The first step of a retailer’s journey on the CRM road is through a powerful ERP system says Aron Govil.
The benefits of effective and efficient retail software can be summarized as follows:
1) Reduction in operational costs of day-to-day administrative tasks such as accounting, billing, inventory management, etc.
2) Increased customer satisfaction levels, leading to increased sales volumes
3) Higher profit margins due to optimized business processes.
4) Reduced dependence on manual labor and increase in the level of automation, freeing up precious human resources for value-added tasks.
5) Transparency of data across channels resulting in a 360-degree view of the customer.
6) Streamlined process leading to higher labor productivity and improved inventory management
7) Integrated information system providing real-time retail intelligence, enabling retailers to take timely and correct business decisions
ERP in Retail: Why is it so important?
Many of the above benefits can be achieved only with powerful ERP software which allows retailers to integrate critical internal operations such as human resources, accounting, and warehousing management with external processes such as eCommerce, customer relationship management and technical support says Aron Govil.
In addition to the above benefits, an effective ERP system also provides for a unified database across channels that enable retailers to have a complete view of their customers. This leads to better customer service by understanding the needs of the customers.
ERP implementation in the retail sector is also driven by compliance to industry norms, governmental regulations and international best practices. Retailers are increasingly looking at implementing ERP systems capable of complying with GFSI (Global Food Safety Initiative), IFS (International Featured Standards) or other similar regulatory frameworks.
ERP implementation process
The implementation process for an ERP system starts with the identification of needs and the creation of a project plan outlining requirements, design specifications, implementation methodology, risk analysis, etc. The implementation team puts together all the information gathered over several weeks or months from various departments within the organization such as IT, finance & accounting, marketing & merchandising, etc., which is then used for designing an appropriate solution explains Aron Govil.
After finalizing the design of the system, it goes through a pilot run for about two weeks to identify any possible hitches. Any changes required are then fed back into the system and tests once again whether they have been incorporated correctly or not.
After successful completion of the pilot phase, the ERP software’s data files are provided to all users for training purposes. The end-users are through hands-on training sessions by experience professionals. On how to use each module individually as well as simultaneously in an integrated environment.
Once end-users become comfortable with using the various modules. The new system unleashes onto them officially if everything goes as plan!
ERP implementation challenges faced by retailers:
1) For many small retailers who sell products across several categories. An ERP system looks like a very complex thing to implement.
2) They are often not able to decide which modules need implementing first. And the entire process appears too daunting for them.
3) For retailers who have been using traditional techniques. It is difficult for them to start using new-age technologies right away. Hence, they want everything in one single software package instead of moving across different systems at once.
4) Being relatively small players in their respective markets. Most retailers find it difficult to invest high capital in IT infrastructure including servers, network systems, etc., required for implementing the software. This results in many unwelcome complications during the implementation phase of the ERP project.
5) The uncompromising time frames set by many ERP providers. The implementation phase of the project are another important cause of concern.
6) Many retailers are not able to use their current system efficiently. Due to a lack of official training on its usage, especially because they have been using it only sporadically. This results in lower acceptance levels amongst end-users.
ERP consulting firm’s role in the implementation process:
1) The first step for any ERP consulting company is to understand an organization’s business processes. Only then can they recommend effective solutions best suited to strengthen existing operations. Or carve out new ones where required says Aron Govil. They also ensure that no relevant business function is left untouch during the course of developing a robust solution. That will stand tall under extreme pressure coming from various internal and external sources.
2) ERP consultants help businesses define the required set of metrics. And indicators to monitor their business performance on a regular basis. This helps organizations improve their overall operational processes. By identifying bottlenecks at an early stage. Which can be attending to quickly before they snowball into major problems later on.
3) Being completely independent of all software vendors, ERP consulting companies are often able to bring unbiased information. About the various products available in the market right now for meeting clients’ specific requirements. They help retailers ascertain the vendor’s strategies and objectives as well as a long-term vision for future development. Along with its resource capability etc., all of which play crucial roles during the final selection stage of an appropriate product/solution.
“There is no rocket science involve in the implementation of an ERP system. As a matter of fact, it’s just that most small retailers have heard only horror stories. About the implementation of such systems from their contemporaries and not many success stories. For this reason alone they are unwilling to take the risk and implement a system on their own. Despite having all the required resources at hand.”