A new ERP system can make all the difference for companies that are struggling with legacy systems and encountering difficulties growing their business, meeting customer service expectations and maintaining compatibility between systems. Enterprise Resource Planning (ERP) is highly effective process management software that integrates business supply chains, commerce, operations, financials, manufacturing, reporting, and human resource activities. ERP software is critical for optimizing operational performance and ensuring business agility. While all ERP systems have the same basic goal, not all offer the same level of quality, ease of use, and functionality.
Enterprise Resource Planning Software Criteria
Because ERP plays an important part in optimizing operational performance in your business. There are certain questions you should ask before selecting the right ERP software.
What Does Each Department Need for Their Software?
Each department within an organization has its own software needs. Start by engaging users and collecting feedback from those who will be using the software. Consider what processes are required and which tasks could be streamlined to avoid production issues. Identify problem areas and brainstorm ideas to resolve these issues with the introduction of new technology or processes.
Which Deployment Option is Best for My Organization?
Choosing an ERP solution is not just about selecting the right software vendor. It is also essential to consider the delivery model in which the software will be deployed. Several deployment options are available to businesses, such as hosted, on-premises, public cloud, private cloud or a hybrid solution that maintains on-premises capabilities while integrating some cloud services. Think about how your employees work today and consult with department heads and stakeholders to determine which is best for the organization.
Should I Invest in Custom or Out-of-the-box Software?
Choosing between custom and out-of-the-box software solutions is not always straightforward. Custom software is typically the most costly choice but custom software also presents certain benefits. The software is built specifically to meet the challenges of the business and can be modified or expanded to grow with the business. Out-of-the-box software is more affordable and readily available. It too can be customized to a certain degree.
Selecting the ERP Software for Your Organization
With many ERP software options currently on the market, choosing one for a business can be an overwhelming task. Follow these tips when selecting an ERP software for an organization:
Gather the Requirements Across All Departments
ERP is a critical business initiative that requires communication and collaboration organization-wide. Create a list of software requirements from all department leaders to determine what processes are required and which can be altered or eliminated from the new software solution.
Identify Your Most Important Selection Criteria
When comparing ERP software and vendors, it is important to focus on the business requirements without getting distracted by the bells and whistles. Consider aspects like deployment, scalability, integrations, user-friendliness, flexibility, customization and reporting. Modern ERP software should also support the latest technology trends.
Develop a Budget and Implementation Timeline
Establish a clear budget and timeline before selecting an ERP software. If you think of this as a two-part process, there is one timeline for selecting a new system and then another timeline to implement and go live with that system. In addition to the cost of the system, there will be additional costs for consultants and implementation, and potentially training, hardware and maintenance depending upon what is included in the license agreement. The total cost of ownership should be determined during the selection phase.
Establish a List of Potential Custom Software & SaaS Vendors
Several vendors may fit a company’s criteria on paper, but when a deeper comparison is performed it becomes evident which software is best suited to meet the requirements of the business. Through an RFI or RFP process, you can gradually reduce the list of potential custom software and software-as-a-service (SaaS) vendors and develop a shortlist to complete vendor demos.
Perform an Analysis Based on Vendor Meetings and Demos
Vendor meetings and product demos can provide companies with ample data points to guide their decision. It is common for vendors to send a representative to provide a live demo; however, some vendors also have product demos available online via free trials. These demos can help businesses get a feel for what they can expect if they purchase the software, and even see examples of how their processes and workflows “fit” into the system.
Discuss Options with an IT Strategy Consulting Firm
Even with ample research and analysis, it can be difficult to decide which ERP software is the best fit for the company. Professional ERP software can be a significant investment and the decision should not be made lightly. Consider discussing options with an experienced IT strategy consulting firm to provide more in-depth information about ERP software and vendors.
Agree to the Final Terms with Your Selected Vendor
The last step in the selection process involves negotiation and implementation planning. Carefully read the terms of the purchase and make sure the proper service level agreements (SLA) are in place. Follow up with any questions or concerns before signing the agreement to make sure there are no surprises down the road.
Speak with Our IT Consultants About ERP Software Selection
Selecting and implementing a new ERP system is a big undertaking. With many great ERP solutions available, it’s important to be diligent in selecting the one that is the best fit for the needs of the business today and in the future. For more information about ERP system selection, request a consultation with an IT consultant at Hartman Executive Advisors today.