to evolve to reflect the changing business environment. Today, modern ERP systems boast functionalities such as business intelligence (BI), predictive analytics, warehouse automation (barcode scanners etc.), e-commerce and so forth.
With such advancements, it’s unsurprising that more SMEs across various industries in Singapore are investing in ERP. One ERP report even showed nearly half (47%) of the organisations surveyed are in the process or have completed implementing ERP software, while 22% indicated they’re in the software selection process.
There are three common ways to categorise ERP systems:
ERP systems have traditionally been associated with big MNCs. These enterprise ERPs are large, behemoth systems that take years to set up and involve thousands of employees worldwide.
These are the ERP systems you’d come across in articles on how complicated and costly it can be to implement an ERP system in Singapore.
Just take the various components in SAP ERP – an enterprise-level system, as an example:
This is excessive for most SMEs (and not just for their budgets). What they simply need is a usable, affordable system that could integrate and speed up their functions.
In the past, this would've been limited mostly to the big 'fishes' in business. But over the last two decades, more developers have turned their focus to building ERP systems for the SME market.
There are many factors — near saturation of ERP adoption among large enterprises, growing pressures among SMEs to stay competitive in a global market, businesses getting smaller, etc.
The biggest reason, however, is the SME market's attractiveness. One IDC study estimates SMEs are growing up to four times (4x) faster than large enterprises, making them attractive to software developers.
Even companies in Singapore traditionally involved in enterprise-level software have entered the SME ERP market. For example, SAP introduced SAP Business One – its flagship product for the SME market – in 2002.
So today, apart from enterprise ERP, you'll find a whopping number of ERP systems designed especially to help SMEs with resource planning. These tend to be more standardised, easier to use and boast functionalities that are ‘just nice’ for the average SME.
Does your company have a substantial need for internal IT control, have complex requirements, or have already invested heavily in IT infrastructure? If so, on-premise ERP software may be better for your business.
Should You Host Your ERP Software On-premise Or On The Cloud? Here's A Breakdown Of The Two Choices.
These ERP systems are designed to sit in your office’s internal servers, giving you the freedom to manage when and what to upgrade for your ERP software. You also enjoy greater control over your system's customisation options.
On the flip side, on-premise ERP systems need higher up-front costs of ownership. The returns on investment could also take up to several years.
The same applies vice-versa. If you favour lower initial set-up costs, minimal IT maintenance, and convenient upgrades at the expense of less customisation, a cloud ERP system may be more suitable for you.
Cloud ERP systems stand outside your office premises in Singapore and are managed by your cloud ERP vendor. You can run your ERP software and operations over the Internet with just your browser and an Internet connection for a subscription fee.
One good example is Microsoft Dynamics 365 Business Central. A true cloud ERP system with all the above advantages, Business Central even promises 99.9% up-time with a money-back guarantee.
No more buying or installing or managing your own infrastructure. No more fuss.
ERP systems can also be categorised according to whether they’re designed for most industries (generalists) or a specific industry’s requirements.
Most ERP software for SMEs falls under the generalist ERP systems category.
Generalist ERP systems are highly flexible and scalable and are easily integrated with other software (e.g., point-of-sales etc.).
They're also extremely efficient and suited for integrating business processes in any industry.
In addition, most generalist ERP software tends to be backed by large, globally recognised companies.
For SMEs, this is a big plus point. They know their hard-earned investment is not going to just go ‘poof’ someday. They also know these companies have the R&D clout to enhance their products, assuring long-term viability in the years to come.
Microsoft Dynamics 365 Business Central (formerly Microsoft Dynamics NAV) and SAP Business One are good examples of generalist ERP software designed and backed by well-known brands in the technology world.
On the other hand, Industry-specific ERPs focus on targeted niche industries, like logistics or construction.
As its name suggests, these are designed for specific requirements and users, so they have certain performance features not found in generalist ERP software.
For specialised businesses, this means less customisation, faster implementation, and more affordable maintenance.
You may ask, “Well, isn’t it better to get an industry-specific ERP software then? I can get software that’s tailored for my business.”
The answer is yes...
and no.
It really depends on how specialised your business requirements are.
A good rule of thumb to guide your decision is determining which functionalities are must-haves for your company and which are nice-to-haves.
If your business doesn't require specialised features, it may be better to give industry-specific ERP systems a miss. There’s a high chance your end-users will under-utilise these specific features or find them confusing, which can hamper their work and be counterproductive.
