The introduction of the National Disability Insurance Scheme (NDIS) is seeing an interest in ERP (Enterprise Resource Planning) systems by organisations looking to consolidate their Finance, Client Management and HR process into a single point. However, given the variety and complexity within the disability sector – the question needs to be asked:
“Are ERP systems fit for purpose?”
“Building” a Better System
In looking to an ERP solution, organisations are endeavouring to achieve multiple outcomes:
- Consolidate their systems
- Eliminate double handling of data
- Bring about operational efficiencies
Expectations are that by merging it all, it will make things more efficient. In principle this is a worthy ideal but in reality the end result is not always representative of the initial intent.
While ERP systems have been able to deliver integration and powerful data management, there are many cases where organisations have purchased products designed well above their operational intentions.
Originating from the MRP (Materials Resource Planning) concept introduced in the 90’s, ERP systems started gaining momentum after Y2K forced organisations to re-evaluate their legacy systems and take a more consolidated approach to managing their ICT processes. With a large majority of systems being built around inventory and product management, ERP systems became firmly entrenched in the manufacturing sector.
Manufacturing vs Disability Services Provision
The need to manage and consolidate business processes has many in the NFP sector look to ERPs for solutions. Calxa understands the reporting needs of Nor for Profit organisations and bundles 7 Handy Reports for Not-for-Profits. In some cases, these systems, given their size and large activity base have worked, however, it would also seem that many providers have purchased large and costly ERP systems based on expectation of growth and expansion. Many it would seem, without considering the options available.
While it is true that ERPs offer a single consolidated point of data processing, there are some considerations.
- The sector is presently undertaking huge change and “systems” need to be able to be adapted to react to the ongoing infrastructure changes (i.e. NDIA portal).
- NDIS puts the decision making power in the hands of the end user, the participant – uncertainty of market share.
- Small providers have the advantage of being ‘fluid’ in their operating culture and can be adaptable to changing local environments.
Moving to an ERP system involves high levels of implementation, resourcing and training. In some cases, such a commitment is not always possible as constant changes and adaptions required to service emerging markets can lead to excessive ongoing costs and implementation fees. That includes the expense associated with recruitment and training of new finance staff. With a reduced pool to select the candidate with the right skill set from, the onboarding of new staff is likely to involve a specialist training program.
What are the Options?
Traditionally, systems management generally revolves around extracting information manually from separate processes using spreadsheets and converting into consolidated reports which are then evaluated at board level. A slow and inefficient process which can slow or even inhibit growth.
ERP systems do attend to this problem. However, modern development of job specific software packages now sees the ability for smaller organisations to develop integrated platforms based on function specific programs. While offering much the same functionality as the bigger ERP systems, these ‘suite-based’ products can expand as companies grow, utilising powerful processing ability and integrating directly with reporting software all at a much reduced financial commitment. To start off identify the origin and behaviour of your data:
- What do you need to capture?
- Employee time spend with clients for payroll
- Number of activities/services
- Client details
- Which system captures this data?
- Client Management
- How does the data flow?
- Where does it start?
- Identify the flow to and from the various stakeholders
- Customer experience
- Case/Program Managers’ needs
- Management/Board reporting
- Compliance such as ATO / ACNC / NDIA
The Right Fit
As funding moves further from its traditional roots, NFPs need to be mindful of their IT decisions. It is important to accurately evaluate strategic capabilities and focus on future position. The decision to jump straight into an ERP system “because everyone else is doing it” should be tempered with good research and quality information. The old adage “look before you leap” has never been so true.
If you are looking for a bit more perspective regarding your IT direction – check out this blog article What Makes a Good CMS.