How to Navigate ERP Adoption

ERP systems have been around for years, promising efficiency and streamlined operations. Yet, for companies grappling with complex supply chains, the idea of adopting an ERP can feel overwhelming.

And that got me thinking.

If ERPs are supposed to make things simpler, why does the transition seem so daunting for so many companies?

This Q&A isn’t just about ERPs as a concept. It’s about what really matters for companies considering ERP adoption: why ERPs remain finance-first, and what companies should think about to make sure their investment actually supports their operations.

Because when you think about it, an ERP has the potential to go beyond organizing financials. It can:

• Connect teams, 

• Bridge critical systems, and 

• Provide a unified view across all operations. 

However, achieving this isn’t as simple as flipping a switch. Especially for companies transitioning from spreadsheets, implementing an ERP requires careful planning to align it with both financial and operational goals.

So I wanted to dig into this deeper. I wanted to understand the hidden pitfalls and real opportunities in ERP adoption, particularly for companies where visibility and agility are critical. 

And I wanted to hear from someone who’s been through it all.

That’s why I reached out to Grant Sernick, Head of Sales and Marketing at 3rdwave. With extensive experience in ERP technology, Grant has helped numerous companies make sense of ERP adoption in the real world. 

Table of Contents

1. The Financial Focus of ERPs

2. Defining the Ideal ERP for Supply Chains

3. Integrating TMS and WMS with ERPs

4. Advice for Companies Adopting ERP

5. Future of ERPs with Emerging Tech

This conversation has been edited for length and clarity. If you're short on time, skip to the TL;DR section for the key takeaways.

1. The Financial Focus of ERPs

Why are ERPs finance-first instead of product-focused?

Grant Sernick: ERPs were initially developed to streamline financial management within businesses. The core idea stems from traditional business principles, where every company—regardless of industry—relies on foundational financial documents like income statements, balance sheets, and cash flow statements to gauge health and performance. Financial elements are the common denominator for all businesses, from service providers to manufacturers, making finance the logical anchor for ERP systems. 

ERPs are structured around the general ledger to capture every significant financial transaction. This focus allows companies to consolidate data for tax compliance, regulation, and reporting, ensuring that they have a clear financial snapshot for quarterly or annual periods. So, while ERPs offer broad organizational support, finance remains the central priority.

So, were ERPs mainly sold to finance teams?

Grant Sernick: Yes, the primary buyers were, and often still are, CFOs or CEOs, since ERPs represent significant investment and financial control. While marketed as “enterprise-wide” tools, their implementation often revolves around financial management. 

In practice, companies tend to adopt one of two approaches. Some prioritize operational needs and integrate ERPs in ways that truly support their business drivers, whether financial or product-related. For example, a food importer operating on thin margins needs an ERP that can manage transactions and allocate costs with precision, as even a slight error could affect profitability. On the other end, companies with high margins might not require the same precision, as minor financial variances won’t impact their bottom line as drastically.

2. Defining the Ideal ERP for Supply Chains

How would you define an ideal ERP for supply chain needs?

Grant Sernick: Based on my years at 3rdwave, I believe ERPs should prioritize real-world operations, with finance as a supporting dimension. When a company buys 100 widgets, the primary transaction is physical—the movement of those items from a vendor to a warehouse. The financial elements, like purchase orders and invoices, represent this physical flow but are secondary in nature.

Currently, ERPs track financial documents—purchase orders, invoices, warehouse receipts—without delving into the physical state of inventory. This creates a gap, as ERPs lack the tools to monitor what’s happening with the actual items in transit, especially across complex international supply chains. Consider a shipment from a factory in Shanghai to a U.S. warehouse. The ERP may capture the initial purchase order and the final warehouse receipt but overlooks every step in between, like manufacturing, port handling, shipping, customs, and trucking. Each of these steps has cost and timing implications, yet ERPs rarely account for them, leading to visibility challenges and misalignment in supply chains.

When you mention “meta information,” what does that include?

Grant Sernick: Meta information covers all the historical and forward-looking data tied to a product’s journey. It’s not just a widget in inventory but a record of events—manufacturing details, transport status, costs—that impact its lifecycle. For instance, a product might be in a warehouse, ready for distribution, but if there’s no data on its handling history or current location, it’s difficult to manage downstream processes accurately.