For example, if your company is involved in discrete or light manufacturing, generalist ERP software like Microsoft Dynamics 365 Business Central will suffice with some light configurations.
Previously known as Microsoft Dynamics NAV, Business Central lets you:
For most Singapore SMEs in the manufacturing sector, these functionalities suffice with a few minor customisations.
But if your company has complex manufacturing requirements and/or is heavily invested in process manufacturing, then it's better to buy manufacturing-specific ERP software.
The time and costs of customising a generalist ERP system to fit complex requirements may far outweigh one already designed for your business model.
There is a wide variety of ERP systems in the Singapore market, each with its own unique differences. However, they all share several common and basic modules at their core.
A typical ERP system for an SME in Singapore will have the following:
In the section below, we’ll briefly take you through what each ERP system module does and how it can benefit your enterprise.
The core of any ERP software. This module(s) manages your company’s cash inflow and outflow by keeping track of all financial-related transactions. Some examples of its functionalities include the general ledger, account ledgers, budgeting, banking and reconciliation, tax management, financial reporting and analysis, multi-currency, and more.
Because this is already integrated with modules like Sales and Purchasing, you avoid costly data errors, manual reconciliation, double entries, and other unnecessary redundancies. By giving companies an accurate picture of their financial performance, an ERP System’s financial modules support firms in polishing their business strategy and increasing revenue.
The Sales module of ERP software covers the entire sales process. What this means is that it facilitates workflows like sales queries and handling, quotation creation, document drafting and printing, sales order management (with the correct taxation), and tracking of pending sales orders.
With this, you can easily perform key sales analysis through interactive dashboards and calculate gross profit for created quotations.
This enables you to manage most (if not all) processes involved in procurement. The Purchasing module of an ERP software comprises functionalities ranging from purchase order to supplier invoice payment. Think supplier/vendor listing and item linking, preparation and tracking of purchase orders preparation, inventory updating and other real-time reporting.
In short, this ERP module enables you to maintain all your supplier and item master data in a centralised area, so you get full visibility of your entire purchasing process.
A must-have in any ERP software. The Service Management module enables you to run service, sales, and contract management efficiently and effectively.
Think of functionalities like service reports, post-service analyses, or even cost management – situations where your sales and operations can take real-time information and use them to delight your customers.
In turn, this module in the ERP software helps you improve your sales and operations overall productivity.
As its name suggests, this module of the ERP system lets you quickly create estimates, track projects, and manage capacity.
For example, this module allows you to keep track of basic resources and prices, individually or in a group, and plan your capacity and profitability down to the required detail level in the needed time frame.
You can also easily keep track of multiple jobs (set up time sheets etc.), so you get better visibility into your jobs’ billings and costs.
This ERP software module enables you to define a planning scenario and predict demand in advance easily. That way, you can adjust your material planning accordingly and reduce errors and costs from stock excess and manual procurement.
Typically, it should also come with predefined report templates, making it simpler and faster to create detailed reports to guide business decisions better.
This module enables you to easily track your stock to the zone and bins. Coupled with mobile devices like barcode/QR code scanners, the warehouse management ERP software module suggests the best put-away bin location and recommends a stock item’s pick location.
It also improves stock control by suggesting when to purchase and replenish according to what your MOQ parameters are. This, in turn, boosts warehouse distribution efficiency and stock management accuracy.
Perhaps you might be wondering whether you need all these modules. Maybe you're in the service industry, and your company doesn’t need modules relating to inventory.
Or perhaps you’re in an industry that requires all these modules and more.
The good news is that some ERP systems are designed to be distributed on a modular basis. You simply pick the modules you need for your business and run with them. From there, you can purchase and implement additional modules when deemed necessary.
Sage 300 ERP and NetSuite are examples of modular ERP setups. With Sage 300 and NetSuite, you can choose and purchase only the modules necessary for your business requirements, e.g., core financial modules.
If you need additional modules later (such as Project Job Costing), you can always top up your purchases by implementing those modules separately, helping SMEs maximise their gains with minimal costs and scale their solutions quickly.
Other ERP systems are developed with an all-in-one approach, where you get most or all the modules in your list for a fixed price. SAP Business One and Microsoft Dynamics 365 Business Central are good examples of this approach.
Here Are The Top Five Trends That Define ERP Software Today.
To help you get a better idea of the pros and cons of each type of ERP system in Singapore, check out the simple guide we’ve put together in the link below.
