GUIDE : What are the steps to choose an ERP for a professional services?

Despite a service company's desire to equip itself with an ERP, three fears regularly disrupt the purchasing decision: acceptance by teams, fear of change and fear of complex deployment. Not convinced? Here are 3 great reasons to implement an ERP tailored to your service business.

A detailed analysis of your needs and of what the ERP systems you are comparing will allow you to better align your specific needs with the functionalities offered by the tools, and will ensure that you overcome these three difficulties inherent to such a change.

By following this guide, you'll be able to accurately evaluate each step of your processes, and ensure that you identify the best ERP for your service company. Let us guide you step by step.

 

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CONTENTS

Quick access : Benefits and steps

Contents

The advantages of an ERP for professional services companies

When an ERP system is implemented, all teams save time in their work:

- Employees find all their actions in the same tool. Depending on their rights, they can access their projects, time tracking, planning, expenses and absence management. In addition to the time saved by having everything on a single platform, the employee experience is also simplified.

- Support teams, finance teams and management perform their monitoring, validation and control tasks on a single platform. Notifications and tasks are centralized, which makes it possible to move forward more quickly

A service company that uses an ERP adapted to its business increases its performance visibility tenfold.

Precise knowledge of project margins. Anticipation of projects that are drifting away from their budgets. Visibility of utilization rate employees (time spent on billable projects).

The numerous indicators on the past and projected performance of the company allow to quickly improve the situation by knowing where the improvements are, and gaining anticipation in the decisions.

ERP in a service company connects all the teams and stakeholders involved in the projects on which the company is working. ERP is a central solution on which all players connect and share information. This connection enhances work efficiency and project quality.

Benefits

Step 1

Narrowing the field of possibilities

When you start your ERP search, make sure you identify solutions that are truly dedicated to your business. If you're a consulting firm, for example, make a specific search for an ERP dedicated to consulting firms. There are ERP solutions dedicated to every type of business, and it's not uncommon to find the ones that are best suited to your needs.

For this initial analysis, a thorough Internet search is all you need. There are software comparators, and above all Google, to help you identify the solutions most closely aligned with your needs.

Generally speaking, the ideal search should restrict the analysis to between 3 and 5 solutions. It's not necessarily very productive to search beyond this number, as chances are that the initial analysis will enable you to reduce the number.

Star

Step 2

Prepare your specifications to compare ERP systems

To make an infallible comparison and make the best choice, you can create a benchmark document to review all the topics that matter to your company. To make your job easier, we've listed the different topics you need to review, and the questions you can ask.

1. The main points to study on the functionalities

Team scheduling and resource planning

A good ERP must give you as much visibility on the past as on the forecast. Resource and planning management makes the difference between a basic ERP and an end-to-end solution that integrates the key process of resource planning and planning, which is at the heart of a service company.

It is important to check whether the ERP allows :

  • allocate employees to projects and businesses
  • to calculate load indicators such as staff activity rate, TACI, ...
  • facilitate profile searches based on skills and other criteria (experience, employee preferences, etc.)
  • view schedules and connect to employee calendars
  • calculate production, sales and project costs using load forecasts
  • to flag employees at risk of inter-contracting

Questions you can ask about this topic:

  • Is skills management integrated?
  • Can employee preferences be taken into account?
  • What indicators can help you better manage your workload?
  • Is it easy to assign employees to projects and tasks?
  • How can resource planning be scripted for projects that have not yet got off the ground?
Staffing

Project management and margin calculation

ERP must provide your company with complete visibility of business performance.

The following points should be checked:

  • Tracking of all costs (staff, subcontracting, purchases, expenses)
  • Sales calculation adapted to the type of invoicing (fixed-price, fee-based, subscription, etc.)
  • Calculation of margins to date and on completion of the project
  • Gap analysis between project production and invoicing
  • Analysis of variances in time spent on the project, on project tasks, by person

Questions you can ask about this topic:

  • How is sales recognition managed?
  • How are project margins calculated?
  • How is unbilled production recycled?
  • How are subcontracting costs tracked?
Project Management

Global and activity-based reporting

An ERP for a service company must provide all the indicators needed to improve business performance and facilitate decision-making.