In the international supply chain, where a product may pass through multiple hands, the ERP typically only registers a purchase order at the start and a warehouse receipt at the end. But between these points, the product has gone through manufacturing, port handling, ocean freight, customs clearance, inland transportation, and more. Each stage influences costs and affects product availability, yet these details are usually missing from the ERP.

3. Integrating TMS and WMS with ERPs

How do TMS and WMS systems fit into this?

Grant Sernick: WMS, or Warehouse Management Systems, are designed to handle inventory within the warehouse—receiving, locating, and moving stock. It’s product-focused but operates only within warehouse walls, managing inbound inventory receipts, storage, and outbound shipments. 

TMS, or Transportation Management Systems, coordinate shipment logistics, whether domestic or international. Domestic TMS handles trucking and route optimization within a country, while international TMS oversees complex, multi-leg journeys involving ocean or air transport. International shipments, for instance, need to clear customs, involve multiple transport modes, and often rely on freight forwarders for coordination.

The core challenge here is that TMS focuses on shipments, not individual products, while WMS is contained to the warehouse and ERPs manage only financial transactions. With each system built around a different “unit of record,” it’s difficult for companies to have a unified view of products in transit. TMS can tell you where a container is, but it doesn’t track individual products, creating a disconnect that complicates visibility across the supply chain.

So, what’s needed to bridge this visibility gap?

Grant Sernick: Bridging the gap requires a system that integrates the ERP’s financial data, the WMS’s product data, and the TMS’s logistics data into one cohesive view. At 3rdwave, we designed our software to fill this need by serving as a “sidecar” to the ERP. Our system allows companies to manage orders, track international shipments from booking to receipt, inform the warehouse about incoming inventory, and reconcile with the ERP’s general ledger.

Many players in an international supply chain operate outside the company, from vendors to customs brokers, so 3rdwave enables seamless data exchange across this network. We consolidate and validate data from different sources, making it easier to plan, monitor, and respond to developments throughout the supply chain.

Some companies struggle to get vendors on the same ERP system. How does 3rdwave approach that?

Grant Sernick: That’s a common challenge. 3rdwave is built to work with various data formats, without requiring outside partners to adopt new systems. We can interface with freight forwarders, vendors, and customers’ ERPs, taking in data from each in whatever form they can provide. For example, freight forwarders typically send us packing lists and shipping notes in regular data feeds. 

For vendors, we accept data from their systems or even basic CSV dumps, creating a centralized, validated record in 3rdwave. This approach allows our customers to achieve full visibility into their supply chains without forcing partners to change their technology, which is often unrealistic for complex networks.

4. Advice for Companies Adopting ERP

What advice would you give a company currently using Excel but considering an ERP?

Grant Sernick: If you're currently using spreadsheets, you're actually at a valuable starting point. Spreadsheets may seem inexpensive—Google Sheets or Excel are often free tools—but the real cost comes from the hours required to manage them. If you’re organizing your business solely through spreadsheets, there’s an inherent optimization taking place. You’re unconsciously deciding which areas are essential to track and which aren’t worth the time to manage.

The first step is to identify which spreadsheets cover your core business needs. However, not all of these will be suitable for an ERP. One common mistake is trying to move everything into the ERP, including non-essential or overly specific processes. It’s crucial to filter out functions that don’t belong in an ERP to avoid unnecessary complications and costs.

For instance, we worked with a wine importer who used spreadsheets to file their own customs entries—a complex process involving data transformation to meet customs requirements. They assumed their ERP, Microsoft Business Central, could handle this task as part of the setup. But while the ERP managed 90% of their functions well, it failed when handling customs, costing them significant time and money. If they had known to separate tasks that weren’t native to the ERP, they could have found a specialized solution—like 3rdwave—better suited to that role. Segmenting tasks this way will save you from customizing the ERP unnecessarily and keep operations smooth.

What does a typical ERP implementation process look like?

Grant Sernick: Implementing an ERP is a substantial endeavor, often taking 10 to 18 months, sometimes even longer, depending on the complexity of the business. What many companies underestimate is that an ERP locks in business processes, creating a structured, often rigid framework. This means each business process must be understood, documented, and aligned with the ERP’s capabilities.

Companies might identify several processes—like order-to-cash, procure-to-pay, or manufacturing workflows—that they need the ERP to handle. But there’s often an overlooked “case D,” or unanticipated scenario, which disrupts things if not accounted for. With hundreds of processes to document, any missed cases lead to gaps in the system, requiring manual workarounds and causing inefficiencies.

