Companies often refer to enterprise resource planning (ERP) implementation projects as a journey. Installing a new ERP system can be a complex and time-consuming task, with little room for error. This is why many companies hire an ERP consulting firm to guide them through the process. 

Why hire an ERP consultant?

ERP consultant professionals specialize in supporting organizations as they navigate, manage, and execute the installation of ERP software systems. Whether an individual or a team, consultants assist companies in avoiding potential pitfalls and reducing the risk of costly mistakes during an ERP transition. Their knowledge can identify ways to boost productivity and efficiency in tax and other departments — insights that might not be obvious to those new to ERP systems.

ERP implementations are multifaceted projects involving many layers and steps. ERPs replace a company’s legacy network with a single, centralized, and unified platform that manages business functions and processes for finance, tax, accounting, HR, supply chains, and procurement. The ERP implementation process goes beyond selecting and installing the right system. It also involves breaking down information silos, restructuring workflows, migrating data from the old system, retraining personnel to use the new system, and handling many other details.

Implementing an ERP can take a year or longer. Depending on the company's size and the project's scope, you may also face other complicating factors such as:

• The overall complexity of the business

• The size of the system and the number of software modules included

• The number of business functions affected

• The volume and quality of a company’s existing data

• Whether the system deployment is cloud-based, on-premises, or a hybrid

• The speed and competence of the ERP vendor

Do you need a consultant?

Smaller ERP projects may not need a consultant, but as projects grow larger, having one can be very helpful. Small to mid-sized companies with limited in-house technical expertise can greatly benefit from a consultant’s help.

One of the best reasons to hire a consultant is that ERP implementations are complex and require specialized knowledge that a company’s IT staff usually lacks. Underestimating the time, work, and expertise needed for a successful ERP implementation is one of the biggest mistakes a company can make. Consultants provide the knowledge and guide the implementation process professionally and responsibly.

Are consultants a cost-effective expense?

An ERP consultancy can be expensive, but many view the consulting fees as an investment in the organization’s future. Consultants act as an insurance policy against disasters, and ERP installations are full of opportunities for calamity to strike. Compared to the potential cost of delays, mistakes, data errors, system re-dos, and other problems, consulting fees can be a relative bargain.

ERP consultants save companies time and money in other ways, too. They manage the implementation process efficiently, and they understand the most cost-effective ways to manage and deploy the necessary resources to complete an ERP project.

A knowledgeable consultant effectively decides when to engage the internal ERP team and when to allow them to focus on their regular tasks, minimizing workload disruptions. When extra costs arise, like customizations or data management problems, consultants negotiate terms and assist in selecting reliable third-party vendors, if necessary. They also ensure the project remains on schedule and isn't hindered by preventable setbacks.

What does an ERP consultant do?

You don’t need to hire a consultant to choose an ERP vendor, but a knowledgeable consultant can be a huge asset in the selection process. Consultants typically understand the capabilities of various ERP systems better than anyone inside the company. Once they grasp the business’s criteria for a new system, they can help identify the ERP that best fits the organization’s goals and needs.

An ERP consultant generally starts by meeting with stakeholders and conducting a thorough needs assessment to help understand:

• The company’s leadership structure

• Which departments use the ERP

• The current business processes

• The greatest challenges and obstacles

• The gaps that need to be filled

• The company’s and employees’ technological proficiency

Before implementation, consultants may work with a company’s internal ERP team to map out current workflows and processes. They will typically identify pain points, barriers, redundancies, and inefficiencies that the ERP should eliminate or improve. Once the consulting team understands these variables, they are well positioned to help evaluate and select the ERP software that best fits the company’s business requirements, existing systems, budget, and industry.

What does the needs assessment process involve?

Before selecting an ERP system, consultants and management must work together to conduct the necessary needs assessment. The goal is to clarify and articulate the project parameters in as much detail as possible. This process not only provides the consultant with the necessary information but also equips the organization’s leaders and internal ERP team with the background knowledge needed to understand where and how they can effectively assist as the project unfolds. 

The basic steps of a typical ERP needs assessment are:

Define business goals and objectives. Organizations adopt ERP systems when existing systems no longer meet their needs and goals. Therefore, it’s imperative to ask what the business’s goals are, and what is the plan to achieve them. The answer should include new product or service introductions, revenue projections, efficiency metrics, productivity goals, expansion plans, hiring expectations, and other factors influencing the business’s future. Understanding the business’s direction and strategy helps establish the criteria for choosing an ERP system, ensuring alignment between the new technology and the company’s goals.

Evaluate current systems and processes. Map out the existing systems and processes to identify areas needing improvement. Look for bottlenecks and pain points that the new ERP should address, as well as inefficient workarounds that the solution can streamline.

