To address the complex challenges of the cannabis industry, leading cultivators and processors turn to Enterprise Resource Planning (ERP) software to streamline operations, improve efficiency and manage growth.
But deciding when to implement a new ERP system can be complicated. And once you’ve made the decision that your company is ready for integrated software, choosing a solution can be extremely overwhelming. To help, we’ve put together a list of our cannabis customers’ most frequently asked questions to help you better prepare for the ERP selection and implementation process.
1. What are the benefits of ERP software?
Before diving into the benefits of ERP software, it’s imperative we explain what it is. According to Investopedia:
Enterprise resource planning (ERP) is a platform companies use to manage and integrate the essential parts of their businesses. Many ERP software applications are critical to companies because they help them implement resource planning by integrating all the processes needed to run their companies with a single system.
Cannabis business software is industry-specific ERP software. It’s designed to manage all areas of a cannabis processing and cultivating business, from finance, operations and seed-to-sale to compliance, quality and traceability. When you find and implement the right ERP software, you’ll be able to:
- Track key metrics, such as strain, costs and labor
- Better understand which product lines are most profitable
- Adhere to regulations and support EU GMP standards and US state/Health Canada reporting
- Manage plant scheduling, production and processing with full traceability and real-time access to operational and financial insights
- Adhere to recall management regulations with functionality that allows you to search for products and lots associated with recalled material
- Use accurate inventory data to make better, faster decisions about your business
2. Why is industry-specific ERP software superior to generic ERP software?
To perform at its full potential, your company needs a solution developed and implemented by experts who thoroughly understand your challenges and needs. Compared to generic ERP solutions that require extensive customization to address the seed-to-sale, compliance, quality, costing and item tracing challenges inherent to the cannabis industry, a cannabis-specific ERP will come equipped with the exact tools you need to ensure success.
For example, FIGR™—a locally owned cannabis enterprise located in Charlottetown, Prince Edward Island—was hunting for a comprehensive ERP solution. After reviewing several ERP options, CannaBusiness ERP, built in Sage X3 and configured by NexTec Group experts, won their trust and business. CannaBusiness ERP’s specific functionality ensures that FIGR can provide a fully traceable, compliant and quality product.
“I expect to save an enormous amount of time producing monthly reports for our board and other stakeholders,” FIGR CFO Kyle Smith says. “We can look at our business in different ways almost instantly and without any additional effort. For example, I can look at sales by strain, by product line, by region and more. Previously, I needed to export the data into Excel and create pivot tables.”– Kyle Smith, FIGR™ CFO
3. Is my company ready for an ERP solution?
As your business grows, your business management solution should provide you with the features and functionality needed to continue your success, not hinder it. Following are a few clear indicators that replacing your current software is a must:
- Lack of scalability: Systems that don’t grow alongside your cannabis company without incurring additional costs and complications can severely limit potential.
- No integration: Software that doesn’t integrate with other mission-critical business systems can create unreliable data and limit your insights.
- Manual processes: If your team spends more time on manual tasks and workarounds than on actual production, you’re wallowing in inefficiency and may be losing money in the process.
With a new software system, you should anticipate notable gains in efficiency, productivity, growth and cost savings. Check out this blog post for a full list of signs it’s time to replace your current solution.
4. How is an ERP solution implemented?
An ERP is typically implemented on-premises or via the cloud. There are advantages and disadvantages to both, and it depends on your company’s unique requirements. At CannaBusiness ERP, we typically recommend a cloud deployment because of its flexibility, security and easy accessibility via the internet.
Though on-premises deployments can be successful, and some businesses prefer to have more direct access to—and control of—their hardware and software, on-premises deployments require time-consuming and expensive hardware installations. They also need the assistance of a qualified and often full-time IT department to manage updates, ensure security and provide general maintenance.
With cloud-based software, you and your team can rely on your ERP vendor to provide all of the above. Plus, you’ll benefit from anytime, anywhere access to your vital business data using any web-enabled device.
5. Which departments are involved in an ERP implementation?
An ERP solution is designed to integrate all aspects of your business, so every department and team member will be affected. With the right cannabis ERP, your business and every stakeholder can utilize company-wide data that feeds into the ERP software, enhancing communication and collaboration and improving decision making.
6. Will ERP software training be required for staff?
Adopting a new ERP solution is a major organizational change and affects every person in the business, from the production floor or grow room to the C-suite. Training will be imperative, but keep in mind that the training—and how much it costs—varies depending on the ERP solution you choose.
Learning how to properly use your new ERP system and understanding its many benefits will go a long way to ensuring your staff will use it, thus ensuring that your investment into cannabis ERP is well worth it.
7. What will the ROI of our ERP investment be?
Return on Investment or ROI is a metric used to determine if an investment has been profitable or not. Determining an ERP ROI is challenging, but below are some of the returns you can expect when implementing a cannabis ERP:
- Increased Visibility – When you have real-time, end-to-end visibility into your operations, you can make better, faster decisions that maximize productivity and profitability.
- Reduced Bottlenecks – Because an ERP solution automates processes and increases overall efficiencies, you’ll have the ability to meet production goals.
- Automated Workflows – When all departments work from the same solution, you can guarantee more fluid workflows between departments, creating more cost-effective processes, better data, and greater efficiency.
Taken together, these returns translate into major time-and-cost savings, which will ultimately boost your bottom line.
8. How should we prepare for an ERP implementation?
Most ERP implementations are completed in stages and are based on a defined plan that is created with the help of your ERP partner prior to beginning the implementation. However, there are three things that must happen before you move forward:
- Assemble a project team – These team members must have a solid knowledge of the features, functions and requirements that are essential to the success of your cannabis processing and cultivation company.
- Conduct a business process review – This is the time to identify areas that would benefit from a connected business management system.
- Select the right solution – Based on your company’s specific requirements and processes, choose an ERP system that is best for you.
9. What will be required of our staff/company?
As discussed, choosing a new ERP solution and implementing it is a whole-company endeavor. Getting staff support for the project requires effective communication, from before the selection process commences through the momentous go-live event. Your team members should be informed of why you’re making this decision, how it will unfold and how long the implementation is slated to take.
Along with proper training as supplied by the ERP vendor, you’ll want to consider putting low-priority projects on hold, so your staff has time to focus on the ERP implementation and to learn the new software.
10. What should we expect from our ERP reseller?
An ERP system is only as good as the people behind the product. To get the most from your software, it’s critical to have an experienced and reliable team working alongside you. Look for an ERP partner that has deep industry expertise, decades of experience and dedicated teams who work alongside you to help your business grow.
CannaBusiness ERP experts continue to create new IP and features to reflect industry changes. For example, CannaBusiness ERP 2022 R4 release delivers our users regulatory enhancements, Canadian retain functionality, an enhanced fertigation process and sophisticated forecasting and planning capabilities.
CannaBusiness ERP is built in Sage X3 and configured by NexTec industry experts to deliver a complete cannabis business solution. That means customers get the stability and reliability of a top ERP vendor and the deep knowledge and experience of cannabis processing and cultivation experts.
After choosing our cannabis business management software, Smith from FIGR says, “We didn’t have to explain how we operate, what compliance mandates we face or which workflows are critical—they understood.” He adds, “We’ve got the right application in place with CannaBusiness ERP and the right technology partner to keep us going and growing.”
We can do the same for you and your cannabis business. Contact our team today. We’d love to chat.– Kyle Smith, FIGR™ CFO