How to Choose the Right Enterprise Resource Planning System for Your Company’s Needs

ERIC POY: Hello, and welcome to the Cherry Bekaert GovCon Podcast, where we discuss current Government Contracting trends, compliance matters, and best practices to guide federal contractors forward. My name is Eric Poy; I am a Managing Director with Cherry Bekaert.

With me today is Christine Doulous, a Senior Manager who leads our Unanet practice here at Cherry Bekaert and is part of the Government Contract Services Group. Christine, thanks for joining me today.

CHRISTINE DOULOUS: Thank you, Eric.

ERIC POY: Today, we are diving into ERP systems and discussing how growing companies going through periods of change should approach choosing a new ERP. What are some considerations for picking the right one?

Before we jump into that, would you like to give a quick background on yourself?

CHRISTINE DOULOUS: Absolutely. As you mentioned, I have been in the GovCon industry for more than two dozen years.

About six years ago, I decided to utilize my Accounting Information Systems degree and became Unanet certified. Now, I bring both my GovCon and Unanet expertise to growing companies to help them develop a foundation with a strong ERP system and provide any assistance they need as they grow.

ERIC POY: First off, "Go Hokies!" I know you are a fellow Hokie. You and I work with government contractors every day, and ERP and accounting systems are topics that always come up.

Clients often ask when they should migrate from QuickBooks to a new ERP. Alternatively, we hear from clients experiencing pain points with their current systems, such as an inability to get accurate reports.

What are some initial considerations a company should think about when jumping to a new ERP?

CHRISTINE DOULOUS: Great question. I always suggest looking through your current processes to see what is working well and what is not.

Identify your strengths and determine which manual tasks can be automated. As accountants, we are all comfortable with Excel spreadsheets, but that is not an efficient way to share information. We want to identify what can be automated.

You also want to ensure you involve all potential stakeholders of your current and future software system. This includes your executive team, contracts, operations, project managers, HR, and certainly accounting and finance.

Getting insight into their pain points is vital. They may also have knowledge about upcoming compliance requirements you will need to support in the future.

ERIC POY: When you talk about compliance, are you referring to HR, accounting, or GovCon compliance? Is there something in particular you are thinking of, or is it a bit of everything?

CHRISTINE DOULOUS: I really think it is everything. You definitely want to ensure the system has internal controls built-in. Regardless of your industry, you need to address specific compliances.

In GovCon, we have DCAA compliance, FAR, and CAS. Your system may also need to be compliant to pass a purchasing audit.

Your ERP system may not meet every single reporting requirement, but it should capture data so you can report on things like Workers' Comp, FMLA, or the Fair Labor Standards Act. The goal is to capture and report data in a way that meets all compliance requirements across your business.

ERIC POY: That is a good point because it involves a lot of "data in, data out." You have to understand the framework of what you need to do and how the system can get you there.

We have seen systems marketed toward government contractors that were deemed inadequate by the DCAA due to a lack of proper controls or features not being utilized fully.

You also mentioned the DOL piece and SCA reporting. If you have Davis-Bacon, FMLA, and PTO requirements, those need to integrate with ancillary systems like payroll, credit cards, and banking.

You need a solution that fits current needs but offers scalability for growth. Are there specific features or functions, like inventory or manufacturing, that companies should consider?

CHRISTINE DOULOUS: Absolutely. You should look at inventory, manufacturing, purchasing, forecasting, planning, and Earned Value Management.

Evaluate your current state and your future growth to see what the system needs to provide. Whether purchasing involves capturing subcontractor work or managing a full supply chain and inventory, you need to know what pieces are required.

I recommend having a "wish list" and preparing great questions for ERP vendors during demos.

ERIC POY: It sounds like buying a house where you have a wish list of "must-haves." When should a company start thinking about a new ERP system?

CHRISTINE DOULOUS: Many people come to us after experiencing significant growth when they feel it is finally time. However, I typically recommend performing a cost-benefit analysis sooner.

If a company is stable and anticipates growth through acquisition, new contract awards, or new operations, it is better to get on a new ERP system before that growth happens. This saves time and effort on data conversion and training.

It is best to scale up to a new ERP system before the growth so you can focus on bringing new projects and resources into an existing system.

You will know it is time based on pain points, such as frustration with reporting or a lack of self-service access for stakeholders. If your current accounting system does not allow for efficient processing, it is time to look at a new one.

ERIC POY: That is a great point. I am typically on the compliance and strategy side, focusing on forward-pricing. We help companies navigate the path from small to large.

Using your systems as a springboard helps with that growth. You never want to be rushing to implement an ERP system after winning a multi-million dollar Cost Plus contract that has an international presence.

Trying to fix QuickBooks while migrating to Deltek or Unanet during a period of heavy invoicing and new reporting requirements is like building the airplane while you fly it.

While companies worry about the initial cash outlay, an ERP system provides the ability to springboard into that growth. From a data perspective, do you have tips for migrating data to a new ERP?

CHRISTINE DOULOUS: I recommend reviewing how clean your data is. We have clients who know certain areas haven't been reconciled or that the project ledger does not tie to the general ledger.

You should take time for data remediation to get that cleaned up. If you have historic data that you don't need timely access to, you can bring it in as a lump sum for the prior year and then bring in active transactions for the current year.

Be transparent with your teammates about what is not accurate so you do not bring unreconciled data into a new system.

ERIC POY: If a company is inviting ERP providers like Deltek, Unanet, or NetSuite for a demo, do you have advice on how to prepare?

CHRISTINE DOULOUS: Bring that wish list. Meet with your stakeholders, know your pain points, and identify manual processes you want to automate.

Understand what visibility and improved reporting you need. Features can be implemented in a phased approach—perhaps starting with project management and finance, then adding purchasing later.

Ensure you ask questions unique to your entity rather than just watching a generic demo.

ERIC POY: I would add that you should ask the companies providing the demos who their trusted partners are. Do they use "bolt-ons" for payroll or inventory management?

Identify other potential vendors, like bill.com, that you might need to bring on.

CHRISTINE DOULOUS: One last thing: once the ERP is implemented, how will you define success?

Knowing your key success factors will lead to great questions about both where you are currently and where you are headed.

ERIC POY: That is a very good point. We are at time for today. Christine, thank you for joining me on the podcast to discuss how to select the right ERP.

If anyone listening has questions about ERP selection, Deltek, Unanet, or ERP systems in general, please feel free to reach out to Christine, myself, or the GovCon Consulting team here at Cherry Bekaert.

We are happy to be a resource. Christine, thank you.

CHRISTINE DOULOUS: Thank you, Eric. Talk to you soon.