5 Things to Know Before Installing an ERP System

Many organisations that begin to want a system to help with their work naturally tend to encounter problems that can’t be solved by the old way of working — for example, using only Excel to calculate or build production plans, which is still a manual system and gives rise to calculation errors and production formulas that are inaccurate and not real-time. This leads many growing companies to choose ERP software for this part, because it covers all of the organisation’s work. But before choosing an ERP software program to use, what should you know? Let’s take a look.

1. ERP is an organisational management system

ERP is an organisational management system that many companies still mistakenly think of as an accounting system, but ERP’s special qualities are far greater than that, because it can connect all of the work within the organisation together — whether accounting, finance, warehousing, production — and it has add-on parts for other areas such as the point-of-sale system, HR management, assets, or even service work, all of which are supported and connected to one another. This makes work systematic and lets you trace data back easily. But the price of an ERP system is rather high, ranging from 1,000,000 to 50,000,000 baht, and some systems run as high as nine figures. It depends on each organisation’s needs — how many users they choose to use, or what usage improvements they make.

2. Setting up the system has high costs if you don’t know this?

Each vendor’s system has a different way of charging fees, but most have what are called Implement fees and License fees, which business owners must compare in terms of both price and the system’s capability coverage. On this point, we would say outright that customers should talk to and compare systems from several vendors, basing the decision mainly on the system’s coverage, because ERP is an off-the-shelf system and each vendor already has its own standard functions. If a business owner chooses a system that doesn’t meet their needs because they chose based on a cheap price, what they will run into is that customisation — or improving the system to fit the organisation’s operations — may carry a price or budget that escalates considerably (and every system does require some customisation to meet the customer’s operational needs).

3. ERP has a service fee for Support

Support is unrelated to the Implement fee, License fee, and customisation fee — this is what is called a service contract (MA). Many organisations don’t understand why they have to pay. As for the service (MA) fee, each system developer charges it differently; for example, some charge 20% of the total License fee, and also factor the customisation fees into each year’s calculation. But you must understand that if your organisation pays this contract fee, the Support team will continue to take care of you. Certainly, during the first 5 years you may still need to rely on the Support team to help you use the system effectively, and from our 25 years of experience, we have never met an organisation that didn’t rely on the Support team to look after their use of the system, because every organisation tends to have staff coming and going all the time. But if you are confident you are an expert in the system and don’t want to renew the contract, you can do so — though it depends on each developer company’s conditions for usage. As to whether you can still use the system if you don’t renew the contract, try consulting your system development team about it.

4. Appoint a responsible team within the organisation

This matter is extremely important, because from experience many organisations tend to assign one single person to be responsible for looking after the system. But the problem that arises is that once the main responsible person resigns, the work can’t continue, and they have to spend money on additional training. Of course, an ERP system is involved with every department in the organisation, so executives should set up a responsible team in each department — both a main responsible person and a co-responsible person. This will make the use of the ERP system go smoothly and avoid problems in the long run.

5. Staff unreadiness is often an obstacle…

This is considered extremely important, because there are many companies whose system rollout failed, arising from the users not adapting and primarily clinging to their old habits. Some organisations resist to the point that many executives have to give up and stop using the system, because besides having to sit and do work for the company, the staff also have to spend time learning to use the system. This matter may need to be discussed internally before deciding to seriously install the system, because the perspectives of executives and staff differ according to each person’s position and the nature of their work, since what the staff will question is whether the system is really necessary, or whether it just adds to the staff’s workload.

If you are hesitant and unsure which vendor’s system to choose, we would recommend the PlanetOne ERP system, which is highly flexible and supports every kind of business operation. With a large-scale system but a price friendlier than ordinary systems of the same size — and a Thai development team with more than 25 years of expertise — if you want a system that understands how Thai people work, we recommend the PlanetOne ERP system as one of the choices for your success.