Having said that, not every SME needs an ERP system to run their businesses.
A start-up, for example, will do quite well with Excel spreadsheets.
Or a Singapore SME with relatively low volume transactions may find accounting software sufficient to automate their financial management alongside Excel spreadsheets to manage areas such as sales or inventory.
The turning point happens when the company hits a specific growth wall.
This wall varies from business to business, but some common signs they're approaching this point are:
Here Are 10 Tips That Will Make Your ERP Software Implementation Much Smoother.
Let’s look at two indicators.
Increased transactions are great. But ensuring these transactions are accurately and quickly captured in the system is another thing altogether.
If your finance team lacks visibility over all incomings and outgoings and needs to rely on other departments for information, you’ll see this manifest as data inconsistencies and inaccuracies across the organisation.
This problem is compounded by another issue unique to SMEs – un-scalable legacy processes. Often, these systems were put in place by their founders, who, in most cases, are still leading the company.
When they started, the founders did what they thought best for the company’s survival and growth using processes that worked in a low-manpower, low-transaction volume situation.
But once their SME grew, more processes and ad-hoc systems were added as a quick fix to address challenges as they happened.
Along with the mindset, 'this has always worked for us', the SME ends up with new workflows built on top of an old foundation of doing things – a foundation now unsuitable for their growth stage.
Unless proper, integrated internal processes and tools like an ERP system are in place to manage transactions and improve information flow, inefficiencies will continue to grow.
This results in longer working hours, repeated tedium from manual reconciliation and entry, not to mention unhappy employees – especially during busy closing periods.
Imagine a combination of Excel spreadsheets, an off-the-shelf accounting software here, and a customised inventory system there – none of them ‘talk’ to each other as effectively as an ERP system.
Every time you request reports, your team needs several days to pull the data together to generate what you need instead of being able to do so in hours or even minutes.
And there are other issues:
When data is located across different sources and systems retrieved by different department staff, it makes it nearly impossible to gather up-to-date data quickly.
Or, to put it bluntly, if your business is running multiple systems that don’t ‘talk’ to each other, how will you quickly gather information for decision-making?
And if you can’t be certain your company’s data is reliable and up to date, how will you know whether the decisions will achieve your company’s goals?
When you can’t confidently assess and make decisions quickly, it is a sign your SME is due for a much-needed systemic overhaul.
Knowing what ERP systems can do is one thing; understanding how they benefit your company is something else altogether.
Some ERP users complain about how their ERP software doesn’t give them the expected benefits. They feel let down by promises made by Singapore vendors, more so because they’re from SMEs where every dollar invested matters.
Is It Practical For SMEs To invest In ERP Software? Yes. Here's Why.
When you trace their dissatisfaction's root cause, it usually points to one or more of the following:
So, it is not the ERP system itself that was the problem. The miscommunication between the ERP software partner, customer and internal stakeholders led to problems.
But let’s say the ERP software is just right. And there’s a good expectation and capabilities fit between the Singapore ERP vendor and the customer.
As an SME ERP user, you can expect several benefits:
The biggest benefits of an ERP system for any busy, growing Singapore SME. Those problems associated with complex data compartmentalised and silo-ed across multiple databases? Gone.
By centralising all information in a single system, users will find their productivity increased as they collaborate effectively across departments with real-time information. As a result, data re-entry and errors are reduced, so enterprise data remains consistently accurate.
A good ERP system also automates cross-department operations, thus streamlining daily processes like production, resource planning, order completion, and delivery for greater efficiencies.
Data security is a huge issue for SMEs working with multiple spreadsheets and disparate software across departments. With a proper ERP system, what many SMEs find is increased data security, thanks to firewalls, built-in resources, and advanced user-related settings.
A simple example: managers can restrict user access to sensitive data or ensure certain transactions aren’t processed without the proper checks.
Robust data security and accuracy of an ERP system also support regulatory compliance – a key factor, alongside the system’s ability to improve product traceability.
For Singapore SMEs in certain industries (such as food & beverage) where maintaining compliance is an ongoing challenge, these benefits are essential for success.
Many SMEs compete in a tough business landscape. Those that succeed are the ones that manage to adapt and stay ahead of their competition.
Reputable ERP systems are flexible and configurable enough to meet an SME’s changing requirements over time. They can also scale alongside growth, allowing companies to easily add new users and supporting functions when needed.
In the long-term, this helps to reduce the total costs of ownership – a key factor for consideration for budget-conscious Singapore SMEs.