Most companies only implement ERP systems once or twice in their lifecycle, so they lack experience in this complex process. The role of a qualified implementer is critical—they should understand your business thoroughly, push for clear documentation, and prevent unnecessary complexity in the setup. Large firms like KPMG may bring experience but often rely on junior team members, which can add another layer of challenge.

Moreover, confusion over which tasks should be in the ERP and which should remain outside leads to complications. We often see companies trying to make their ERP handle logistics or compliance functions it wasn’t designed for. When 3rdwave integrates with such ERPs, companies find relief in removing these burdensome add-ons, streamlining operations with tools purpose-built for specific supply chain tasks, like international shipments.

5. Future of ERPs with Emerging Technologies

Many companies, like my own manufacturing business in the past, stayed on Excel because an ERP implementation feels overwhelming. How do you see emerging technologies, especially AI, impacting ERP design in the future?

Grant Sernick: There’s a lot of speculation around AI in ERP, but I think it’s important to be realistic. AI is excellent at recognizing patterns, provided there’s a well-organized, high-quality data set. This is key—AI’s effectiveness depends on having defined, controlled processes to analyze. In ERP, AI could be useful for tasks like demand sensing, analyzing shifts in sales orders, or identifying patterns in customer demand that might be hard for humans to detect.

However, AI is not a magic fix for every gap in ERP systems, especially where there’s disjointed data or processes. For example, bridging the gap between ERP and supply chain management through AI is complex, as ERPs often lack the foundational data to support it. Without structured data, AI simply can’t deliver meaningful insights. Many claims about AI “fixing” ERP limitations are overhyped; unless there’s clarity on how AI will specifically solve a problem, it’s best to be skeptical.

Looking forward, AI will likely become embedded within ERP applications as a support tool, rather than a standalone solution. Just as databases quietly power ERPs, AI will work behind the scenes to enhance specific functions. For instance, you might use AI to quickly answer specific questions or detect anomalies, but it won’t revolutionize the ERP architecture itself. So, while AI will be helpful, expecting it to transform ERP operations fundamentally is probably unrealistic.

TL;DR - Key Takeaways from Grant Sernick

1. ERPs are Finance-Centered: ERPs were initially created to manage financial transactions, a common need for all businesses. This financial focus made them especially relevant to CFOs and finance teams.

2. Operational Needs Can be Secondary: Some companies adapt their ERP to operational needs, but most implementations remain finance-first due to the high costs and leadership decisions driven by CFOs.

3. Supply Chains Require Granular Data: Effective supply chain management needs visibility into physical inventory data (“meta information”) like product history, transport status, and costs. Traditional ERPs lack this level of detail, creating a visibility gap.

4. Meta Information is Crucial: Meta information—detailed data about a product’s lifecycle—enables accurate supply chain management, especially for international shipments, where multiple stages and costs impact the product's journey.

5. Integrating TMS and WMS: TMS (focused on shipment logistics) and WMS (focused on warehouse inventory) serve different functions from ERPs. The lack of integration between these systems and ERPs complicates supply chain visibility.

6. Sidecar Solutions Help Fill the Gap: Systems like 3rdwave bridge ERPs, TMS, and WMS by integrating financial, product, and logistics data into a cohesive view, allowing for better data flow and decision-making across the supply chain.

7. Starting with Spreadsheets Has Value: For companies moving from spreadsheets to ERP, starting with an understanding of core processes is essential. Not all processes tracked in spreadsheets need to be replicated in the ERP.

8. ERP Implementations are Extensive: Implementations can take 10-18 months or more. Careful planning, documenting business processes, and working with experienced implementers are critical to avoid costly mistakes and unmet needs.

9. Separate Core ERP and Non-ERP Tasks: Not every business process belongs in an ERP. Trying to customize the ERP for tasks it wasn’t designed for leads to inefficiencies. Keeping core functions in the ERP and managing non-native tasks with separate solutions improves efficiency.

10. AI is Promising but Won’t Replace ERPs: AI may help with demand sensing and pattern recognition but is not a quick fix for ERP limitations. As AI becomes more embedded in ERP applications, it will enhance specific functions but won’t replace the foundational structure of ERPs.

PS: Do you have any questions for Grant? Reach out to me at [email protected] and I can pass it on.