ERP Selection

If you want your business to slowly leak profits and not have the ability to make real-time decisions based on hard data, then you can stop reading here. You won’t hurt our feelings . . . you’ll just hurt your long-term bottom line, do you need a new ERP system?

We see it all the time – companies still using green screen (dumb) terminals with dreadfully slow loading times and inaccurate data. These companies have frustrated sales reps and employees, no ability to be mobile, ERP security issues, upgrade constraints because of customizations and worst of all, no support from the company that made the system in the first place. The list goes on. If you experience any of this, you are a prime candidate for a new system that can help your business grow and compete in today’s market.

Unlike the system requirements phase, which is likely to command considerable time due to the consulting process required, your businesses’ goals should be firmly established, with it more being a case of those within the business envisaging how they see the ERP solution selected assisting.
Whether the short-term aim is to improve system efficiencies, or the long-term goal is for your business to branch out into new markets, it is important that your business at least has an idea of how an ERP system could help them achieve these goals.

Understanding the potential business benefits of a new ERP system to your company should be measured in a quantitative, qualitative, and financial manner. The benefit can easily be defined by assessing the key functional areas of your business to determine the impact it will have on all stakeholders, including customers, vendors, and employees. 

Many business owners believe they have an intuitive feel of the impact to all stakeholders, but to truly understand the measurable benefits a needs analysis should be performed to validate and confirm the investment needed to maximize a return.

Prioritize ERP Systems that are Successful in Your Sector
As technology platform offerings vary such as on-premise, cloud, and managed services – selecting a right ERP solution for your business should be first and foremost in your decision making process. Technology platforms are an important part of your ERP software but each offering does have its pros and cons.

The adoption of cloud based ERP systems have become more acceptable in our business cultures today but cloud solutions still hold a very small percentage of total ERP systems sold in North America. Managed Services provides outsourcing service of servers and backups and tend to be used by larger companies to control capital costs and are based on a rental model. On-premise is the traditional method where you purchase the ERP system to be installed on company owned servers. You will need to evaluate the ERP system that best fits your company and adopt the technology platform supported by the ERP system.

The business processes and requirements of each sector are different. You can research the systems used by your competitors and benefit from industry-specific solutions. During your selection, you can ask software providers if they have served your industry before.

electing your next ERP software system can become a complex decision. Taking an ad-hoc approach in your ERP selection process can result in significant unnecessary costs and interruptions to business productivity. In many cases, companies find themselves assessing ERP systems based on market reputation, referral from a friend, or a colleagues’ past experiences with an ERP systems but what tends to occur are; incomplete requirements gathering, generic vendor demos, over-emphasis on total costs, employee bias, attempted self-implementation, and misunderstanding of requirements by the ERP vendor.

We have all experienced at least one or more of these events and the financial impact can be significant thus the likelihood of a successful ERP software selection can diminish significantly. The importance of taking a structured approach will increase the probability of success – here are a few points to consider:

While for many business, the overall cost of the system and implementation will be at the top of their list when it comes to the evaluation, it is important your business chooses the right ERP system for them, not the cheapest one.

While of course price should be a strong factor in any overall decision, the positive effect an ERP system that is well-suited to your business can have on profits and efficiencies far outweighs the initial outlay. Especially if you were instead going to opt for less-suited system, that while cheaper at the outset, was going to require a whole lot of customization and training for it to be suitable.

Deploying an enterprise resource planning (ERP) system is an expensive proposition, not just in terms of licensing dollars (SLA) and maintenance, but in terms of dedicated resources and time. And yet all too often, organizations, dazzled by vendor promises and hype — Deploy our ERP software and your manufacturing business will instantly run smoother and increase profits! — fail to come up with a viable long-term (or even short-term) roadmap.

When investing in ERP systems, businesses are expecting productivity, time and cost savings in their business processes. A system that cannot adapt to changing processes with the developing technology may cause the contrary. To avoid this situation, you must first acknowledge that the ERP system is a living structure. Your system needs to grow as your business grows. Before making your choice, you should give priority to flexible and developable ERP software. Besides, a system where you can make improvements specific to your industry can give you more advantages.

While even the greatest technological minds may struggle to predict the next big breakthrough, gauging the vendors willingness to embrace technological advances in the past can give you a good understanding of how committed they are to staying abreast of the latest technology.

Is the vendor constantly developing its system with mobile apps? Are they starting to work with smart voice assistant technologies? The answers to these questions should give you an insight as to how comfortable they are working with new technologies, ensuring you can have confidence in them in the long-term, reducing the chance of your business being left behind and unable to utilise new technology in the future.