Determine integration requirements. An ERP system doesn’t replace all enterprise software, so catalog any current business applications or third-party solutions that need to integrate with the ERP. These options might include HR systems, customer relationship management (CRM) software, e-commerce platforms, finance and accounting tools, tax engines, and inventory management software.

Identify individual department needs. Since an ERP impacts nearly every aspect of an organization, it’s important to understand how each department will be affected and whether opportunities exist to improve departmental functions under the new ERP. Talking with department heads allows planners to predict potential problems, set expectations for the ERP rollout, and make any needed adjustments once it goes live.

Assess data security issues. Every business must secure its data. However, industries like law firms, financial institutions, accounting firms, and hospitals have stricter legal obligations to safeguard client and patient information. Security features are a key consideration when choosing an ERP, and any consultant hired to assist in the selection process needs to understand the organization’s data security requirements.

Check customization needs and scalability. Before selecting an ERP, it might be difficult to determine the extent of customization needed. Recognize that customization can raise costs and lengthen implementation time. Also, consider whether the ERP can grow with your company, especially if you expect significant expansion. 

Establish budget and timeline. ERP implementations are expensive and can take up to a year to complete, so it’s vital to set an adequate budget and establish a realistic timeline. The timeline should include the consultant selection process, a rough implementation schedule, and any necessary training or support before and after the system goes live.

Companies should consider many other details during an ERP implementation, and these can be fleshed out as the project progresses. However, the steps outlined above provide a solid foundation for collaboration with consultants and representatives from the chosen ERP provider.

Selecting the right ERP system

Evaluating and choosing an ERP system is a significant undertaking, which is why a consultant’s help can be invaluable. Generally, the evaluation and selection process should cover these key areas:

• ERP core features and functionality

• Flexibility and scalability

• Integration capabilities with other software

• Compatibility with existing systems

• Adaptability to future technologies

• Ease of use

• Data security

• Vendor reputation and experience

• Vendor support services

• Ownership costs

The bottom line is that all ERPs have different strengths and capabilities. Most ERPs include built-in capabilities for core business processes, such as general accounting, finance, inventory and supply-chain management, and human resources. However, they may need additional modules for tax automation, e-commerce, predictive analytics, and other advanced functions. A consultant can help narrow down the options by eliminating systems that won’t work well for your business size, growth requirements, industry, technical infrastructure, or functional needs.

Planning and implementation

The next step in ERP implementation is the planning phase. Consultants assist by working with company leaders to develop a detailed implementation plan outlining all necessary steps to deploy the ERP system. These steps may include, but are not limited to:

• Establishing timelines and expectations

• Identifying available internal and external resources

• Evaluating data quality for migration purposes

• Transferring data from the existing system to the new ERP system

• Identifying and organizing training needs

• Customizing the ERP to communicate with other essential business systems, such as finance, tax, HR, and procurement

• Optimizing the system to improve processes, maximize efficiency, and increase productivity

Throughout this process, consultants help companies navigate the unfamiliar terrain of an ERP implementation and smooth out any bumps along the way. When the new ERP goes live, consultants can stress-test the system to ensure proper functionality and provide ongoing support once the system is operational.

Change management

An ERP consultant can also assist with change management, another crucial element of the implementation process.

Change management is essential because switching to a centralized ERP system isn’t just about the technology, it’s also about the people who use it and how it impacts their daily work lives. Adjusting to a new ERP system often involves cultural changes not everyone is inclined to embrace. So, it’s invaluable to have someone in charge who understands how the ERP will affect the company’s culture and can help manage the transition on a personal level.

Part of the challenge is managing expectations and setting up clear communication channels. Create a narrative that highlights the advantages of the new system. This story should show how the new ERP will help the organization reach its long-term goals.

Choosing an ERP consultant

It’s worth noting that a company is unlikely to succeed in the ERP implementation process with the wrong consultant.

Before hiring an individual consultant or a firm, it's vital to thoroughly research and confirm they have the right skills and experience. Consultants often have specific strengths and weaknesses. For example, they might be tech-savvy but less skilled in change management. Many also specialize in certain ERP types or brands, and few are experts in everything.

To ensure a high level of professionalism and experience, look for consultants certified to work with certain systems. For example, Thomson Reuters has certified consultants with deep expertise in ONESOURCE solutions and has a proven track record of successful implementations. They also have access to the latest tools and best practices, along with full support from the Thomson Reuters ONESOURCE team.

While technical expertise is crucial, it's equally vital to choose a consultant whose business and communication style align with your company’s culture. Remember, you could work with these people for a year or more, so select a strong personal and professional fit.

Discover how our ONESOURCE Determination Partner Network can enhance your ERP implementation, streamline integration, and optimize tax technology — unlocking your business's full potential. Connect with certified experts today.