Organizations use enterprise resource planning (ERP) as a system to centralize and manage their business functions. ERP software allows departments to work together using stored data in a single database, which helps companies better manage day-to-day activities, such as risk management, accounting, project management, procurement, supply chain operations and compliance.
What To Consider When Choosing An ERP System
While all ERP systems have the same basic goal, not all offer the same level of quality, ease of use and functionality. Make an informed decision by asking the following ten questions before choosing an ERP.
1. How Will The Software Meet The Needs Of My Organization?
ERP systems are not ‘one size fits all’. Finding the right fit will depend on the industry, the size of the business and other unique factors. To determine what software will meet the requirements of the organization, begin with performing a needs analysis. Seek help from a third-party consultant to interview employees and take an in-depth look at current business processes and activities to identify areas for improvement and define business requirements.
2. Which Processes Will It Streamline Or Automate?
The primary goal of ERP solutions is to create efficiency in the workplace. This often encompasses the streamlining or automation of manual or time-consuming business processes and activities. When comparing ERP systems, use a scorecard to rank automation capabilities and evaluate how the system meets your business requirements.
3. How Do We Stay On Time And On Budget?
Businesses commonly face tight budgets and time crunches that can create unnecessary stress. ERP implementation, in particular, is known for going over budget. When evaluating an ERP system, it’s important to understand the total cost of ownership (TCO), which includes costs beyond the purchase price and implementation costs.
One way to help with budget and timeline estimates is to talk to peers who have recently undergone an ERP implementation and can provide insight into realistic figures to set expectations. As with any business initiative, communication is key to achieving budget and timeline goals, so stakeholders fully understand what is required of them for the duration of the ERP implementation period.
4. What Type Of Deployment Model Will It Use?
One of the decisions an organization needs to make when choosing an ERP system relates to deployment. There are five main types of ERP software deployment models: hosted, on-premise, public cloud, private cloud and hybrid.
A hybrid solution maintains on-premises capabilities while also integrating some cloud services, and is a solid choice for many organizations. Yet, every company is different and therefore, deployment models must be considered before making a selection.
5. Does The ERP System Include Support For Mobile Devices?
In a modern business environment, mobility is a must-have capability regardless of business type or size. More people are working remotely, which requires them to have full and instant access to business software. Companies should look for an ERP system that will allow users to log into the software anytime and from any internet-enabled device.
6. How Will The ERP System Be Licensed?
ERP software solutions can be licensed in a number of different ways, such as per user or by module. Businesses that host ERP software using their own servers, as with on-premise deployment, typically pay a perpetual licensing fee. This is a one-time expense paid up-front. Some organizations may also pay a subscription fee for access to cloud-based ERP software.
7. Can The Software Integrate With Other Internal And External Systems?
Many organizations struggle when it comes to integration. To ensure that all systems and processes interact smoothly, an ERP system should be able to integrate with both internal and external systems. Always ask specifically about integration capability when choosing an ERP system and ask vendors to include this in their product demo.
8. Can The Software Be Customized And Developed Further?
Every business has its own unique operating needs. Fortunately, ERP software can be customized to meet the needs of the business and eliminate features and functionalities that are not required. When the business grows, the software can further be integrated with other programs to meet the ongoing needs of the organization.
9. Do You Have The Right People On The Team?
The right combination of people contributing to the ERP effort is critical to long-term success. The ERP team should include executive leaders, project managers and internal champions who will guide their colleagues to properly use the new system. It is also highly recommended to include an independent third-party implementation partner to help with every step of the process.
10. Does The ERP System Support Training And Education Modules?
Selecting an ERP system for an organization is just the beginning. Change management and training are key to successful user adoption. Businesses must also work to properly integrate and implement the software, and provide employee training and ongoing support.
Develop a training plan and identify champions within the organization to drive adoption. With ERP system support training and education modules, employees can use the software properly and with confidence.
Speak With the IT Strategy Consultants at Hartman Executive Advisors
There are countless vendors, partners and suppliers that offer ERP solutions. It is important to determine which offerings fit the needs of the organization at a price point the company can afford. For more information about ERP system selection, request a consultation with an IT strategy consultant at Hartman Executive Advisors today.