Managers and decision-makers love this benefit. Good ERP software lets end-users quickly generate and customise reports using centralised, real-time, and accurate data.
Not only does this system save manpower time and reduce reliance on IT personnel, it also improves top management’s responsiveness and decisions towards complex issues.
What’s more, the user-friendly dashboards and forecasting tools also make it convenient for managers and decision-makers to create realistic, accurate estimates and plans for the business.
Every SME wants to deliver quality customer service. A good ERP system enables Singapore SMEs to do just that through improved mobility and customer service.
With centralised accurate data, sales and customer support staff interact with customers quickly without going through the finance or production departments for information on the customers’ history.
Also, most ERP software comes with iOS, Android, and Windows devices mobile applications. This on-the-go mobility further enhances staff productivity.
For example, a salesperson at a customer’s place could find out whether there are any outstanding transactions or observe buying patterns through his mobile app without going through the finance department. He could then try to up-sell another product relevant to a customer’s preferences or remind a customer of an outstanding payment.
Similarly, a managing director could check her dashboards in her mobile app for real-time updates on critical business KPIs, enabling her to make faster, accurate decisions anytime, anywhere.
People new to ERP software tend to make one oversight when setting aside a budget, which is assuming their next investment comprises mostly software fees.
From there, they set a budget – and then get shocked when they discover more cost components than just software fees.
How Do You Implement An ERP Software On A Limited Budget? Here Are 5 Best Practices For Doing So.
To properly estimate the total cost of a new ERP system requires a wide range of factors.
Examples of these include (and aren’t limited to) your business size, your industry’s unique requirements, the scope of usage, etc.
As you can imagine, this varies significantly from one organisation to another. What your friend at ABC company paid for a new ERP system will differ from what you’ll be getting for your business.
However, that doesn’t mean you go ‘blindly’ into a discussion with an ERP vendor without any budgetary gauge.
In the section below, we'll show you several factors you can budget for before you get an ERP system:
ERP systems are typically purchased based on a per-user licence basis. ERP software developers usually sell their software using one of the following approaches:
Sometimes referred to as ‘floating’ licences, concurrent user licences for an ERP system can be shared among an unlimited number of users in your company.
However, the number of users who can log in simultaneously is limited by the number of licences purchased.
E.g. There are four user licences but five registered users. If users A, B, C, and D log in at the same time, the fifth user E will get an error message and will not be able to log in to the ERP system.
Only when one of the users A, B, C, or D logs out will E be able to log in to the system.
Depending on how your business is run in Singapore and how many employees you require to use the ERP system at any given time, you could potentially save some money with concurrent user licences.
Examples of ERP systems that use concurrent user licences are Sage 300 ERP and Microsoft Dynamics 365 Business Central.
With a named user licence, you can only create users based on the number of licences you purchased for the ERP system. Unlike concurrent user licences, the sessions are independent.
E.g., There are four user licences. Only four users, A, B, C, and D, can be created. You cannot add a fifth user E to the ERP system.
However, the time and duration of A logging into the ERP software do not affect other users B, C, and D.
Do note you’ll also need to factor in ERP software maintenance fees — an annual fee paid to the software provider (e.g., SAP or Microsoft) to ensure the vendor provides you with upgrades.
This is typically charged as a percentage of the licence fees you paid for. The ERP vendor then invests these proceeds into areas like research & development, so you can be assured your ERP software will have periodic updates (fixes), new features, and functionality upgrades in the future.
For true cloud ERP systems, these software maintenance fees are often included within the annual licence subscription fees.
From the SMEs’ view, implementation is simply installing the ERP software, ensuring the data and reports are correctly set up and getting their users trained.
But from your ERP vendor’s perspective, there are many other factors to consider. Examples of these include:
As a rough guide, you can expect the software-to-services ratio to be at least 1:1.5 onwards, depending on complexity and customisation levels.
An exception may be said for true cloud ERP systems. True cloud ERP deployments follow more standardised processes, with less flexibility for functionality customisations. This makes it possible for the cost ratio to be lower.
To ensure your operations continue to run smoothly after ERP system implementation, you’ll need to invest in post-implementation support services.
These include:
Your employees will, from time to time, encounter issues using the ERP software. Investing in a decent post-implementation helpdesk support service is what will help your employees focus on doing more at their work – and less on technological issues.