Since ERP software is a big investment, you should be as careful as possible in your budget plan. You may think that the most expensive one is the best one when you make any purchase and you can make your choice in this direction. However, you should not adopt this traditional view during your ERP selection and choose the most expensive one, but as we said in our first tip, choose the system for which you can get the most for your business.

Think before you customize. Consider the amount of customization required to configure and deploy, a provider of Web-based software for managing people and projects. Highly customized systems will generate higher cost, not only in the initial deployment but when upgrading from release to release.

Those businesses with unique requirements need to consider whether those requirements can be mainstreamed to eliminate the steep cost curve, businesses need to understand [their tolerance] for longer implementation cycles, longer ROIs, more instability, [which can come with customization, A turnkey solution may offer less flexibility but more stability, and less initial and ongoing cost.”

Generally speaking, many companies’ basic business processes are virtually the same (like paying invoices, collecting revenue and procuring supplies, this is why ERP was built in the first place. Companies can take advantage of standard processes that are leading class and have been tested by many other companies.

If a particular business function believes they have a case for a customization, make sure they prove it, Remember, the cost of the customization is not only writing and testing the code for initial implementation, but providing long-term support of the custom code and treating any customizations as exceptions every time you upgrade your software, Keep it simple and try not to allow customization into your ERP program.

As all business owners do, we over-emphasis the cost of a new ERP system and associated technology platforms. Many companies reassess their ERP requirements between five and seven years depending on changes in the business environment. However many companies have maintained the same ERP system for over 10 years, therefore understanding the Total Cost of Ownership (TCO) is an important factor in your decision. We tend to look at the first year investment as the impact on the business, but looking at the initial investment plus additional support costs over a 5, 7, and 10 year period will give you a better sense of the total cost of new ERP software.

Today, there are several ERP software publishers offering a subscription based pricing model. The total initial investment is much lower but the total future costs can become sufficient higher. Under a subscription pricing model, you need to determine the total cost of ownership over 5, 7, and 10 years in comparison to other pricing models, including leasing options.

Choose a System Compatible with Your Existing Software
ERP systems are a core component of any businesses’ system structure; therefore, it is important that you consider the affect a new ERP system will have on your other systems currently in use, and whether it has the potential to compliment them. 

Selecting an ERP solution that is unable to integrate with systems that are currently successfully in use within your business could lead to unnecessary costs and problems, with the benefits you acquire from your new ERP system likely to be dwarfed by the problems that it has caused in other areas. More often than not, you’re likely to find that ERP systems that are widely-used are less likely to suffer from integration problems, mainly due to the fact that someone is probably going to have encountered the problem before, meaning a solution is likely to have already been designed and implemented.

Plus Don’t forget mobile users. “As mobility and BYOD increase across industries, accessing ERP systems from desktops only is no longer an option. Choose an ERP solution that “allows users to be productive on smartphones and tablets.” Yet at the same time will ensure that sensitive information is secure.

You may already be using other software or applications for your business other than ERP systems. If you are satisfied with these applications and do not want to waste your investment, you should choose a more effective ERP software suitable for integration. For example, if you are currently using a CRM system and do not want to change it, you can check whether the ERP system you are purchasing provides integration.

ERP References 

Regardless of whether you are part of the panel choosing a new ERP system for your business or selecting a hotel for your next holiday, customer reviews and references play a massive part in all of our buying decisions, and this process should be no different.
While of course you should play close attention to the volume of reviews, more importantly you should seek out references from business in similar industries and situations as you, Once you have these from the vendors, you should reach out to the businesses to find out more about how the system has worked for them in detail, These conversations often give you the best chance to evaluate whether the system is suited to your business, while it also allows you to have some of your key questions answered. It is also a good for helping to make you aware of any potential pitfalls that may lie ahead should you opt for the particular ERP system.
Get references. 

First and foremost, when shopping for an ERP solution provider, ask the vendor for at least three references, ask the customers what went right, what went wrong and what they might have done differently.
Similarly, if you are a member of an industry association, ask colleagues for ERP recommendations.

