The wholesale distribution industry, like many others, has embraced Enterprise Resource Planning (ERP) software as a means of streamlining its operations and improving its bottom line. However, implementing an ERP system can be a complex and challenging process. In this article, we will discuss the key challenges of ERP software implementation in the wholesale distribution industry, including cost, complexity, processes, and managing resistance to change.
Make Sure You Know the True Cost of Implementing ERP
The cost of an ERP software implementation can be a major barrier for small to mid-sized wholesale distributors. In addition to the upfront costs of purchasing hardware, software, and consulting services, there are also ongoing costs associated with maintaining and upgrading the system. These costs can include software maintenance, hardware upgrades, and training for employees. Choosing a fully hosted and managed solution like NetSuite can minimise a lot of these costs, and ensure that the true cost of the solution is transparent and predictable.
Factor In a Contingency Budget for Unforeseen Costs
Another challenge with calculating the cost of an ERP implementation is that additional costs may arise during the implementation process. For example, customising the ERP system to meet the specific needs of the wholesale distribution industry may require additional development work, which can add to the overall cost. Similarly, the integration of existing systems and processes can also increase the cost of an ERP implementation.
The Benefits Usually Outweigh the Costs
It is important to carefully consider the cost of an ERP system and to budget accordingly. Despite the cost challenges, an ERP system can bring significant benefits to a wholesale distribution business, including improved efficiency, better decision-making, and increased profitability.
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Don’t Underestimate the Complexity of the Process
ERP software is designed to be highly customisable, allowing it to meet the specific needs of various types of wholesalers. However, this customisation can also add to the complexity of an ERP implementation. In the case of the wholesale distribution industry, there may be a variety of unique processes and systems in place that must be integrated with the ERP system such as shipping platforms, eCommerce platforms or client portals. This can make the implementation process more complex, requiring significant expertise and resources.
The complexity of ERP software can also extend to the day-to-day use of the system. Some ERP systems can be complex to navigate, with a large number of features and functions that can be overwhelming for users. This can make training and adoption a challenge, especially for employees who are not familiar with using technology in their day-to-day work.
Choosing a system that has been designed to be “User First”, like NetSuite, will minimise the learning curve for your team members and give you the best possible chance of successfully managing change.
Choose an ERP System Designed for Wholesalers
It is important to choose an ERP system that is designed specifically for the wholesale distribution industry. This can help to minimise the customisation required and ensure that the ERP system is well-suited to the specific needs of the business. In addition, it is important to provide extensive training for employees to ensure that they are able to effectively use the ERP system in their day-to-day work.
No Pain No Gain
While the complexity of ERP software can present challenges, it can also bring significant benefits to the wholesale distribution industry. ERP systems can help to streamline processes, improve efficiency, and provide better visibility into business operations. By carefully considering the complexity of ERP software and planning accordingly, wholesale distributors can successfully implement an ERP system and realise these benefits.
”ERP software is designed to be highly customisable, allowing it to meet the specific needs of various types of wholesalers. However, this customisation can also add to the complexity of an ERP implementation.
Tiernan O'ConnorSales Director - DWR
Ensure You Fully Understand Your Internal Processes and Where You Need to Improve
The implementation of an ERP system in the wholesale distribution industry often requires significant changes to existing processes and workflows. This can involve the integration of multiple departments and processes, such as inventory management, order processing, and accounting. While these changes can bring significant benefits, such as improved efficiency and better visibility into business operations, they can also present challenges.
Getting Stakeholder Buy-In
One of the biggest challenges of changing processes during an ERP implementation is ensuring buy-in from all stakeholders. This includes employees, managers, and executives, who all must be on board with the changes in order for the implementation to be successful. Additionally, effective communication is key to ensuring that everyone understands the changes and the reasons for them.
Prioritise Training
Providing adequate training for employees on new processes is critical. Changing systems can be especially challenging for employees who are not familiar with technology or who have been using the same processes or systems for a long time. To overcome this challenge, it is important to provide comprehensive training and support to ensure that employees are able to effectively use the ERP system and adopt the new processes.
Be Ready to Manage Resistance to Change
Managing resistance to change is a critical challenge in the implementation of ERP software, especially in the wholesale distribution industry. Employees may be resistant to changes brought about by implementing a new ERP system for various reasons, such as a fear of the unknown, a lack of understanding of the benefits, or a concern about job security. In the wholesale distribution industry, these concerns can be amplified, as employees may be worried about the accuracy of data in the new system and the potential impact on their daily routines.
To overcome this challenge, it is important for organisations to effectively communicate the benefits of the ERP system to employees and involve them in the implementation process. By including employees in the implementation process, organisations can help to address their concerns and provide them with the information and support they need to successfully adopt the new system.
Reassurance is Key
It is also important for organisations to address any concerns about job security and the accuracy of data in the new system. By providing employees with reassurance and addressing any technical issues that may arise, organisations can help to build trust and ensure that the ERP system is implemented smoothly and successfully.
In Summary
ERP software implementation in the wholesale distribution industry can be a complex and challenging process. However, with proper planning and preparation, these challenges can be overcome, and the benefits of an ERP system can be significant. To ensure a successful implementation, it is essential to involve key stakeholders, manage resistance to change, and have a thorough understanding of the costs, processes, and complexities involved.
If you are considering implementing ERP, reach out to the team at DWR for a comprehensive evaluation of your requirements.