Make sure that the following indicators are included in your reporting:

  • utilization rate, staff activity rate, TACI
  • Production in days and value
  • Sales and margins by project, by department, consolidated
  • Average Days Rate
  • Income statements
  • Cost analysis and invoicing of subcontractors
  • Analysis of time spent by activity type

You can ask the following questions:

  • How is time spent on billable projects calculated in relation to available time?
  • How do you add value to your production?
  • How does the solution differentiate between valued production and sales?
  • What reports do you provide to check that pricing is good?
Proactive Reporting

Project billing

Centralizing invoicing in the same tool as activity monitoring automates invoicing, makes data more reliable, and facilitates analysis of discrepancies between production and invoicing.

Important billing points to consider :

  • Ability to invoice projects on a fixed-price, time and materials, subscription basis, etc.
  • Mass e-mailing of invoices
  • Customize invoice templates
  • Follow-up on unpaid bills and automatic reminders
  • Sending billing data to accounting solutions

Questions you can ask :

  • How can billing be automated using available data?
  • How are unpaid bills handled?
  • How can I connect an e-mail address to the ERP to send invoices?
  • How are variances between planned, produced and invoiced analyzed?
  • How is billing data extracted and transferred?
Billing

Other useful functions

An ERP for professional services companies must centralize a maximum of functionalities to automate the tasks and to exploit the data as well as possible. It is necessary to check the capacities to manage the following functionalities:

  • Expense management and rebilling of billable expenses
  • Absence management with connection to HRIS software
  • General purchasing management
  • Subcontractor billing management

Questions to ask :

  • Are expenses managed via a mobile app with data recognition?
  • How are expenses rebilled?
  • How do you manage different types of absence?
  • Can you manage purchasing and supplier invoicing?
Fees

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2. Key points to consider in deployment

The success behind ERP implementation

The success of an ERP implementation for a service company lies in the ability of the deployment teams to bring about change. Knowledge of use cases and full mastery of the solution is one of the key success factors.

Key points to know :

  • Quality of support
  • Cost of support
  • Import management and historical data migration
  • Management of training courses for users, administrators, etc.
  • Customization and specific developments

Here are the questions to ask about ERP deployment and integration:

  • How is the solution deployed?
  • Are the integration teams internal or external to your teams?
  • What is the level of support, what is the time spent by the ERP publisher's teams, and by the customer's teams?
  • How does data recovery work?
  • How do you set up connectors with other software?
  • What training is provided before the go-live?
Deployment

3. Generic points about the company

Its safety policy

Finally, choosing an ERP for a professional services company also means choosing a vendor that must demonstrate its ability to maintain the ERP over time and provide the technologies necessary to continue to make it attractive. The ERP vendor must also prove its resilience, its compliance with personal data processing standards, and its actions in terms of cybersecurity.

Points to watch:

  • Hosting and localization of customer data
  • Rights and access management
  • RGPD policy and respect for personal data
  • Action to ensure security and prevent intrusion attempts

Questions to ask :

  • Where are your servers located?
  • What data is transferred outside your hosting sites and to which countries?
  • How do you ensure compliance with the RGPD?
  • What protective measures are in place, such as pentests and data encryption, to reinforce security?
Hosting

Step 3

Play the demos and fill in your file

With all these points, which you can also add to, you can create a specification, as well as a comparison file.

List all the points you feel are important to review during discussions with suppliers. In columns, list the different ERP suppliers you plan to analyze.

Complete the file as you go along, leaving comments to remind you of the answers you've given on the various topics.

You can apply a weighting scale to better rank the different ERP solution providers.

At the end of this work, you should be able to see clearly which solution is the best and most closely aligned with your needs.

Erp choice

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