In today’s fast-paced retail environment, it’s more important than ever for organizations to have a modern and efficient Enterprise Resource Planning (ERP) system in place. A modern ERP system can help retailers streamline their operations by systematically reinforcing procedural best practices, improve customer experiences through deeper integrations, and surface timely insights to guide strategic decisions. However, it can be challenging to know what to prioritize when modernizing your retail ERP.

Many retail organizations are still using outdated ERP systems that aren’t equipped to handle the demands of today’s fast-paced retail environment. New technologies to maximize insights on real-time data, open architectures to allow for tight integrations with other solutions, and flexible cloud-based infrastructures that allow retailers to scale their operations seamlessly are just a few of the key benefits retailers are seeking in an ERP investment. Modernizing your retail ERP is often a marathon, not a sprint. However, our retail ERP experts have successfully guided many of these initiatives by prioritizing the following activities: 

Top 5 Activities for Modernizing Your Retail ERP

1. Deeply Assess the Inefficiencies of Your Current ERP Solution

Before making any changes to the ERP system, it’s important to assess its current state. This includes identifying any gaps or inefficiencies in the system as well as evaluating its ability to support the organization’s current and future needs. This assessment should involve input from key stakeholders across the organization, including IT, finance, supply chain, store operations, and customer service. 

2. Benchmark Processes Against Best Practices

Benchmarking business processes against ERP best practices is an essential step to ensure that retail organizations maximize the potential of the ERP solution. Through comprehensive benchmarking, retailers can identify gaps and inefficiencies in their processes and more closely align them with industry best practices. This not only maximizes the inherent efficiencies of a cross-functionally integrated ERP, but also keeps the core of the ERP standard, making downstream enhancements and upgrades far less expensive in terms of resources and cost. 

Benchmarking typically involves comparing an organization’s business processes against a set of best practices established by ERP vendors, industry experts, and other retailers. These best practices cover a wide range of areas, including inventory management, order processing, customer relationship management, financial reporting, and supply chain management. By benchmarking their processes against these best practices, retailers can identify areas for improvement and make changes that can lead to significant cost savings and operational efficiencies. This can include streamlining processes, reducing waste, and improving the accuracy and availability of data. 

For example, Amazon, one of the largest eCommerce organizations, uses an ERP system to track its inventory throughout its complex supply chain, allowing Amazon to manage and integrate various functions at once, such as warehousing, shipping, delivery, and more. Supply chain management is a huge priority at Amazon, as their consumers value dependable and prompt delivery when ordering from them, which is why their ERP system is deeply integrated into operations, supporting Amazon’s ability to deliver differentiated results. 

3. Evaluate Modern ERP Solutions

With a clear understanding of the organization’s needs, it’s time to evaluate modern ERP solutions that can meet those needs. This includes looking at the features and capabilities of different ERP offerings, as well as their cost and implementation timelines. It’s also important to consider the vendor’s track record and reputation, as well as their ability to provide ongoing support and maintenance. 

Retailers should not only look at the features and capabilities of the ERP system itself, but also the availability of “best of breed” solutions that can bolt on to the ERP package. These solutions can provide additional functionality and customization options that are tailored to the specific needs of the retail organization. For example, a retail organization may opt for a specialized inventory management system that integrates with their ERP system. This can provide a more cost-effective and efficient solution that meets the organization’s specific needs. 

Another example is the major food and beverage manufacturer Nestlé. Strict adherence to quality standards is imperative to Nestle when manufacturing and distributing their food and beverage products, so Nestlé uses ERP solutions to ensure their systems follow strict quality control and compliance from start to finish. While this is important to maintain safe food manufacturing processes, it also can be helpful in terms of sustainability, as Nestlé can track and report their sustainably metrics. 

4. Develop a Roadmap for Modernization

Once a modern ERP solution has been selected, the next step is to develop a roadmap for modernizing the core ERP platform. This should include a detailed plan for migrating data from the old system to the new system, as well as a timeline for implementing new features and functionality. It’s also important to identify any potential roadblocks or challenges that may arise during the implementation process. Change within the organization is one such challenge that is often underappreciated. 

ERP upgrades can be complex and disruptive, requiring significant changes to business processes, technology infrastructure, and employee roles and responsibilities. Organizational Change Management (OCM) helps ensure that these changes are managed effectively and that employees are prepared and supported throughout the upgrade process. This can include planning training and support, communicating changes effectively, and involving employees in the planning and implementation process. By prioritizing OCM considerations, retail organizations can minimize disruption and ensure a smooth transition to the upgraded ERP system, leading to improved business outcomes and increased employee satisfaction.

5. Implement the New ERP System

The final step in modernizing the core ERP platform is implementing the new system. Implementing a new ERP system can be a challenging process. It requires careful planning, coordination, and execution to ensure a successful outcome. By following a well-planned and executed implementation methodology, retailers can successfully transition to a new ERP system and enjoy the benefits of deeply integrated processes backed by a solution ready to evolve with the industry. 

Modernizing Your ERP Core 

If your retail organization is looking to evaluate ERP upgrade paths but are wary of some of the challenges around cost and timing; would like to leverage industry-leading practices; and/or want to minimize recurring costs, consider connecting with our team of retail experts. We’d be happy to work with you in modernizing your retail ERP and supporting your organization through that journey.

Contributions from Leah Harding