ERP Consultants - a necessary evil or a real help?
What roles do ERP Consultants from a Software House play or what help can an Independent ERP consultant provide?
The Use, Limits and Benefits of ERP Consultants
In the context of digitalisation initiatives and in many projects with the goal to improve competitiveness, companies are relatively quick to focus on the link between digitalisation and the necessary support from an ERP system. In this way, a company should gain competitive advantages through effective planning and control, utilising efficient workflows and through the integration of all data within an ERP system.
At the latest when a company has decided to purchase a new ERP system, questions arise that can be similar to the following:
- How extensive should our ERP selection be?
- Which elements (modules) do we want to consider in an ERP selection?
- How do we find the best ERP system provider for us?
- Which ERP system should we introduce as a company?
- Who will be the ERP project manager in our company?
- Should we get external help from an ERP consultant?
- How sure can we be that the ERP consultant is independent?
- What influence do we want to give an ERP consultant?
How Should We Think of an ERP System Today?
Depending on the company, supporting the requirement of the supply chain (supply chain management), development, design, procurement, delivery logistics, service and customer service are core processes that must be supported by an ERP system. Core processes can look different depending on the industry and company. Some companies list financial processes, HR requirements or the provision of data for e-commerce systems as part of their ERP core processes.
Common to all companies is that the management needs data generated with the help of the ERP system to be prepared, provided and available for management decisions.
The requirements range from long-term periods (monthly, yearly) to real-time information on the status of a machine, a production order or the stock level. It is crucial that an ERP system must be able to access all data on a common database. This design is different for most companies, as is the presentation of the ERP data collected and processed.
Today's ERP Systems are mostly used in 3 types of installation:
- Operation on the company's own servers (on premise).
- Operation in a cloud as a software service (SaaS) and
- Operation in a mixture of both types of operation (hybrid ERP systems).
What is the Role of an ERP Consultant?
First of all, it is important to present the terms and job titles of ERP consultants which can be identified into three categories:
1. ERP consultants in the software industry - (employed by a software company)
2. ERP consultants from the consulting and advisory sector (employed by a consulting company/consultants)
3. ERP consultants in the client company to advise the users (company and user is the employer).
Several years ago, self-taught ERP consultants were more numerous than today, and mostly consisted of experienced employees who took on the role of mediator between I.T. and business in a company.
The Journey from Company (User) to ERP Consultant to Software House
Some early ERP consultants also originated from specialist departments, having then made the leap to a job in SAP, Microsoft Dynamics or ERP System house to provide support there as an ERP consultant for medium-sized companies in Pre-, After-Sales or Implementation. When making the leap from user to software house, process expertise and real-world application knowledge was usually rewarded monetarily. This could often be advantageous for a company that wanted to install software, because a "practitioner" knew what was involved in practice. Subsequently, training requirements for ERP Consultants have increased dramatically. As a result, the degree of qualifications and certification has increased, especially for the introduction of ERP systems and ERP solutions, the result being that increasing numbers of ERP consultants with comprehensive theoretical training are available.
The Path From a Software Company's ERP Consultant to the User
The leap from Software House to User has occasionally been made, but often fails due to the monetary structure in a production company, since the software house has priced in the constant changing of workplaces and locations, permanent travel and longer working hours on site with the customer. The range of offers for permanent training, especially on Microsoft Dynamic, SAP and Oracle ERP systems, is usually larger for ERP software providers than for a medium-sized company.
Qualifications & Tasks
Category 1: ERP Consultants of ERP Software Manufacturers or ERP System Providers
Today, there are usually academically trained employees who come from the fields of business administration, logistics, industrial engineering and other faculties or trained salespersons with an affinity for I.T.
The very first task is usually sales support during presentations to prospective customers or customers who want to purchase new modules. Through intensive training on the software product (on the software package as a whole, or as a module specialist e.g. for the module Purchasing or Materials Management etc...) it is possible to gain extensive knowledge about the software solution. This intensive involvement and permanent training on the performance of their own product makes the ERP consultant from the software house a predestined contact person for the customer of the software house. If the social component of presentation and argumentation techniques is also pronounced, an ERP consultant is then also gladly used as a presenter at the potential customer.
Where is the ERP Consultant of the Software House Valuable and Effective?
- When it comes to demonstrating the capabilities of the software.
- When it comes to specific requirements for a software solution.
- When it comes to applying best practice knowledge (how could this or that problem, or business process be solved with the software?).
- In the pre-sales or implementation phase, the ERP consultant of the software company is often the contact person for the real installation of the software and the process parameters.
What are the critical stages for an ERP Software Consultant from the Software House?
- The larger the software packages, the more likely the consultant will limit himself to one package or module. This can lead to the fact that in the case of process or interface questions, no information can be given about the other module because it is simply not known and reference must be made to the colleague who is in charge of the other module.
- When adapting the software to the customer's circumstances, it can happen that the ERP consultant implements the functional solution of his software, although it might have been necessary to question the overall process in the company. This is often because the installation has to be completed.
And Always Remember ...
"... the ERP Consultant of an ERP provider (Software House) always places his product first, meaning for the potential customer, a neutral ERP Consultant providing an unbiased ERP selection historically provides the greatest yield in achieving the best and most accomplished ERP solution."
