7 Steps To Choosing the Right ERP Software
Organizations must make necessary adaptations as the Digital Transformation trend continues to spread across all industries. With increasing options in Enterprise Resource Planning (ERP) software—which has become arguably one of the most essential keys to digital transformation.
Selecting what will work best for your company is a lengthy but regimented process when done correctly; and often results in failed projects if done improperly. For those investing heavily in their ERP systems, selecting what they'll use going forward based on the proper evaluation criteria becomes essential.
This blog will give you a step-by-step guide on choosing between so many different options when looking at both new and existing ERP software solutions. Here are seven steps we suggest taking to ensure success when selecting enterprise resource planning (ERP) software solutions.
1) Define Your Business Requirements
ERP Solutions are essential for any company looking for a streamlined process, but what does this mean? How do you choose the right one for your business? Understanding your company's needs or business requirements affects each aspect of it.
Implementing an ERP system is something that should be considered before making decisions. There are many different types of systems, and they all may work differently for companies- take time to understand what type of system works best for your organization and how each evaluated system responds to individual requirements.
2) Plan an Effective Budget
Sales representatives often try to minimize their products' costs and risk factors. While you shouldn't let these aspects scare you off, it's also important to consider them early in the process so that they don't take away from other priorities or even cloud your judgment. When purchasing ERP software, make sure to explore hidden costs (e.g., licensing, hardware upgrades, WiFi connectivity, devices, and staff filling in gaps left by ERP project-focused employees). At the same time, ERP can be expensive upfront because of the implementation but then become steady over the subsequent years.
Exploring your options will lead to a wiser decision in the end. Don't believe that all pricey products come equipped with features better than those found at more affordable prices - instead, weigh what you need against what each product has to offer related to your business requirements before making a final decision about which one is right for you!
3) Consider Ease of Use
ERP is a system that helps to automate various business processes. There are many different types of ERP solutions available. And it cannot be easy to know which is best suited for your company. Here are steps to ensure you make an informed decision.
Find out what type of business you have and what processes your current technology does not support.
Gather all the requirements for your ERP solution, such as customer-facing features, pricing and scalability needs, data storage requirements, etc.
Define what system users will need access to (staff roles), how many concurrent users will be accessing the system at a given time, and whether or not mobile capabilities are needed.
Weigh the sophistication of your user base related to the usability of the software. As much as a system may be a fit for your company, if it is too complicated for the end users, that is a non-starter.
4) Consider Scalability
Find out what kind of scalability you will need for your company. A fit for an organization now is one thing, but how does this align with where the company will be in 10 years? Is growth in the form of headcount, locations, companies, countries, or business lines on the horizon? Consider whether or not there are any unusual legal requirements, customer service needs, or report-generating processes that require consideration before choosing an ERP solution. Choose a product that will work well with your company's culture and values. Determine how much time you are willing to invest in training, system administration, and project management tasks when selecting this particular software option.
5) Consider Integrations
An ERP solution is a system that integrates various business functions and data into a single, cohesive application. If you're starting a new business or looking for an upgrade, there are many factors to consider before selecting an ERP solution. The first step in choosing your new system is understanding your needs and goals. Understanding what specific features and functionality you need will help narrow the selection of available products. You should also consider how your company operates internally, as this will affect which solution is best for you. For example, if employees use Salesforce.com for tracking customer interactions, it might make sense to seek out an ERP platform with pre-built integration to Salesforce.
6) Consider the Price
Price is one of the most essential factors when selecting your ERP software. This applies to both the licensing for the software and implementation cost from your partner and supporting independent consultants. A low price is not always a good indicator of what you are getting, so be sure to find out more information before making a decision. In addition, try and find solutions that fit your needs and budget. As companies grow over time, their needs may change, and they might need to invest in an entirely new ERP system. To help you make this decision, think about how much you want to spend upfront and how much you want in maintenance fees each month. The best advice is like any other major purchase: comparison shop!
7) Request RFP Responses & Demos
Start by considering your ERP needs. Do you need an ERP solution? Do you need a suite of integrated business applications? How about a single application for one department? Once you've determined your requirements, make a list of vendors that offer what you're looking for through your own research. Then, submit a Request For Proposal (“RFP”) to gather written responses. From those that respond adequately and your interest remains, request demos from those companies and compare their offerings. Within your RFP to each vendor, ask questions about their pricing structures and licensing models; also inquire about any limitations in functionality or integrations. An independent, unbiased consultant is an excellent choice for filling this role.
Finding the Right Implementation Partner
The first step in finding a good ERP solution is understanding your current needs and deciding what you want from an ERP system. You should also research and check out some demos of different ERP systems. Keep in mind that not all ERPs are created equal, so choose wisely!
The second step is speaking with vendors who offer the type of system you're interested in and reviewing their product information. This will help you narrow down your options.
The third step is identifying your ideal vendor, which might be based on price or other factors. The best way to do this is by conducting interviews with two or three vendors to compare each one's offerings side-by-side. With that in mind, follow #erpvisions on LinkedIn to stay up to date on the John Hannan LLC blog.