If you’re investing in an on-premise ERP system, you’ll need to factor in regular infrastructure and hardware maintenance services. This ensures your applications continue to run smoothly and securely.
Regular data backups and proper security setups will also safeguard your critical data.
On the other hand, if you’re investing in a true cloud ERP system in Singapore, there’s minimal to zero hardware and infrastructure maintenance needed.
Periodically, your ERP software vendor (e.g., SAP or Microsoft) will provide new upgrades for your ERP system.
If you intend to upgrade your on-premise ERP system, you’ll need to set aside funds for your ERP implementation partner’s services. Your ERP partner will help get your ERP system and users up to speed with the latest upgrades.
For true cloud ERP systems, however, these upgrades are usually done automatically and overnight.
On a side note: there is a common misconception that ERP systems are too expensive for SMEs.
While they do cost more than your average accounting system, ERP software like SAP Business One, Sage 300 (formerly Accpac), and Microsoft Dynamics 365 Business Central (previously Microsoft Dynamics NAV) fall within the budget range of most SMEs.
To top it off, there is government financial help for Singapore SMEs seeking to up their productivity and innovation through technology. Find out what you may be eligible for in our Budget 2019 post.
The question, ‘who’s the best ERP software vendor in the market’ does get tossed around a lot in the search process.
Want to know what our answer is?
There isn’t one because there isn’t a magical one-ERP-solution-for-all out there.
And because there isn’t a magical one-ERP-solution-for-all out there, you won’t be able to find a single top vendor behind it.
Having said that, there are ways to identify the more reputable ERP software vendors in the market. One way is to review reports from independent, credible research firms.
Powered by Gartner methodology, the FrontRunners report evaluates over 350 ERP products. Of these, only the top-performing ERP software brands are added to the FrontRunners Quadrant below.
You can head here for more information on how this ranking was done, but there are a few things to pay attention to.
First, no one quadrant is better than the other. To quote the FrontRunners Quadrant creators:
Every product in this quadrant offers a balance of capability (how much the products can do) and value (whether they’re worth their price/cost) that makes them stand out in the race for small business software success.
In other words, depending on your SME’s requirements, any of these options could be a good fit for your business.
But in the interest of space, we'll cover just three ERP software in the FrontRunners Quadrant:
Mention ERP, and most people will think of SAP.
SAP has long established its reputation as the world’s leader in enterprise application software. The company has over 365,000 customers worldwide across 25 industries and six industry sectors – discrete, process, service, consumer, public, and financial services.
SAP provides software and software-related services in both the on-premise and cloud market space.
These include asset management, corporate strategy and sustainability, finance, human resources, information technology, manufacturing, marketing, procurement, research and development, engineering, sales, service, and supply chain management.
With 87% of Forbes Global 2000 companies being SAP customers, it is not surprising many SMEs believe SAP systems are far beyond their reach.
But SAP has clearly shown its interest in growing its SME customer base. The organisation owns a large product portfolio designed specifically to address what SMEs need.
These range from ERP systems like SAP Business One and Big Data options like SAP Cloud Platform Big Data Services to front-office solutions like SAP Anywhere.
In addition, SMEs make up a surprisingly large proportion of SAP customers. For example, in 2015, SMEs comprised 88% of SAP’s net new on-premise customers – or four new SMEs every hour.
The ERP software giant also has a clear direction and road map for its products.
In keeping with industry trends, SAP’s mid-term goal is to continue building on its successes – rapid growth in the Cloud, strong software momentum and operating profit expansion, with the expectation that predictable revenue (i.e., a total of cloud subscriptions & support revenue and software support revenue) will reach 75% by 2020.
This is good news for any SME considering the viability of a possible SAP investment.
Microsoft covers everything from business software to consumer electronics, computers, and services. It’s also considered the world's largest software maker by revenue (as of 2016) and one of the most valuable organisations worldwide.
While Microsoft is well-known for its Windows and Office products, the US-based technology giant also offers business solutions through its Microsoft Dynamics product line. These range from ERP and CRM to supply chain management and financial management.
It’s this sheer array of solutions that sets Microsoft Dynamics apart from other brands. If an SME wants to extend their Microsoft Dynamics ERP system’s functionalities, there’s (nearly) always a Microsoft solution or hardware to complement them.
For example, if your company needs:
Microsoft has also shown a clear commitment to building the company around the Cloud and artificial intelligence (AI) instead of relying on its Windows legacy.
Satya Nadella, Microsoft’s CEO, re-structured the organisation in early 2018 to focus on a ‘Cloud-first’ approach. This included shifting resources and leadership away from the Windows and Devices group and re-directing them to the Cloud and AI Platform group.
In short, SMEs seeking a well-established, future-centric organisation with the resources to back their business solutions will find Microsoft an excellent option for consideration.
The Sage Group is best known as a software vendor of financial and accounting solutions for the SME market space. They also serve large enterprises, but their main product focus remains on SMEs.
Unlike SAP (a Tier I ERP vendor*), Sage is considered a Tier II* ERP vendor. What this means is that they offer mid-range solutions that are robust and agile enough to meet the requirements of most organisations.
Sage is a UK-listed organisation and boasts a wide presence across Europe, Asia, North America, Australia, and Brazil. Though their origins lie in accounting and payroll software, the company has diversified into business solutions like ERP (for example, Sage 300), CRM, and human capital management across multiple industries – construction, chemicals, wholesale distribution, food and beverage, and non-profit.
SMEs looking for ERP software with strong accounting origins may find Sage solutions attractive and relevant to their requirements. But those keen on Cloud-based ERP systems may find Sage Cloud offerings slightly underwhelming. This is not unexpected; the majority of Sage customers use on-premise systems, which also happens to be what Sage is traditionally good at.
*According to Panorama Consulting
At this point, you might wonder: how do you decide on the best path for your business with so many ERP vendors in the market?
Furthermore, investing in a new ERP system is a transformative business decision. Done correctly, it can reap huge competitive advantages for your SME.
Conversely, a bad decision can result in months or even years of costly, ineffective corrections.
To help you narrow your ERP software options, here are three tips for consideration:
All ERP software share similar core features. Thus, core features aside, consider the ERP software’s technology capabilities.
Ask yourself questions like:
Let’s take SAP Business One as an example. SAP Business One can run on a Microsoft SQL server (common with many ERP software) or upgrade to HANA – an in-memory, column-oriented database.
Sage 300 ERP, on the other hand, is designed to run only on Microsoft SQL.
So why does that matter?
Having HANA is like replacing a standard Mazda engine with a Maserati engine. You get more power and speed, plus lightning-fast analytics and other best-in-class functionalities you can’t get on a Standard Edition of Microsoft SQL server.
Of course, SAP Business One doesn't trump Sage 300 just because of HANA. Not everyone needs a powerful engine, and there are other factors to consider, such as costs and hardware specifications. But knowing the technological differences beneath the software will help you make a more balanced and fair evaluation.
Sometimes SMEs invest in ERP software for short-term purposes. They need an ERP system to tide them over for a while before switching over to an enterprise-level system from their parent companies.
But that’s not the norm.
More commonly, SMEs invest in an ERP system for the long haul. They expect their ERP software to grow alongside them and be flexible enough to accommodate future business changes.
Which brings us back to the brands behind the ERP software. Features aside, it’s essential to consider the vendor’s background when assessing an ERP software’s mid to long-term viability.
Here's What You Need To Know Before You Start Working With An ERP Software Vendor.
Try asking the following questions:
By paying attention to the ERP vendor’s current and future direction, you can get a better sense of whether your potential ERP software will continue to support your requirements in the years ahead.
No one likes being surprised by unexpected costs. As such, you should also ask questions like:
Some ERP partners keep their implementation costs low and their project descriptions vague, only to charge you hefty fees for every request you make later.
A clear, well-defined project with a reputable partner shouldn’t lead to sneakily hidden costs. Avoid such situations by starting your ERP software and vendor search on the right note.
So you’ve decided on your ERP software. You’ve shortlisted your list of ERP partners to the best possible few.
From there, it sounds easy enough – choose the right ERP partner, define your project, set up your new ERP system, run some testing, get your staff trained and voila! Everything’s running smoothly.
Or is it?
Many Singapore SMEs underestimate what goes into their ERP system project. They fail to set aside enough time and resources for the ERP implementation and then wonder why the software and their ERP partner are performing below expectations.
Worse, this is sometimes exacerbated by enthusiastic ERP sellers who claim their systems can be ‘up and running’ in just three weeks.
Yes, there are exceptions, but most ERP projects require more time before everything runs smoothly.
ERP systems involve most, if not all of your business operations, making it more complex to implement than accounting software; a hastily done or poor project will result in many painful months (if not years) ahead for all involved.
It’s always better to overestimate and 'over-prepare' for an ERP project. We're going to share a few tips to get you there.