Category 2: ERP Consultants From Independent ERP Consulting and Independent ERP Consultancy
Where is an ERP Consultant from an ERP Consulting Company Valuable and Effective?
- Independent consultants are usually used for strategic IT tasks, the design of organisational solutions and the definition of requirements for an ERP system or business software. The idea here is based on the purchase of knowledge and best practice, rather than the purchase of capacity.
- Due to the use in many companies, it can be assumed that the consultants know many questions for which they can incorporate solutions or best practice into the conception. This is especially true if they are consultants who have dealt with the requirements of the industry and know how the efficiency ratios and KPIs of the industry market can be profitably used for the client. As a rule, consultants from consulting companies are also prepared in their training for solving business cases, for analytically and methodically clean, comprehensible procedures and for the use of presentation techniques. Normally, ERP consultants are trained on industries and industry packages.
- The real strength of the consultants, however, is their independence in the preparation of concepts, requirement catalogues, ERP specifications and the expertise in the selection of software partners for the introduction of ERP systems, for example. The support of ERP projects at companies is one of the core elements of an independent ERP consultancy.
- ERP consultants from consulting companies are able to define test scenarios, qualify the results and thus give the customer the assurance that the ERP software installed or used in the cloud meets the requirements from the contract management.
- Independent ERP consultants provide support in drafting the contract and can give advice on which points should be given special attention in contract management.
They are only obliged to their client and do not have to sell an ERP solution, but look for the best solution for their client.
Where are the Limits, and What Are the Critical Points for an ERP Consultant?
- If an ERP Consultant has too little professional experience, they are less suited for the design and implementation of processes. However, for project work and the definition of organisational models and/or creation of requirements concepts, such ERP consultants would be well suited under the leadership of experienced ERP Project Managers.
- The combination here of an experienced Project Manager and a young, critical, inspiring team is the key to success and to excellent business design and its subsequent implementation.
Category 3: ERP Consultant in (from) the Client Company
The degree of certification can be relatively high, but it is usually lower than in the consulting sector or the software industry. Why is this so? The reason is usually due to the age of the in-house ERP consultants and also the structure of the internal organisation.
It also depends very much on the organisational unit to which the in-house ERP consultant reports. Is he a member of the I.T. family or is he a member of the business area in order to be able to actively contribute process solutions and process optimisations during ERP selection and ERP implementation?
What competences does he have and what is his area of responsibility?
What are the Critical Points for an ERP Consultant of an ERP Systems Provider, Regarding the Position of Interest as a Seller of Software and Programming?
Wherever the users of the software solution have direct access to the in-house ERP consultant. There, requirements can be articulated, potential for improvement can be discussed and training concepts can be developed. The larger a company is, the more likely the in-house ERP consultants are also trained on packages or modules. It is also important to distinguish between system consultants for the infrastructure (mostly administrators) and the process consultants who take care of and earn money for the optimisation of I.T. business processes and the cooperation of different software packages. The smaller a company is, the more likely it is to have many things in one person. Not necessarily the system support, but rather the responsibility for several user software packages in-house.
- In-house ERP Consultants are valuable where they can have a direct impact, eliminate errors immediately, set up test scenarios, migrate the software to new versions and record, cluster and prioritise the users' requirements for the system for implementation. Investment requirements can then result from this and communication with the software supplier can take place at a high technical level. The internal ERP consultants can thus be the users' mouthpiece to the supplier.
Where are the Limits for In-House ERP Consultants, or Where Does it Become Difficult for an In-House ERP Consultant?
- The limits clearly lie in the question of further training and the possibility of familiarising oneself with intricacies of the purchased software. It is not always about being able to work at the programming level, but mainly about the ability to administer and customise the purchased software, i.e. to adapt it to the business.
- Another critical point is whether the in-house ERP Consultant really knows the user's business processes, for only then can he suggest optimisation solutions to the user that might be possible with the software used. Frequently, there is not enough time for both further education and training, as well as for dealing with the user's business processes. Unfortunately, this means that an optimal use of resources of the in-house ERP consultant is not always guaranteed. Especially in the context of ERP implementation and the search for the best process solutions, it is crucial to have enough time to deal with the ERP software solution.
Conclusion – Notes on the Use of Different Types of ERP Consultants in ERP Projects.
The various tasks of ERP Consultants require good and very good training in order to be able to meet the requirements of the users. The tasks of the ERP Consultant require high social competence and communication skills. The joy of imparting knowledge and best practice must be given to all ERP Consultants.
Software and, in the meantime, especially the Business Models change so quickly that it is indispensable to really keep learning and to think in an interdisciplinary way, especially in the context of business processes. It is clear that ERP Consultants, regardless of their employer, fulfill an important task to help the customer and their own company to realise and secure competitive advantages.
Independent ERP Consultants, used Correctly, can be a Valuable Support for All Decision-Makers and for Future Users of ERP Software Programmes.
This is Regardless of Whether a Microsoft Dynamics 365 Solution, an SAP S4 Hana, Oracle or Any Other Industry-Specific ERP Solution is to be Used.
Of course, this article cannot depict all aspects of the task, it would go beyond the scope of the available space, but it is intended to show examples of important tasks of ERP consultants.
Below is an infographic outlining the different ERP Consultant roles: