Checklist for selecting the right ERP software for your business
The best ERP system for your business is a strategic decision that will ensure you make the right IT investment. The impact of an ERP system on your business can have a huge and complicated effect. It can either make or break your company. It is crucial that you make the right decision from the start. A bad choice could cause havoc for your business. Panorama Consulting’s 2019 ERP Report found that only 66% of organizations were satisfied with their ERP vendor. Poor requirements definition and lack of organizational alignment prior to implementation were major reasons for vendor dissatisfaction.
It can be difficult to choose the right ERP vendor among the many available. It can be daunting to sort through all the options available and choose the best one for your company. It can be made much simpler if you have a checklist. We have created a checklist to help you choose the best ERP system for your business.
Table of Contents
Choose the best ERP system for your business
1. Describe your business needs
Assessing your business processes is the first step to selecting the right ERP system for you. Next, set your expectations regarding the implementation of an ERP system. Find bottlenecks and pain points within your current system, and then determine how ERP software could fit into your business to transform it and improve your business performance.
2.Establish an ERP vendor selection criteria
Once you have identified the business requirements, it is time to identify the features and functions that an ERP system can offer that will help you organize them. Identify the features that an ERP system should have for your business and make a list.
2.a.Option for deployment
Cloud ERP is the best option, regardless of whether you need it on-premise or cloud. It offers many benefits such as cost savings, ease of deployment, greater mobility, lower risks and scalability.
2.b.Functionalities specific to the industry
You should look for industry-specific functionality in your ERP system. If you’re interested in discrete manufacturing, for example, you might need to think about your Material Requirements Planning, Bill of Material requirements and features that support your manufacturing process like lean manufacturing features. There are many different industry-specific ERP systems on the market today. Choosing an ERP system that has industry-specific functionality can help you minimize the need to customize your ERP.
The ideal ERP system will be flexible enough to adapt to the changing needs of your business. The system should not only meet your current needs; it should also scale to accommodate your future requirements as you grow. This could include more users or additional capabilities.
You should be able to integrate the ERP system you choose with any existing software you use, or those you might need in the future. If the ERP system can integrate with other systems, then you will be able to enjoy an automated, end-to-end software solution. This is actually the purpose of installing an ERP system.
2.e.Flexibility and customizations
The ERP that you choose must have comprehensive functionality, but it should also allow for customizations to suit your needs.
If the ERP is not used to its full potential, your investment will be reduced. Your ERP users, employees, must be able to use the system effectively. This will have a significant impact on the system’s ROI. It should facilitate user adoption by providing a simple interface that is intuitive and easy to use. It should be easy to access training tools and learning materials.
2.g.Support for the most recent technology trends
An ERP system should support or even enable integration with new technologies such as Artificial Intelligence (IoT), Internet of Things (IoT), etc. To keep up with the latest trends and remain competitive.
2.h.Analytics and reporting
Modern businesses require reports that improve your decision-making abilities. ERP systems should include the most recent reporting and analytics features such as Business Intelligence, real time tracking and predictive analytics. These capabilities help you transform data into actionable insights that will improve your business strategies.
3. Define a budget and a time frame
You should have a clear idea of how much money you are willing to spend on an ERP system. Also, you should know when your ERP solution will be live. Based on the size and complexity of your business, the number of locations and the customization needed, ERP implementations can take anywhere from several months to years. You should also consider hidden costs such as training costs, maintenance costs, on-premise hardware costs, and any other utilities when calculating your budget.
4. Create a list ERPs that meet your selection criteria
Now that you have established your budget and selection criteria, you can narrow down the ERPs that best meet your requirements.
5. Evaluate and shortlist ERP vendors
Many vendors may meet your requirements. You need to evaluate all options before you choose the best. Consider things such as vendor reputation, past industry experience, technology direction and viability of the vendor, customer satisfaction, support and training provided, total cost of ownership, etc.
To understand the potential of each vendor you’ve shortlisted, contact them individually.
6.Schedule ERP vendor demos
Once you have found potential vendors, get more information and schedule product demonstrations. A lot of vendors will send representatives to show you the product in person. Some vendors also offer free online demos. To get a true feel for the product, take advantage of demos and free trials.
7.Compare your results and use a scoring system.
After all your evaluations and insights from the demos you will have found 3 to 4 best matches. You can compare them by using a scoring system that allows you to quantify the features each system provides and how they compare against one another. This is a great way of finding the right fit.
8. Make your decision and reach an agreement with the ERP vendor on the final terms
Before you start the actual project, make sure you have a clear Statement of Work (SOW). To avoid any confusion later, the SOW should include details such as scope, milestones, and costs.
Although the exact percentages may vary depending on whom you speak to, it is common knowledge that ERP implementation projects fail between 40% and 60%. Successful implementations are those that are completed on-time, within budget, and deliver the desired functionality. The most important aspect of ERP software implementation is training. This ensures that there are fewer problems and greater success, particularly when ERP software is being implemented for the first or second time.