By Mike Lord, Chairman & CEO of Stiltz Homelifts
Global demand for Enterprise Resource Planning (ERP) is exploding. The software market is expected to grow 13.8% a year by 2032, reaching $229.79 billion – up from $87.73 billion in 2024.
Some three-quarters of companies report increased productivity when the likes of finance, HR, customer relations, and manufacturing departments work together through one big, centralised management platform. ERPs provide a single point of truth and data that can reduce errors and strengthen collaboration. SaaS and AI solutions are making ERPs more accessible and affordable for SMEs than in-house systems.
But Mike Lord, CEO and Chairman of homelift company Stiltz, argues that ERPs can cause as many problems as they solve, if not introduced properly. This can range from disruption and interdepartmental disharmony to massive budget overruns.
He has established and improved the use of ERPs at several organisations, covering medical devices to home automation, and is currently helping to introduce a new system for Stiltz. He says there are numerous tactics companies must use to make ERPs really work for them.
Set clear objectives
It’s vital to have clarity on what your company wants to achieve from an ERP.
At Stiltz, the focus of the ERP has been on process change and improving the availability of stock in the various countries it operates in around the world. For a different company, the primary reason for an ERP could be to make processes more efficient, and it must decide the specific ways it wants to do this and what the measures of success will be.
If the aim of the ERP is to improve customer service, say, or achieve consistent compliance with regulations, what are the specific issues a company wants to focus on?
It can be sensible to establish an ERP steering committee, made up of senior leaders in different departments, such as a chief information officer, finance director, and operations director, to establish goals. But it’s vital that companies consult as many other staff members as possible about the current pain points they face and how an ERP could improve the way they work. Company leaders should talk to them individually, where they can.
Investigate which systems will suit you best
There are many more different types of ERP to choose from than there once were, and one size definitely doesn’t fit all.
SMEs may find relatively simple customer-relationship management or accounting software, such as Zoho, works well for functions such as coordinating marketing and sales leads and tracking revenue generation.
Larger companies are likely to require something more complex, which can help organise things like manufacturing processes, substantial supply chains, distribution, requirements planning and dealing with hundreds of partners and thousands of customers.
It’s important that an ERP is flexible and can bolt on new uses as the company develops, perhaps moving into new markets or growing in size. Stiltz has added bolt-ons to its NetSuite ERP to cover everything from marketing and manufacturing to tracking customer journeys.
It’s fundamental that the ERP is as simple to use as possible for teams. However, it should be a system that staff can adjust to relatively easily, but also will make the company work better, rather than simply fitting into the way it currently operates.
Can a company operate using a SaaS, or should the ERP be developed and controlled on-site? The latter will probably cost more but will be easier to scale and customise and may ultimately be more financially efficient.
Avoid choosing a system that isn’t well established. It’s best to select a system with a strong track record of improving operational processes, as well as being scalable and readily updatable to keep pace with business growth. Ensure the system’s provider has a sufficiently large user base to ensure ongoing support; otherwise, the platform may not be financially robust enough to survive.
Ask other companies with similar business models which ERM they’ve used and how it performed for them. Some ERPs and CRMs perform very well for finance, for instance, but less well for operations or other departments.
Be mindful that if one chooses the wrong ERP and users are fighting with it, that’s much more onerous to rectify than taking the time to research it in the first place. Early planning and research are prudent to establish that the chosen ERP is the best possible fit for the business and its workplace culture. Stress-test the available modules and features, and check that they are suitable for all user abilities to understand the depth of training required. This level of product interrogation prior to committing is far less onerous than trying to rectify serious issues during implementation.
Build departmental collaboration
Some 77% of companies say an ERP has broken down silos. But one needs to get employees working together better, prior to the introduction of a new system, for it to be truly successful.
For instance, if unresolved issues exist between customer services and warehouse operatives, implementing an ERP system without fully working through these will only amplify differences of opinion. The net result will be disagreement over implementation, and existing problems will carry over into the ERP.
Good data is vital
An ERP without strong, reliable data – from stock levels to revenue forecasts – won’t provide the tools to enable senior personnel to make informed decisions nor create efficiencies. Clarity on stipulating the nature of data outputs from the ERP is equally important.
Before implementation, companies should undertake an enterprise-wide analysis of how data is recorded and managed to make sure it’s sufficiently robust in terms of quality and that it adequately answers the needs of all departments and stakeholders within the business.
Training is crucial
The people who will be interacting with the ERP daily must be fully comfortable with how the system works, it’ll be an ongoing source of frustration instead of providing the streamlined assistance it is designed to provide.
Allocate sufficient time and resource for IT specialists, ERP vendors and management to train staff on how the new system is used in their particular role.
Appoint “super users” in key departments who can quickly assist with any system challenges. Ideally, these should be people who have already been involved in the testing and development of the ERP in your company, or who have experience using similar systems. Make sure they have sufficient time to help colleagues by reallocating other projects within the team to enable them to provide support as needed.
Keep firm control of budgets
Dealing with the issues above, along with avoiding mission creep and poor spending oversight, can stop costs spiralling far higher than anticipated. But some implementation problems are almost inevitable, so maintain a contingency buffer of 10 to 25%.
Minimise go-live disruption
It’s absolutely vital to test every single process and transaction the ERP will need to record. Spend several weeks conducting checks in a sandbox environment to stress test processes using real users and real scenarios. Whether this uncovers a major issue or simply identifies an order form box which can’t be filled in properly, it could avoid huge problems later.
Ensure data has been verified for readiness, too. There have been instances of businesses being paralysed for weeks, unable to process orders or ship products, when something’s gone wrong with data transfer during an ERP implementation.
Don’t be afraid to closely guide people through go-live. However much training they’ve received, no one is completely confident with a system until they’ve been using it for a while, and some will pick up the new processes much quicker than others.
Looking to the future
ERP planning should include allowances for later upgrades and scalability, which might take place several years after initial implementation.
In Stiltz’s case, five years after successfully implementing an Oracle-based ERP, the business is at a point where the system supporting the manufacturing operation in China can be consolidated into the main system operated by UK and US sales, operations, finance and logistics.
This is probably one of the largest steps the company has taken since the initial implementation and will create a unified ERP for the first time in company history.
