Five Reasons to Think Outside the ERP in 2020

Does this scenario sound common? Your company has been growing, and things are getting ever more complex. Your employees are wrangling multiple systems to complete everyday tasks. Whether they’re in the back office or the field, everyone is struggling to access reliable, timely data on what’s happening in the business. Your finance people are burdened by accounting and financial reporting that’s become far too cumbersome and labor-intensive. And your poor field inventory management folks are overwhelmed with the daily scramble needed to keep track of inventory coming and going—as well as tabs on what is in the field.


That’s when leadership starts discussing the purchase of an Enterprise Resource Planning (ERP) system. Why? Because that’s what companies do when they mature—at least according to investors, stakeholders, and (sometimes) leadership. After all, it’s going to make things easier, right?


Not necessarily. Unfortunately, ERP systems are not designed with the unique complexities of the orthopedic implant industry in mind. That means that, while they offer benefits, they’re likely to also involve implementations that drag on and on and cost more than you anticipate through extensive customization. Even then, they can fail to deliver solutions to your business needs.


Let’s take a closer look at five common problems to see why it’s savvy to think outside the ERP as you set your 2020 budgeting and business priorities.


#1: ERPs are expensive to buy and maintain.

On average, the cost of software and services associated with ERP implementation ranges from $150,000 to $750,000. That’s just to get started. Annual software maintenance costs usually hover around 20% of initial license fees, but the total cost of ownership (TCO) must also take into account the productivity cost of downtime, training, and other focus diverted from your core functions. In addition, TCO needs to factor in the additional cost of retaining consultants, sometimes indefinitely, to create and enhance workflows and reporting in your ERP.


#2: ERPs don’t always support your business needs

Unlike many products managed in ERP systems, orthopedic implants and instruments are contained in bins and trays. They must be tracked as individual items, but they also contain items that could be sold and then replenished. ERP systems are not designed to support this arrangement.


#3: ERP implementations can be lengthy and painful

ERP systems are difficult and expensive to customize. That’s why implementation can drag on for a year—or more. When implementation takes longer than expected, costs more than anticipated, and fails to deliver at least half the desired business benefits, it’s considered a failure.


#4: ERPs can fail the field

ERPs can fall short when it comes to features that fulfill the needs of your field. Consider that your reps are on the go all the time. Don’t overlook the importance of mobile functionality in favor of warehouse and supply chain operations. The best solution digitally connects the entire chain from manufacturer to customer.


#5: ERPs can be inflexible and difficult to integrate

Customizing and configuring an ERP to meet the needs of your business is an ongoing challenge, especially given the evolving and disrupted nature of the med device business in general and orthopedics in particular. In addition, ERPs can be very difficult to integrate with external systems, meaning that your problems with system fragmentation can continue despite this massive new investment. That’s a serious consideration, especially when you ponder the changes and pressures new regulations such as UDI compliance will bring, and the functionality needed to address them.


Asking the right questions

Because of the level of customization needed to meet the needs of your specific and highly complex business, an ERP may be overkill. That’s why it’s important to consider the answers to key questions such as:

  • Why pay for functionality you don’t need and then spend more to customize?
  • Why overlook the specific functionality your business most needs?
  • Why choose a system that is difficult to integrate with external systems—and hamper your agility?


Choosing a system to grow with you

Maturity doesn’t have to automatically involve an ERP system. Without naming names (because we’d give you the same privacy), we can point to several manufacturers with $10 to $50 million in annual revenue that are running their entire businesses on the ImplantBase platform and their accounting software alone.


That’s because ImplantBase gives you a modular approach to changing the way you do business for the better. As the industry-specific all-in-one software platform for your sales operations, inventory management, supply chain, and finance functions, ImplantBase is designed to wrap around your business—no matter how you do business. We’ve developed a system that’s flexible in module use, pricing, and system integration, so you can choose how you roll it out. Best of all, most implementations are a fraction of the cost of an ERP.


Before you spend $500,000 or more on a system that wasn’t designed for you and will consume years of effort, shouldn’t you take 30 minutes to talk with one of our experts? Be sure to ask us about our 30+ integrations and our 100% success rate.

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