ERP Systems for Non-Manufacturing (Service Management) Businesses

If your business has held the misconception that ERP systems benefit only manufacturers, it’s time to debunk it. Yes, ERP Systems were initially created to address the challenges of managing complex manufacturing processes and coordinating different departments within large manufacturing organizations. But that’s an origin story dating back to the 1960s and 1970s when businesses used Materials Requirement Planning (MRP) systems to manage inventory and production schedules. Fast forward 55 years, and ERP systems have pretty much endeared themselves to the new business-verse, helping both manufacturers and non-manufacturers, both small business and large corporations. If you’ve been reticent to pull the trigger on purchasing an ERP system for your business for this very reason, let’s delve into debunking several long-held ERP myths.

The Myth of Functionalities:
Many businesses outside of manufacturing, such as service management companies, believe ERP functionalities best serve manufacturers, such as production planning and scheduling, bill of materials and routings management, and shop floor control…with a few side items to aid in peripheral services and quality management functions. But your business is wholly comprised of services, why invest?

Debunked:
Today, ERP systems are tailored to serve any business. The best ERPs today contain industry-specific versions or modules/processes tailored to your exact needs. Core business functions such as accounting, human resources, customer relationship management (CRM), supply chain management, and sales (to name a few) are an ERP’s table stakes. Better yet, ERPs provide unique industry processes, such as scheduling in service management or cross-docking and flow-through for a distributor. As a Service Provider, you may provide a variety of offerings such as rental units or equipment leasing. In today’s market, maintaining accurate inventory records is crucial. You might also consider implementing a call center to allow customers to report issues, which could lead to depot or field repairs, you could provide spare parts for purchase, or you may have a diverse range of service contracts available, each with its own unique pricing and conditions. Under the guidance of an ERP system, all these functions can be integrated into a single platform, so all your departments are communicating in real time.

The Myth of Complexity:
Service management businesses (assuming that their operations are less intricate compared to manufacturing processes) often feel there’s too much effort allotted to learning the intricacies of an ERP system, effort that could be better used elsewhere in the company. In addition to the learning curve, the perceived vast amount of time involved in ERP implementation may also give any business owner pause in pulling the trigger. Why redirect all your workforce’s attention to yet another automated program that may or may not provide a timely return on investment?

Debunked:
Better ERP systems providers have invested much of their development time in enhancing user ease and reducing time to value and implementations to the point that most systems can be up and running quickly. And yes, you can operate your ERP system from your phone or iPad…even while you are standing in the supermarket aisle to pick up your groceries. And let’s face it, Gen X, Millennials, Gen Z (and soon, Gen Alphas) prefer to work electronically, using features that remind them of their favorite apps. Finding, training, and retaining talent is crucial in today’s world and today’s modern, cloud ERP and its user experience assists companies with managing talent, including change management and subsequent learning curve. Any ERP consultant worth their weight will keep you as productive as possible as you adopt industry specific processes and the latest innovations, such as  Artificial Intelligence and Machine Learning (AI/ML) for your users. Your ERP system will completely automate your business’ activities using Robotic Process Automation (RPA) and Generative AI to create the best user experience…which is no user experience.

The Myth of Cost Outweighing Benefits:
Service management businesses may erroneously believe that they will need to add more expensive functionalities to an ERP system to run a small or less intricate business, and this cost will vastly outweigh the benefits. As a result, they may prioritize other stand-alone or siloed software solutions for functions, such as assisting the accounting team with better financial planning and budgeting, or empowering the sales team with best of breed customer relationship management (CRM), or adopting the latest acronyms of AI, ML or RPA to better motivate all employees to join the digital age. But do these solutions even talk to each other? Do they give you one source of truth that’s available to your entire workforce? If not, will it be possible for an ERP system to merge current processes as well as adequately address new service management business needs without breaking the bank?

Debunked:
The current ERP market realizes that one size does not fit all businesses. It offers many implementation options and extensions that can allow any business to afford one and obtain a timely return on that investment. Cloud-based ERP systems eliminate the need for on-premises hardware, giving businesses the option to pay a subscription fee. ERP systems are also agile and scalable, allowing your business to start with the essentials and add more functionality as it grows. But most importantly, they allow real-time visibility and one source of truth for your workforce. All these options (and more) will be more thoroughly discussed in the next article, so be sure to stay tuned.

Overall, it’s essential for ERP vendors and consultants to educate both manufacturing and non-manufacturing businesses about the versatility and benefits of ERP systems across various industries. Demonstrating real-world examples and success stories of ERP implementations in service management sectors can also help dispel the notion that ERP is exclusively for manufacturers. Your business’ origin story may have begun on paper, but it doesn’t have to end that way.