To boost your ERP project's success rates, you should broadly prepare for two key aspects:
A new ERP system means change for almost everyone. Some will welcome it, while others will find it difficult to keep up with the new implications.
You can pre-empt troublesome HR issues with proper preparations in two areas:
Start by building a go-to team. Decide on the individuals in charge of the implementation and significant changes.
These employees should be answerable for any questions or issues that may pop up during the ERP software implementation.
Here are some questions to help you get started:
i) Who are going to be the primary users?iii) Who needs to have an overview of the entire operations and/or better understand the core business processes?
Next, set time aside to prepare them for what'll happen during the upcoming implementation. This is more than just a quick briefing; you should make every effort at this stage to win buy-in from your newly assembled team.
After all, a convinced team is a committed team, and commitment is essential to drive your ERP software implementation project forward.
Be practical when costing for training. Some SMEs try to save costs in this area, hoping their staff will get by with online videos and instructional manuals.
Others take advantage of their ERP partner’s call-in help desk support as a substitute for training.
There’s one big problem with these approaches.
Self-learning just doesn’t work for some individuals. Sometimes it may even increase their resistance to change.
Employees like these tend to require more handholding and guidance, especially if they’re less tech-savvy than their peers.
Also, your ERP software partner's Support Helpdesk is not a good substitute for properly structured training.
While it may seem like you’re saving costs by reducing training services, what really happens is your staff end up spending more time getting help for minor tasks instead of focusing on what you’ve hired them to do.
And without the right training, your employees will take longer to learn how to use the system effectively.
Just think of all the hours wasted on making and rectifying mistakes, or searching for answers just to perform the most basic tasks.
So rather than being ‘penny-wise, pound-foolish’ with your hard-earned capital, set aside some funds for sufficient employee training, so your business can experience a smooth transition into the new ERP system.
If you’ve any concerns about staff capabilities, discuss them with your ERP partner and seek their training recommendations.
A good ERP partner should have many years of experience dealing with companies from various industries, and will be able to advise you on the best training approach for your employees.
People aside, SMEs need to evaluate their existing business processes before starting an ERP project.
SMEs that rush into implementations run the risk of:
Michael Hammer, a business process reengineering expert, once described this tendency to revert to old ways as ‘paving the cowpaths’ – a reference to building on existing processes without considering whether these processes are effective or efficient in the first place.
His advice, published in the Harvard Business Review in the 90s, still holds much relevance for businesses today:
Instead of embedding outdated processes in silicon and software, we should obliterate them and start over. We should “reengineer” our businesses: use the power of modern information technology to radically redesign our business processes in order to achieve dramatic improvements in their performance.
No ERP system, no matter how modern or powerful, can transform a business if the underlying corporate mindset remains the same.
Here’s a real-life example. Some time ago, we had an SME who invested in one of our ERP systems.
The condensed conversation with the General Manager basically went like this:
GM: This ERP system is good. But we need you to customise this bit for us to match our internal processes.
AFON: Your teams currently need 14 steps to get this (desired outcome) done. If you follow the best practices in this ERP system, you can achieve the same in just 8 steps. You'll save more time in the long run.
GM: But our staff are familiar with this process. We should customise the system to match what we're doing.
Eventually, the General Manager recognised they had to change their internal processes to get the most returns from their ERP investment.
Once they did so, they started seeing improved efficiency and time savings across their Singapore and overseas offices.
So how can you take the first steps to evaluate your SME’s processes?
Key to your project’s success is your CEOs, CIOs/IT Managers, and project managers. If they’re genuinely keen on business transformation, they’ll set aside the appropriate effort, focus, and resources to enforce process changes.
Otherwise, your company will return to treading familiar, comfortable cowpaths no matter how good your software functionality or ERP system implementer is.
Most SMEs begin ERP projects intending to standardise their business processes. The extent of standardisation will differ from company to company and depends very much on your company’s priorities (hence there’s rarely a one-size-fits-all approach to ERP).
It’s important to decide whether standardisation will occur during your ERP project’s early phases because of the ramifications further down the project.
For example, if substantial standardisation is going to happen, you should set aside time and costs for the business process analysis phase with your ERP software implementer.
On the other hand, if your company prefers less standardisation and more customisation, you should prepare to spend more time and money on the latter part of the ERP project – designing, testing, and training to ensure your customisations work.
In summary, before embarking on a new ERP system, take time to address the human aspects and business processes within your business.