ERP selection is the first step of the digital transformation path. After this first step, you will go a long way with many stages and numerous obstacles at each stage. It is very important not to be alone in the halfway and choose a partner who can support you when you need to overcome obstacles. You can get feedback from other companies that have already used the ERP software you are about to select.
Engaging a professional service firm which specializes in the ERP system which best fits your company will help expedite the implementation of the solution. You will need to determine the services and expertise offered by the business partner beyond the ERP system since many technologies impact your entire IT infrastructure. You should partner with a professional service firms which offers a one stop shop approach which includes CRM solutions, Enterprise Content Management, Infrastructure solutions, and Web solutions to name a few. The professional service firm can help you determine the best platforms across multiple offerings which best supports the ERP system you selected and can work directly with vendors and publishers on your behalf when needed.
Selecting new ERP software for your company can be a daunting and time consuming task. By partnering with a professional service firm that has industry experience and knowledge in ERP system selection, you’ll minimize the impact of your company and employees while maximizing efficiency gains and return on investment.
Selecting any software solution for your business, regardless of its intended level of use, can be a daunting and time-consuming task, with many potential pitfalls along the way.
Therefore, when your business begins evaluating an ERP system solution, it is important that you understand the steps you must take to help ensure the procurement processes runs as smoothly as possible.

Whether you are looking to find a development partner going forward or want a team of experts to implement a new ERP system for you, sourcing the market for potential ERP vendor partners before you select a system can be a great way of ensuring you will have plenty of options available to you in the future when you require expertise around the software.

Much like we touched upon above, popular ERP systems are likely to benefit from a wide partner network, meaning you not only have an array of experts available to you, but that you are able to carry out a better procurement process with more potential suppliers involved.

For businesses that opt for an ERP system solution with a limited, or non-existent partner network, they are leaving themselves vulnerable to relying on the ERP system vendor to implement and assist them with their system going forward, with no other option should the partnership not work. Most business often find they gain better value and expertise by utilising an official ERP system partner rather than going directly to the vendor. Often, official ERP partners also offer a support service too, meaning you are not solely reliant on the vendors offering.

Systems that are popular within the market are not only likely to be more user-friendly, meaning there will be less need for training at outset, but they should also enable you to benefit from extra resources, whether it be manuals, training partners or user forums.

The popularity of the system can also influence training options available to you. Before selecting an ERP system, it is important that your businesses understand the scale of the training they require and have an idea of how much time and budget they should allocate.

Many businesses can underestimate the cost and role of training, meaning when the implementation is completed there is a lack of resources to carry out the training that is necessary to use the system to its full potential.

Provide the necessary time and resources for training on the ERP system. “Learning a new way of operating will require a significant time commitment for everyone, so the project team must take proactive measures to reduce the burden on employees, business processes and project rescue.

Identify department-specific needs, allowing for sufficient time to develop and deliver training programs.
Furthermore, it’s important to “recognize that the most effective training may not come from outside sources. Tech-savvy employees within departments can be given the opportunity for more in-depth instruction to become expert resources for their fellow employees, Having a readily available support contact within an operational group reduces the ‘us vs. them’ dynamic that can poison the implementation process.

Plus Appoint an internal ERP product champion — and surround him or her with good people. “Do not rely on the vendor-appointed project manager only; have someone on your staff for this,” says Morris Tarbush, principal, the Tabush Group, a provider of managed IT services. Select someone within the organization, who knows or is comfortable managing software systems, to serve as the project manager,” he advises.

This person will be responsible for collecting all the end user requirements, learning the new system inside and out, working with the vendor on data conversion, coordinating training and acting as the point of contact for all employees.

 One of the most common mistakes made by companies during ERP implementation is spending significant time, energy and money selecting the right software and implementation partners, only to assign their own team to the program, This results in numerous issues during design and implementation, slow decision making and delays. While it’s difficult to free up your brightest resources from their full-time jobs, ERP implementations are not simple and they can be extremely expensive, So it’s important to “put your best people on the job. Not just your best IT people, your best people, period.

Companies that tend to struggle the most with ERP are the ones that lack upper management level involvement, Resources at the lower level tend to not be educated and engaged with the implementation project without senior level involvement, Executives don’t need to get to the point of knowing every single configuration detail.
Top Organizational change management is pivotal to the success of your project, Typical ERP projects facilitate massive change in organizations that can include changing of day to day job descriptions or eliminating job descriptions in total. changes impact the culture of your company and without careful control and communication plans and workshops you can create an adverse reaction to ERP resulting in barriers to implementation and adoption.

But they need to be aware of the issues that are causing delays to the project, becuase the misunderstant for the ERP impact on personnel, let’s not underestimate the impact a new ERP system will have on your personnel especially if they are not involved in the decision making process. 

Your employees have a detailed understanding of the requirements needed to assist them in performing their day-to-day job responsibilities and empowering those in the selection process will definitely help attain the commitment needed during the implementation process to achieve success.