Things To Consider When Selecting The Right ERP Software For Your Business

December 3, 2018

ERP (Enterprise Resource Planning) systems are an essential aspect of any growing business. It involves integrating the various functions that are essential to running a successful business into one complete and streamlined process.  Let us take a look at 7 things you should always think about before and when selecting the right ERP software. 

1. Make a list of key requirements

ERP software is most successful when it moulds to your business’s specific needs.The best way of selecting the right ERP software for your organisation is to simply list the reasons why you want a new system in the first place, which would be the ‘needs’, and then determine what functionality is available to meet those requirements.

If there are too many requirements to implement in one go, then a phased approach is perhaps best suited to your business, allowing you to prioritise critical functions and have them ready to use on day one immediately after implementation. Not only does this reduce the amount of time the implementation process impacts on day-to-day productivity, it also helps you to establish where requirements are most needed and highlights any you may have overlooked. 

Good ERP software is flexible, and will allow you to pick and choose specific functionality in order to tailor it to your company. You should avoid trying to shoehorn your business into a particular ERP system and instead focus on finding one that is more suited to your individual business processes and requirements. (It’s worth finding out if your potential vendors offer any industry-specific solutions that have already been optimised for your sector.)

A good solution will also allow you to add more functionality over time if and when it is required.

2. Choose an option that can be used across smartphones and tablets

Being able to securely access ERP software from smartphones and tablets provides your business with greater flexibility. Leading global businesses including Apple are an example of a successful ERP implementation, as they have found success through partnering with ERP providers across mobile devices and even mobile apps.

3. Choose the right cost model
Should you opt for a Fixed Bid contract, or should you choose a cost model that’s based on the predicted time and materials (T&M) involved throughout the scope of the entire project? That’s a question many organisations will be asking themselves when the time comes for ERP implementation.

If it’s a Fixed Bid contract, you’ll have a more defined view of the scope of the project in regards to overall timescales and cost. Although this may take some additional effort at the outset from both parties, many businesses prefer to work this way because it helps them to establish a budget in advance and minimises the risk of any “hidden costs” cropping up, such as under-quoted investment of time or the need to implement additional functionality they thought was included.

Having a clear understanding of your requirements beforehand and being strict with the original project scope is definitely important to your ROI.

4. Customization and Integration
Whatever your industry or business, chances are your needs and requirements don’t stay the same year-over-year. As such, you need a software that can adapt and adjust to your dynamic needs while still providing value. Having customization and integration capabilities in your software is pivotal for achieving that. It's also important to understand the difference between “configuration” and “customization” of your ERP software. Configuration is usually easy to do and can be done by clicking on options available within your enterprise software. Whereas, customization refers to the changing of the actual code of the software to suit your needs; which usually takes longer and is more cost intensive.

5. Determine your return on investment
 Its important to calculate what your total expenditure will be and what business benefits you can expect. This won’t just help you determine which software package/vendor yields the greatest ROI, it also provides the information your executive management will want and will facilitate the approval process once the selection has been made.

If the ROI calculated for a particular vendor does not make sense or does not meet your budget, it’s probably best to discuss with your vendor and explore other options. The ROI calculation may also reveal that due to budget, resources and other factors, the present time may not be the time to start an ERP project. If that is the case, use the ROI to help you put into motion a plan to prepare your company for an ERP project at a later time when budget is available.

When calculating your ROI, be sure to compare it to your current costs. If you are self hosting don’t forget to consider IT hardware costs, servers, downtime, electricity usage, upgrades, security, disaster recovery – as well as the time and efficiency savings that should come as a result of implementing the right ERP software.

6. Explore new functionality not previously considered
Understanding how your business processes work step-by-step is essential, as this will help you to ascertain what kind of ERP system will best fit your organisation and meet the needs of your staff. But is there a different way of doing things, an even better way?

The best new system for any business is going to be the one that brings added value, not one that simply replicates what you’re already doing, no matter how well it’s worked for you in the past. Your ERP vendor may be able to highlight areas in which business processes can be improved through some new functionality that you possibly did not know about.

7. Can your new software keep pace with changes in the industry and marketplace?
You know your business better than most people, which also means you should have a clear understanding of the changing pace within your industry and/or marketplace. If productivity tends to fluctuate throughout the year, or if you plan on adding more users or functionality over time, then it’s important to have a system that’s scalable and provides a framework for future growth.

This is where the option of having a cloud-based ERP system enables you to easily scale up and scale down your business operations accordingly.

8. Choosing the Correct Implementation Partner
Sometimes, just buying the license for your software is not enough. Many companies, especially small and medium sized enterprises, often lack the requisite knowledge, resources, time, and expertise to ensure a smooth rollout. Managed service providers can step in here and lend a helping hand. They can provide you with local support or skilled resource set with proper expertise to smoothen your transition.

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