What is Enterprise Resource Planning?

Public and private sector organizations are on the brink of entering a new era of digitalization. Every day, companies are getting rid of laborious, analog processes in favor of faster, more efficient digital solutions. Enterprise resource planning (ERP) is a prime example of digital transformation. While it may originally have been associated with the private sector, ERP is now moving into the public realm, too.

What is Enterprise Resource Planning?

Enterprise resource planning – or ERP – refers to a process organizations use to integrate and manage every part of their business from one single place. Because most businesses and other organizations would use software or platform-based solutions to enable the process, ERP has become synonymous with ERP software.

ERP solutions help integrate planning processes, finance departments, human resources, purchasing, sales, marketing, and other business functions. Over the past few years, many of these solutions have evolved from software packages that organizations bought on CDs to web-based applications. Most of those applications can be accessed remotely, allowing for more flexible working patterns and easier updates and adjustments.

According to Investopedia, a great way of thinking about ERP solutions is to imagine them as the glue that holds together the individual parts of an organization. A well-designed ERP simplifies communication between different departments and increases transparency across the entire organization. As a result, employees of businesses and municipalities can access information at one single source, allowing for faster, more accurate reporting.

But the benefits of ERP extend to customers and citizens, too. Because employees have easy access to more complete information, they are better able to deal with inquiries and provide answers in a timely manner.

Imagine the opposite of an ERP: in this scenario, each department has its own optimized software system, but there is no connection between the individual parts. The department in question may be running very smoothly, but others find it hard to communicate with that department when they need to.

Leading ERP solutions integrate individual department requirements and tasks while also enabling access to those specific systems through one single interface. Put simply, whatever you need, you can find it in one place.

ERP systems work best when they are implemented carefully, following a well-thought-out strategy. One of the most important aspects of implementation is securing employee buy-in at all levels.

Why do Municipalities Need ERP?

As the coronavirus pandemic started spreading two and a half years ago, both sectors needed to adapt their way of working.

Outdated, paper-based processes were simply no longer viable as employees needed remote access to data and information. The public sector needed to catch up with private companies and start integrating communications and proceedings through software-based solutions. Not all municipalities were ready for this change and had to adapt quickly. In some cases, the demands of remote working simply removed the choice between paper or hard copy and online solutions for town councils and other institutions.

The pandemic accelerated a transformation that for some had been long overdue. Even without the acceleration of the past two years, it was clear that government bodies needed to implement ERP software and systems for several reasons:

  • Improved transparency and efficiency: digital technology makes it easy to streamline processes and partially automate them. That means employees can concentrate on those parts of their jobs that require human input without wasting time completing mundane tasks. Citizens and clients benefit by being able to file applications for planning permission and completing other tasks more easily.
  • Easier citizen engagement: municipalities can seem remote to their citizens, and it is easy for processes and regulations to appear complicated. By basing these proceedings on ERP software, they become far more accessible. ERP also enables municipalities to create citizen gateways, allowing residents to provide input into various procedures. The result is a more citizen-friendly, approachable municipality.
  • Making data-driven decisions: leading private sector organizations base their business strategy on data rather than assumptions. They also use data to check whether their strategies are working well and having the desired effects. Forward-thinking municipalities can utilize their ERP in the same manner. For example, most municipalities will have to consider roadworks and maintenance on an annual basis. Rather than closing roads randomly, they can use data from CCTV cameras or traffic lights to choose times that cause the least amount of inconvenience.
  • Improving collaboration and communication: ERP systems can also be highly beneficial when it comes to simplifying collaboration between departments. Gone are the days when sending emails with countless recipients on copy or blind copy was the best way to communicate between different departments. Sharing information in a central place, like an ERP dashboard has become best practice in the private and public sectors alike. This type of sharing makes it easy for all interested parties to contribute and work together. Plus, it avoids information being lost in a barrage of emails.
  • Growing outside investment and private sector partnerships: while municipal governments carry a lot of responsibility for the upkeep of their community, sometimes they need support from private sector partners. Attracting these investments is easier for municipalities that can show their needs and requirements are backed up by data. This approach will appeal to investors who would look for the same type of information to support a private project.

How Can the Digital Transformation Change Municipalities?

Municipalities simply cannot afford to “sit out” the digital transformation that is affecting every aspect of our daily lives. Taking a proactive approach now by transitioning to a suitable enterprise resource planning system allows cities and smaller towns to lay the foundations for a community-friendly future.

Embracing their digital transformation and implementing ERP now also benefits government employees. With the right training, staff will be able to complete their work more efficiently and collaborate more effectively. Teams in one department will no longer be held back by an inability to access another department’s information and data.

