How to choose ERP software for your organization

When deciding on an ERP system, the key to success is the people who implement it. For example, a survey by Deloitte & Touche asked businesses to list the top ten criteria for selecting an ERP system. These responses were then ranked according to importance. By identifying these criteria, an organization can determine whether an ERP system will meet the needs of its business. Listed below are the tips to help an organization make the right decision when choosing an ERP system.

Once the organization has determined the needs and business goals, it should evaluate the vendors. It is equally as important to determine the criteria for selecting an ERP vendor as it is the ERP system. For example, if the company focuses on manufacturing, it may need a software solution that enables it to process orders more efficiently. When evaluating ERP vendors, determine the requirements of each individual employee. Then compare the criteria of each vendor against those criteria.

How to choose ERP software for your organization
  • ERP is crucial for digital transformation

    Gartner reports that the ERP market grew at 8.8% in 2019, and was valued at $38.8billion. It is projected to continue to grow at 7% per year in constant currency, with a market worth $44 billion by 2022. Experts believe these numbers may be higher than expected. This is because of the global pandemic, where ERP sales have risen as businesses focus on creating flexible supply chains. This has been a critical aspect for companies since the onset and continuation of crises. When deciding on an ERP system, the key to success is the people who implement it. For example, a survey by Deloitte & Touche asked businesses to list the top ten criteria for selecting an ERP

  • ERP software gives you a complete picture of all business functions. An ERP is an umbrella system that manages inventory, accounts transactions, resources and production. It also provides a single platform to manage different customers and vendors. Modern ERP systems incorporate new technologies such as Big Data, Artificial Intelligence, and Machine Learning. These ERP systems provide a comprehensive view of a business's operations and allow you to swiftly resolve any gaps.

  • On-premise and cloud ERP are the most popular types of ERP systems. The main difference between cloud-based and on-premise ERP systems is how the software is deployed. Cloud ERP is a key component of digital transformation. Panorama Consulting found that cloud ERP is preferred by 62.70% of organizations over traditional on-premise software. Cloud ERPs offer organizations a competitive edge and flexibility because they are compatible with the latest technologies like Industry 4.0.

How can an organization choose an ERP system?

The selection process should be facilitated by a selection team. This group should be comprised of management representatives, functional business leads, and subject matter experts (SMEs). The team should include members from every business unit and location, including management. SMEs should have a good understanding of downstream processes and how departments may impact them. They should also have a commitment to the project and be willing to take the time to participate in the selection process. Once the team has been created, it should begin the selection process. There are few essential steps the selection team must follow.

  • Create your ERP research team

    The selection process should be facilitated by a selection team. This group should be comprised of management representatives, functional business leads, and subject matter experts (SMEs). The team should include members from every business unit and location, including management. SMEs should have a good understanding of downstream processes and how departments may impact them. They should also commit to the project and be willing to take the time to participate in the selection process. Once the team has been created, it should begin the selection process.

  • Evaluate ERP providers

    The service providers of the ERP software must have a proven track record and there should be the after-sale support which is very essential for the future improvements according to the necessity of the organization There are many ERP options available today. It can be difficult to choose the right package for your company. Many companies believe that any software will work and that their businesses will conform to its functionality. However, many ERP failures have been widely reported. ERP should not be taken lightly. What's the best way for you to choose the ERP solution that is right for your company? These seven steps will help you select the right software solution for your company.

  • Perform process analysis and review

    ERP is a business initiative. You should first identify and document your current business processes. You should also consider what your future state (your "to be") should look like and what business requirements it should meet. These requirements and processes should be used by potential software vendors to show their product's capabilities in the context of your business.

  • Assess the technical fit

    ERP should not be considered a technology project but a business initiative. However, it is important to assess how the potential software solution will fit into your existing infrastructure. If you are a Microsoft shop, ERP products that are built on a.NET platform will likely be a better fit for you.

  • Know the total cost of ownership:

    RP software sales representatives are keen to minimize the risks and costs associated with buying their software during the sales cycle. It's easier to accept possible costs early on in the process than to commit to a solution. You should uncover hidden costs associated with ERP such as implementation costs, hardware upgrades, and backfilling project team resources. Software maintenance is also important.

  • Make a realistic implementation plan

    You should not take vendor implementation time estimates while you are still in the sales cycle. A comprehensive project plan should include not only the tasks required to install the software but also the ones required to make sure that the solution is functional, tested, and accepted as such by end-users. You should create this plan before you make your final software selection. This will allow you to fully understand the costs and resources required to make the project successful. The implementation plan must include everything, from business process and workflow design, data migration, conference rooms pilot, multiple iterations, key organizational change management activities, and data migration. Keep track of the business benefits that the system could bring to your company. It is unlikely that you will achieve your goals if you don't measure them. ERP projects are no exception. Your organization may be looking at ERP to lower costs, increase revenue, or scale for growth. If you want to fully realize ERP's potential, you need to estimate and measure these benefits.

  • Be open to all possibilities

    This may sound like advice for a date, but it is also applicable to selecting an ERP package. Contrary to popular belief, there are many ERP software vendors. While two to three major software vendors account for the majority of market share, marketing dollars, and market share, there are at most 70 viable ERP solutions on the market. Each solution has varying levels of functionality and strengths. Too many companies base their decision on the brand or competitors' performance. Organizations should instead consider which options will best suit their business needs and provide them with competitive advantages. Seek objective, independent advice. Ask your colleagues, employees, or other contacts for their recommendations. If necessary, conduct research online or hire an ERP consultant. If you don't have ERP experience, don't assume that you know everything. To validate the information you hear from software sales reps, seek out independent ERP advice.

Conclusion

A business’s first step is to select an ERP. If implemented correctly, it can be a huge investment and bring significant ROI. ERP implementation is a crucial step. While a poor selection can lead to significant time and resource wastage, a good selection will deliver substantial business benefits. Poor ERP selection can often be blamed for ERP projects that don’t meet business expectations. Take your time when making the decision and make sure you follow the steps. It can make a big difference in generating more ROI by spending some time researching and clearly stating your goals and expectations. You can avoid a messy or unsuccessful implementation by putting in the effort and time.

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