08 Jan How to choose the best ERP system?
Undoubtedly, today the market of ERP systems is gaining such great popularity and usefulness that successful companies almost cannot exist without them. ERP systems are available in all sizes and shapes for all platforms and development environments. Evaluating ERP systems available in the marketplace and then choosing one for your company are critical parts of the process. Because of the large number of ERP systems available on the market today it is difficult and time-consuming for a company to choose the best one. The final goal of the whole process is to pick an ERP system that will best meet your company’s requirements.
The selection process of ERP consists of several stages. At the very first stage, there should be formed a selection team that will do the evaluation process. This team should comprise of people from all departments, top managers and consultants. The selection team should be entrusted with the task of choosing an ERP package for a company. At the very first stage of the process, the selection team should perform market research to decide which vendor systems might be eligible candidates. ERP vendors can be identified from different sources, including websites, industry magazines, and trade exhibits. Vendors may also be identified through discussions with customers, suppliers, and other partners. Based on the document requirements, industry, and cost considerations, the selection team can eliminate many vendors at this point. Companies typically narrow down the list to a couple of vendors. And then, they pair down their lists by talking to a vendor’s product expert, watching overview demos of software online, reading the vendor’s product literature, or getting insight from a consultant.
The selection team asks vendors for references in order to conduct reference visits. Reference visits allow the selection team to see each system under consideration implemented in a real-world environment with live data and actual users versus what has been seen in a demo conducted by the vendor’s sales team. During reference visits, the selection team members have the opportunity to speak frankly with their counterparts at other companies and gain insights into the benefits and drawbacks of the system they are using. It is important that references supplied by the vendors are generally the ones that are happy with the vendor’s software. From the reference visits, the team should be able to confirm whether an ERP system under consideration is right-sized, whether it fits the industry well, how good the local technical support is, and how the current version runs.
After the decision of an ERP package is taken, the company should develop the selection criteria that will permit evaluation of the all the available packages. In order to choose the best ERP system, the company should identify the system that meets the business needs and identifies with the business practices of the company.
Top factors to consider when deciding on an ERP system:
- Have a structured approach. The first step in the selection process is a structured approach. It is a set of practices that are presented to all representatives and stakeholders within the organisation before the selection process begins. All departments and stakeholders must contribute to the requirements definition and be aware of the ERP selection process.
- Insist on demonstrations. You must engage the representatives of all departments to attend demonstrations from ERP vendors. Make sure that everyone agrees that vendors are capable of doing what they are promising. Insist on seeing an ERP system in the real world. You need to see demonstrations that apply to your specific situation. You should work out in advance what part of the activity you want to see demonstrated and how much of sample data do you want to provide prospective vendors.
- Purchase the modules you need. ERP packages are sold as suites, but you do not necessarily have to buy them that way. You can purchase the modules that your organisation currently needs. The modules are integrated as you deploy them, whether that is in your initial installation or several months down.
- Plan for the future. Choose an ERP system that can grow with your company. Consider not only the features you need at the moment but also the features you may need in the future. ERP is a long-term investment. So, you need a solution that will be flexible enough to accommodate evolving business processes and new initiatives in your organisation and is scalable enough to include additional users.
- Make sure vendor competencies match your requirements. Check carefully the vendor’s experience, reputation, and the features of the ERP package, implementation support, and other details in advance. Ask your potential vendors to demonstrate the functionality and the ability to scale up and a few implementations where their systems have been used.
- Check flexibility and customisation. You should check carefully how flexible an ERP system is and what adding new functionality entails. Successful customisations require extensive knowledge both of the ERP system as well as the business needs in order to understand how to best customise a solution or configure a system’s many available features to develop optimal solutions for the unique needs of the business. If you have concerns about the limitations of an ERP system that you are considering, make sure the implementation team you are considering has a team of developers and integration experts who have a proven track record of working around limitations of a variety of ERP systems.
- Compare different ERP systems. Companies looking for the best ERP system for small business embrace hosted or cloud-based ERP systems for a few key reasons, particularly some discounts they may get by purchasing bundled services. Many feature sets are very similar among premise-based ERP systems, so it is very important to compare costs between the installed systems on your vendor’s list.
- Calculate the total cost of ownership. The true total cost of any ERP system includes implementation, customisation, and management services, training, additional hardware for an on-premise solution or ramped up bandwidth for a web-based product, and sometimes additional IT staff.
- Insist on a thorough demonstration of an ERP system. Companies offer an online demonstration of their products. You shall meet with the vendor and get a demonstration that will allow you to experience the usability of each separate module of the system. Engage employees from the various departments who will use ERP to estimate how well the system will support all business processes.
Concluding, we can say that evaluation and selection processes are two important phases of the ERP implementation because the package you select will decide the success of your business. Choosing the right business ERP solution is a major decision as well as choosing an implementation partner who will take the time to learn about your business and work with you to develop the most efficient, usable, and profitable business ERP solution for your organisation. The best-chosen ERP system will help to organise, automate and transform the way you do business. And it will contribute to increased efficiency and subsequent growth of your business.