Enterprise Resource Planning software – more commonly known as ERP software – is an essential tool for businesses hoping to succeed in the digital era. Where these complex and often resource-intensive tasks once helmed by a human can now be entirely automated, as a result, those who ignore the technology will fall behind more tech-savvy and future-focused competition.
ERP software allows businesses to automate essential functions, namely the allocation of resources, and exponentially increase efficiency. Additionally, the software gives you the capacity to house all of their functionalities under a single roof, drastically reducing maintenance costs and communication difficulties. The difficulty associated with the integrations process comes with selecting an ERP that doesn’t fit with your running business type. Because of the multitude of different variables associated with both the software and your business, there are no hard and fast rules. Instead, you’re going to want to be focused on the different selection criteria associated with ERP software. Business viability, collaboration, configurability, deployment alternatives, implementation, upgrades, and disruptive innovation management are crucial factors to keep in mind. Below, each of these factors is discussed in detail.
Determining Your Criteria for ERP
Before moving forward with an ERP software selection, you need to have associated a clear picture of which functions and features you will need from an ERP to support your business processes. The returns for working through a selection process are worth the effort because if your business selects an ill-suited ERP solution, you may end up doing more harm than good. By keeping in mind how well the functions and features included in any ERP you consider align with your business requirements, plus other issues such as deployment alternatives, collaboration, configurability, implementation, future upgrades, and disruptive innovation management, will minimize the potential risks and help ensure the new software will work well for your business.
First, you need to identify your organization’s exact requirements from ERP software. While this may sound like a given, many businesses underestimate just how expansive and targeted the software is in its application. Selecting an ERP that isn’t suited to your needs and the modern workforce’s expectations leads to an expensive failure.
Next, take the time to create a realistic ballpark budget. This figure should be flexible but not something you should deviate from drastically. The process is often more costly than people first assume, so making this number a realistic one is essential.
You will also need to consider legacy software and whether or not it needs to be decommissioned. If your legacy system will conflict with your integration or the day to day functions of your chosen ERP package, then it’s recommended to decommission them entirely. This process, too, has an associated cost that should be added to the ballpark figure mentioned previously.
When selecting the specific ERP package from the shortlisted candidates you’ve determined best suit your business needs, don’t complete the transaction without a specifically tailored demo from each of the “finalists.” Any new ERP package represents a large capital investment for your organization, so do not hesitate to ask for a functioning demo – preferably following the script you supplied to each competing vendor – and a sheet of technical specifications that are specific to your industry. Before moving forward with any purchase, make certain you’ve seen and vetted these factors. It’s also important for each of the vendors you consider to have an assortment of references from your industry customers. It would help if you only asked that they supply you with these references but also take the time to contact them. Sometimes, hearing about another organization’s experience, such as with this case study, can be what cements your selection.
Lastly, make sure your team is ready for the integration process. This step means assigning teams and leaders dedicated to specific tasks and testing efforts. Pick suitable team members to act as “super users” who will head the bulk of the testing and implementation duties.
Selection Factors to Consider
The first factor you will need to consider is whether or not the ERP is compatible with your organization’s specific requirements. Selecting a stunted package in features or lacking some necessary functionality will not make for a good return on investment.
Maintenances costs also need to be considered. An ERP with a base cost that fits your budget may not be as suitable as it first appears. If that same software package is known to require frequent maintenance and fine-tuning to run at full capacity, then its usefulness may not exceed its maintenance cost. Being aware of these costs can prevent a lot of headaches in the future.
The flexibility of the software is also a factor to consider. A software package’s feature set and overall ease of configuration is a crucial factor. You will need to know whether the ERP package can be implemented as a global, single-instance solution in a similar vein.
Another notable factor is the ease with which the software can be updated. This factor will be immensely beneficial in the future, and noting it early on is highly recommended. You’re also going to want to know whether or not the software is scalable. Can it grow, shift, and expand along with your business, or is it limited in this regard?
Another factor to keep in mind is how receptive the vendor is to your staff’s recommendations or complaints; will they take your desires and criticisms into account when developing future software versions?
All of the factors mentioned above are vital when selecting an ERP system. Be it cloud-storage compatibility, capacity for global application, maintenance cost, or customization, ensuring that every aspect of a given ERP package conforms to your requirements will ensure long-term satisfaction.
If you’re still having trouble selecting a software package, there are plenty of impartial consulting companies who specialize in the process and can help you select software that is well-aligned with your business needs. If you aren’t interested in working with another company, software exists to perform the same function without a middleman’s need.