Municipal governments will also find that ERPs can make decision-making easier across multiple functions. Consider the allocation of municipal funds, for example. In most communities, demands on limited budgets are ever-increasing, making it harder for city governments to allocate funds fairly. Using data generated by ERP software puts the process on a better basis.

Municipalities will be able to see where their funds have the greatest impact or where most support is needed. Data-based decision-making benefits both communities and their employees.

How Can Government Bodies Prepare for ERP?

Preparation is the key to successful ERP solution implementation. Government bodies such as municipalities need to ensure they dedicate an appropriate amount of time and resources to the project.

Getting ready for ERP implementation starts with defining the scope of the project. While many municipalities require similar functionality from their ERP software, including planning, land use, and construction permitting, as well as licensing and code enforcement, each municipality is different. The differences begin with the size of your city or town, and geographic location also influences ERP requirements.

Mapping these requirements out in detail is critical. Unless they are clear and sufficiently detailed, a software provider cannot meet your needs. To avoid missing crucial parts, every department needs to have a chance to add their input and any specific requirements.

Next on the list is ensuring that each department is truly on-board with the organization’s or municipality’s transition. Moving from a paper-based system to a digital solution will require some time, and employees will need to adapt. Highlighting ERP benefits for employees and citizens can help overcome potential initial resistance.

Common Goals of ERP Implementation

Some of the more common goals for ERP system implementation include:

  • Serving citizens better through easier access to information and quicker resolution of any difficulties
  • Streamlining internal processes and enabling different departments to work together more easily
  • Gaining access to meaningful data, which simplifies reporting processes and helps with budget calculations and more
  • Cost savings and more efficient use of staff time

Benefits of an Implementation Roadmap

Municipalities will see some of the benefits of an ERP solution quickly, while others take some time to become obvious. The key to long-term success is to plan for full implementation. That means allowing time for a transitional period, during which employees and citizens have access to both the traditional analog and the new digital system.

Municipalities also need to allow for training to ensure every staff member fully understands how to use any new system. Training sessions are a great way of overcoming internal resistance to ERP implementation. These sessions allow employees to discover government ERP benefits gradually and without the pressure of having to adapt to a new system without prior warning.

Setting out the individual steps of the implementation in a roadmap works well and allows all stakeholders to track progress. With many ERP solutions, government bodies can choose between one big transition or adding ERP elements gradually to allow for additional familiarization time. No matter which option they choose, comparing the roadmap with the actual implementation creates a clear picture of how the organization is changing.

How to Choose the Right ERP for Your Community

Assuming a government body or municipality has prepared its transition and defined goals, it is time to search for the most suitable ERP for the community. So, how can you select the right system and the right supplier?

Start by comparing the community’s requirements to the product options to see if they match. If there are major discrepancies, the ERP software under consideration is unlikely to be the best solution.

Once you have narrowed your selection to a few suppliers, it is time to talk in more detail than the information a product website can supply. At this stage, a reputable ERP provider will ask a lot of questions before pushing a product. The reason is simple: most ERP suppliers can customize their software to individual needs. However, without spending time to find out what exactly your organization wants to achieve by implementing an ERP, the supplier is most likely just recommending a standard product.

Just to be clear – a standard product is not necessarily a bad solution. Municipalities’ requirements can overlap significantly, which is why a degree of standardization is only normal. At the same time, flexibility and adaptability are equally normal characteristics of high-quality ERPs.

Talk to potential suppliers about an ERP implementation schedule. With products like Mitchell Humphrey’s FastTrackGov® (FTG), customers can choose between transforming their municipality step-by-step, for example by department, or implementing the entire system at once, including financial management applications. Neither option is better or worse. It is simply a case of choosing the option that suits you best.

Ask potential suppliers to give you an in-depth demonstration to help you get a feel for the product.

Lastly, check the supplier’s track record. Granted, there is a real buzz about technology startups and their innovative solutions. But when your municipality is considering a large transition, it pays to check the supplier’s experience level and track record in dealing with similar clients. An ERP that works well in the private sector is not necessarily a great option for the public sector. Choosing a supplier that understands the specific requirements can help prevent problems later on.

Final Thoughts

Committing to the digital transition of a municipality or other government body can seem like a daunting prospect, but a well-developed ERP can transform the way your municipality and the community interact. Employees, citizens, and other stakeholders benefit from smoother processes and more transparent access to information.  With the right ERP supplier, it is easy to define the scope of the software solution needed and develop a path for its implementation.

Mitchell Humphrey & Co. has been supporting public sector organizations with secure, integrated software solutions for decades. They have built a track record in the industry without taking their finger off the pulse. To learn more about FastTrackGov® and how it can transform your community, get in touch today for additional information or to schedule a demo.