At AFON, we’ve helped many Singapore SMEs successfully get their new ERP system up and running, so you could say we know a thing or two about what to consider for implementation.
If you need advice, click here to get a free consultation today.
Let’s face it: there’s not a single ERP system that can perfectly fulfil a business’s requirements.
Sometimes it’s necessary to explore options that can extend your ERP system’s capabilities to support your business priorities.
Going by its description alone, this sounds straightforward enough. Since it’s just ‘extending’, it should be as simple as adding extra software functionalities, right?
Well… yes and no.
One of the more challenging aspects of ERP implementation is properly integrating your data.
Data from additional applications or add-ons must seamlessly connect to and communicate with your ERP system – think financial and other core modules that reside within.
It’s not a simple case of ‘plug and play’. To do so, you’ll need to work with implementers with proven expertise in integrating that specific application or add-on with your ERP system.
There are many applications and ERP add-ons in the Singapore market that perform a gazillion different functions. It’s impossible to cover them all in this post.
But for simplicity’s sake, here are two types of applications that have proven popular among our customers:
Most modern ERP systems come with inbuilt reporting functionalities.
For example, SAP Business One and Microsoft Dynamics 365 Business Central (formerly Microsoft Dynamics NAV) allow you to build detailed reports on all business aspects using time-saving templates.
For some SMEs, these inbuilt reporting features are sufficient for their requirements.
But sometimes, business situations and goals change. Perhaps some of your employees find the ERP system’s templates too limiting. Or perhaps there are specific requirements that require customisation, and your company ends up repeatedly paying your Singapore ERP system vendors more to build these reports.
If you’re using an ERP system and find yourself in such a situation, it may be more cost-effective to invest in a separate reporting solution that empowers your team to build reports on their own.
Ideally, this solution should provide tools that integrate seamlessly with your ERP system so employees can get the data they need without much hassle.
Take Jet Reports, for example. Jet Reports is certified by and developed with Microsoft. It seamlessly integrates with Excel's familiar interface, so your team can start using it quickly.
It also:
Your ERP system’s Business Intelligence (BI) tools help explain why certain things happen in your business and suggest actionable steps which you can take to improve performance.
With BI tools, you can draw upon multiple data sources, perform data analytics, drill down and view the results in meaningful interactive system dashboards.
You can quickly ‘slice and dice’ from there for the insights you want.
In doing so, you unearth new data relationships within your business that could help you address unforeseen underlying issues or explore new business opportunities.
For example, you can use BI to analyse your company’s delivery performance over time against factors such as seasonal demand and customer satisfaction.
By uncovering new possibilities and insights, you can then optimise your processes to reduce inventory wastage and delivery timing. In turn, this helps improve your customer satisfaction.
Through the ERP system, you receive meaningful, actionable insights to grow your business by combining data sources in novel ways.
This makes BI tools especially relevant for higher management and/or business owners in Singapore who are in the capacity to translate new insights into opportunities or business change.
One example of an affordable BI tool for SMEs is Microsoft's Power BI.
This Cloud-based BI suite is not just powerful and intuitive to use, and it also comes free for the Desktop Edition of the ERP system.
With Power BI, users can pull various data sources into one dashboard for rapid, accurate insights. The user-friendly and immersive visuals make it easy for anyone (even those without coding experience) to unearth insights from your data.
In the free version, you get access to Power BI’s basic features. Generally, that’s good enough to get quick, accurate insights from various data sources.
Its immersive visuals also mean it’s quite easy to uncover the story behind your data (e.g., revenue, spending etc.) on your own.
Alternatively, you could pay for the more robust version of the ERP system – Power BI Pro. This paid service gives you access to all basic features, plus the ability to collaborate and more.
Do note you’ll need a Power BI Pro licence to interact with a file containing Pro features – free users won’t be able to do so.
And if you want to share the templates across your organisation, you could subscribe to the Power BI Report Server (on-premise or cloud) or Power BI Premium.
Ultimately, ERP is all about integration. By streamlining various systems in an SME together within a single centralised database, you can quicken workflows and share accurate and timely information with the right people. This thus facilitates better decision-making and planning based on data-driven insights.
We hope you found this ERP software guide useful. If you want to know more about which ERP system could help your business, drop us an enquiry here, and one of our ERP consultants will get back to you shortly.
Alternatively, you can get your free copy of our popular 5-Min ERP Software Comparison Guide below.
