10 Golden Rules for Choosing an ERP System

Posted by Gerry Poe

10 rules for chosing erp softwareUntil recently, organizations needing more than one or two enterprise software systems had few choices when it came to enterprise software and services. You installed an expensive, complex enterprise resource planning (ERP) software system at your facility, and then you passed out user manuals full of unknowable keyboard combinations for various functions.

If you’re moving to ERP, you can choose between an on-site system, including CRM and WMS, and a cloud-based service hosted by a provider delivering all ERP functions over the Internet.

Now that ERP systems can be delivered over a local network, even smaller companies can have access to enterprise-grade business management features. Like any business-critical system, an ERP system is a major deployment which should be undertaken only after a thorough, patient discovery of both your existing infrastructure and users’ needs.

Following these 10 golden rules will help you choose a new ERP system for your organization:

  1. Focus on ERP systems targeting your company’s requirements.

    ERP systems are targeted to organizations primarily based on the number of employees you need to support, from the network hardware to the factory. Although you want your system to scale easily as you add new users, you don’t want to overprovision services — and pay for more system than you need now.

  2. Identify the ERP features and functionality your organization needs.

    Although many ERP systems have the same basic finance and business management features, advanced features can vary significantly. Make a list of must-have features including supply chain, product and customer management and production routing, globalization, reporting services, customer relations and warehouse management functions. If you choose a premise-based ERP system, identify also the IT management features you require.

  3. Include a Software-as-a-Service (SaaS) solution in your assessments.

    SaaS is an alternative choice for delivering an ERP system. Many traditional ERP vendors now offer hosted services, which includes production routing, email and other enterprise system features you’d get from an installed IP-based system. SaaS offerings require little investment in new infrastructure, they’re, potentially, easier to deploy than an on-premise solution, and they can more easily be upgraded to include new enterprise services, such as Factory Scheduling and Planning and analytics capabilities, as soon as you want them.

  4. Ask about each ERP system’s roadmap for the future.

    The last few years were a tumultuous period in the ERP market as many companies announced mergers, acquisitions and reorganizations. As a result, some ERP systems have been discontinued and others have been consolidated within other product lines. If you were considering systems from Epicor, SAP, Oracle, or --, ask how they were affected by changes in company ownership. Even if the systems on your list weren’t part of this industry shake up, find out what plans the vendors have for these products, both short term and long term.

  5. Plan for your organization’s future expansion or contraction.

    Choose an ERP system which grows with your organization, scaling to support both additional users and more network traffic. Consider not only the number of employees you need to support with ERP services now, but six months from now. Find out how easily you can add additional ERP system functionality as new employees are hired and departments morph. Find out, too, how extensible the system is to additional locations and languages if your company plans to add branch offices. Enterprise and technologies are changing at breakneck speed, and users’ expectations of their ERP services are evolving quickly — you need an ERP system which can keep pace.

  6. Investigate the vendor’s other enterprise solutions.

    ERP is essentially the gateway technology to more advanced enterprise solutions and software services. Once you have an ERP solution, you can easily migrate to enterprise wide integration of services, advanced collaboration capabilities, consolidated services and more until you’re ready for a fully integrated enterprise solution. Most companies want to be on this path, so make sure the ERP system you’re considering now will allow you to painlessly add those features as you’re ready for them. Know and understand those systems which are ready, today, for deployment, so you can trust your ERP choice is a future-based decision. If you choose a premise-based or a cloud solution, find out how seamlessly you can upgrade to new technologies.

  7. Prepare for enterprise mobility services.

    If some of your employees are highly mobile, working from the road or even from home offices, you’ll need a telephony system that integrates smartphones. Look for a system that extends the calling features to a mobile phone as well as one-number call forwarding to a mobile phone.

  8. Ask about vendors’ partnerships with other software vendors.

    Phone systems are no longer stand-alone solutions that sit next to your network. A VoIP solution that shares a converged network with your data can be integrated with other communications applications as well as business software. Find out if your phone system integrates with applica­tions like video conferencing and collaboration tools. Ask, too, if the system integrates with customer relationship management (CRM) suites.

  9. Assess the vendors’ technical support and customer support services.

    A new ERP system must be carefully engineered and soundly implemented, which you may want to outsource to your vendor. Find out also what kind of technical support you can expect after the ERP system is deployed. If you’re planning to purchase a cloud-based ERP solution, find out what kind of service level agreements (SLAs) you should expect. For example; don’t hesitate to ask for contacts at recent installations; other customers can help you assess vendors’ support services based on their experiences. Others in your industry and sector are good references and company’s length of time and satisfaction levels.

  10. Carefully comparison shop different ERP systems.

    Small and midsize companies are embracing 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’s important to compare costs between the installed systems on your short list, too. For many companies, the price of the new ERP system may be the deciding factor, rather than features, functionality, support, future value and integration readiness.

Focused on tasks instead of a mission leaves a team caring less and functioning at a low level.

A free copy of The Complete Enterprise (ERP) Self-Assessment is available for immediate download. With over 300 questions, it will improve the ability of your team to align and get better results.

Download the Checklist: The Complete Enterprise  (ERP) Self Assessment


Tags: ERP, ERP System, Choosing ERP

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