4 Tips for Building a Scalable Business with an ERP Solution
Picking the right back-office system for your business is easier said than done. There is a whole list of things to consider before you can begin to narrow down the right system for you. To make the experience less daunting, we’re going to run you through our simple and stress-free process.
Consider the Future of your Business
If you’ve gotten this far, you’ve probably already established that your business needs a new system. If you’re not quite sure if you do, check out our blog: Do I Need a Cloud ERP / CRM?
Companies searching for a back-office system generally use their growth objectives as a starting point. If you know what you want to achieve, you can then easily find for the tools to help you get there.
This thought process leads to a whole range of questions, for example:
- Where do I want to be three years from now? In five years?
- Will the cloud solutions I choose today develop the capabilities and feature sets I need?
- Will the tools and systems grow with me, and when I need them to?
These are all valid questions. Your technology provider won’t always give you a five-year roadmap, and even if they did, it would probably change. So it’s best to proceed with an action plan for a scalable system that will make you immune to the changing tides. Gartner, Inc. calls this Pace Layering, which we will elaborate on very soon.
You may find answers to some other questions about ERP and cloud solutions in our article: Answers to your Questions about Cloud ERP / NetSuite.
Maybe you anticipate that your organization will grow exponentially over the next few years, due to a series of anticipated mergers. You’ll then need to replace your Human Capital Management (HCM) software solution with one that is stronger and faster, and you’ll need to do it without disrupting the other parts of your platform.
Wouldn’t it be great if you had a platform where you could add or remove solutions like interchangeable blocks? Spoiler: this system exists.
The Purpose of a Scalable Platform
A Scalable system is the perfect solution for a fast-growing business. Here’s how it helps:
1. Growth Without Disruptions
Change your HCM according to your needs without causing major disruptions to your organization.
Your HCM acts as a module within a larger platform. The way to achieve this is by picking a system that allows you to change and adjust for growth for different departments at different times.
When building an addition to your garage, why should you be forced to gut the kitchen and bathroom, and install a new in-ground pool all at the same time? You don’t have to. You can work independently on one area, without affecting the others.
2. The All-in-One Solution Provider
If you have a scalable platform, you can continue to buy from solution providers who do one thing—and do it really well—because you know that it fits into the larger cloud platform you’ve put into place.
These solution providers knew that to survive in this ever-changing world, they had to learn to seamlessly integrate themselves into companies’ cloud systems.
Seems easy, right? It actually took a lot of people a lot of time to develop this strategy - so you can be sure they know what they’re doing.
Now for some brief history.
Pace Layering was originally created by ecologists who noticed that there are processes in nature that operate in different timescales and exchange very little mass, energy, or information.
Architects Frank Duy and Stewart Brand pointed this out as the reason traditional buildings last.
Frank Duy said, “Our basic argument is that there isn’t any such thing as a building. A building properly conceived is several layers of longevity of built components.”
Technology vendors soon adopted the term and method.
Gartner, Inc. is the world’s leading information technology research and advisory company. Gartner refined the concept of Pace Layering and adapted it to technology companies who have applications that need to change at different speeds in relation to each other.
Gartner’s Three Layers
To help of us non-ecologists understand, Gartner identified three main layers to provide guidance on how these different systems are governed, managed, sourced and maintained.
- Systems of Record: The systems that support core transactional processing and manage the company’s master data. Because these systems are well-entrenched, similar in most companies, and subject to outside regulation, change occurs very slowly.
- Systems of Differentiation: Systems that are unique to company or industry and need to be changed every one to three years.
- Systems of Innovation: New applications built to chase new business. These can have a very short lifecycle, from zero to twelve months.
NetSuite planning and budgeting, order entry systems, and NetSuite accounting software are often part of a single NetSuite ERP package but are separate application modules that belong in the three different layers in a Pace-Layered Strategy.
4 Vital Tips for Picking Your Systems
Now that we’ve run you through all the technical jargon, let’s narrow down our 4 key tips for picking your system. Keep these tips in mind and we can guarantee that you’ll find the perfect match for your business.
- Choose the Right Scalable Platform: Finding a system means picking the right scalable platform that will act as the foundation for your company’s growth.
- Ensure Systems Can be Replaced: The best application is one that can be replaced easily, if needed, without interrupting your workflow.
- Be Prepared for Growth: Different parts of your business will grow at different times and rates. Make sure that your chosen system can adapt to such unsynchronized changes.
- Understand your Systems: Take time to understand the different systems you have in place and their different growth timelines.
There you have it! You are now equipped with everything you need to know to begin searching for your company’s perfect back-office system soulmate. Here is the ultimate guide to choosing your ERP Implementation Partner.