Are you looking to purchase a new system for your Enterprise Resource Planning? You will agree with us when we say that it is indeed a tiresome process. You might have done the primary research on your end.
But this might be quite confusing with the plethora of ERP software available in the market these days. With the below ERP selection process steps, you can simply choose the right ERP system for your company.
Choosing the right ERP software can help you increase the productivity of your workforce apart from improving organization operations. Allow us to reduce your confusion in making the right choice and ease your task of selecting an ERP system for your organization.
Before investing your money in ERP software, time, and effort into getting a new system for your organization, note down the reasons why you want a new system in place. This can be summed up with the following points;
- Your existing ERP system is falling short of your current or future goals
- The software is not meeting your requirements
- The current software is not fulfilling its purpose, i.e. reducing the manual workload or documenting the operations
- Your customers are complaining as your efficiency is reduced due to the shortcomings of existing ERP software
- Your competitors are getting ahead of you
- It is costing a lot to maintain your current ERP system
What Should Consider When You Selecting ERP for Your Business for the First Time?
Those who are selecting an ERP system for the first time can check out the below points to reap the most out of it;
- Your workforce is increasing and you don’t have any solid system in place to manage this.
- You don’t have any documentation of your business operations
- There are certain tasks that can be done with the help of software and is unnecessarily occupying your workforce
- It’s difficult to manage the resource allocation in various projects
- It’s tasking to manage the client’s requirements with proper documentation due to a lack of record-keeping
- Your customers are not satisfied due to delays from your end
- Your competitors are getting ahead due to a better system implementation
If you are going through the above-mentioned things, then you have landed at the right place to select a new ERP system for your organization.
ERP Selection Process Steps: Choosing the Right ERP for your Organization
Below is a point-wise ERP selection process steps guide to help you walk through the things to be kept in mind while ERP selection for your company.
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Decide your budget and requirements
Each business is different and so there is no one fit for all. Thus it is necessary to call forth all the departments in your organization for knowing their individual requirements. After a detailed discussion on this, you should finalize the budget that you want to spend on the new system.
After deciding on a budget and noting the requirements, the next thing that you should do is come up with a strategic plan. The assembled team should prepare a basic outline of the ERP software which will help the project team to understand what they will be doing. You can keep adding more details to the ERP selection process later on as your goals become clearer.
Make a detailed list of how the new implementation will affect the existing system in terms of improving its efficiency. Compare the various options available online keeping in mind your organization’s requirements, size, budget, modules, and other things.
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Educating the workforce and deciding the features of ERP
It is quite necessary that your whole team stays on the same page when it comes to understanding the ERP selection process. Take steps to educate your team on how the new ERP implementation will benefit the current process in improving efficiency.
Provide basic training in a general ERP system that will make the transition simple and fast. There are various tools and video tutorials available on the internet for training purposes. Make the best use of these materials.
In this phase, you can categorize your requirement list in detail as;
- Critical features that must be present
- Features that are highly desirable in the ERP software
- The features that you need in the future
- The tools that are good to have but not necessarily needed
This segregation will take you a step closer to making an informed decision for the ERP selection process. You can eliminate as many tools and features that might seem good to have but might not be utterly necessary.
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Deciding whether to implement on Cloud or on-premise
The next step is to decide whether you want on-premise ERP implementation or want to deploy it on the cloud. Both of these options have their own pros and cons which are as follows:
Benefits of Cloud-based ERP software
- Ease of deploying with your existing system as the infrastructure is already available
- Based on monthly packages, so you get control over the cash flow
- Easily scalable without much hassle to fit the increasing or decreasing workforce
- Ease of maintenance as everything is taken care of by the ERP solution provider
- Reliable and robust as the data is stored over multiple servers
Disadvantages of Cloud-based ERP System
- There is no customization when you choose to implement ERP on the cloud.
- As the system is implemented on the cloud, the cumulative charge will be more than the one deployed on the premises.
- Data security is the biggest issue that might come when implementing on the cloud as the data is accessible through the web.
Benefits of On-premise ERP software
- You can easily modify the software as per your specific requirements suiting your niche market
- You have full control over the whole system
- The data is more secure and you can safeguard the information in a better way
- The overall implementation cost is lower when considered cumulatively.
Disadvantages of On-Premise ERP system
- Customizing can adversely affect the implementation time which results in delayed operation
- If the organization fails in protecting data properly, a lot is at stake.
The features offered by both the above-mentioned solutions are more or less the same. The difference is just in the way they are implemented. Striking the right chord for deciding this depends a lot on your business requirements and budget. Weigh the advantages and disadvantages of both with your team and then decide upon one.
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Know what your peers use
Knowing what your peers use can do a lot to help you with the ERP selection process. Talk to those who are in the same business as yours and know which system they have in place. There are several websites related to your area of business operation that might be helpful. You can also consult government bodies, publications, market case studies, or several boards functioning to get the right information.
After knowing the details in-depth, you can make a list of the ERP providers that fit all the above-mentioned criteria. Once this is done, an easy path is set for you, and all you have to do is call the providers and finalize the right one!
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Shortlisting and Contacting
After making a list of the ones that best suit your requirements, you can ask these providers for proposals. Share all the details of your requirements so that they can draft the correct proposal.
Make sure that they provide an all-inclusive cost and not just for the initial setup. This must include the cost of migrating existing data, training, support, and any other on-going costs.
Still, confused? Don’t worry, you are just a call away from getting in contact with the right people. SoftwareSuggest can help you with finding the right ERP solution providers for your business, contacting them, and getting the right proposal tailor-made for you.
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Inspection and site visits
Be open to accepting requests from certain service providers who want to come in for a site visit. Having a closer look at your business setup, they might be able to suggest any additional features or needs that are not already on your requirement list.
You can organize a bidder’s conference where all the shortlist vendors can come and take a tour of the facility at the same time. This saves time as well as is fair to all the vendors.
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Schedule a Demo
Schedule a product demo with the shortlisted vendors. It would be best if you control the demo. Prepare a list of functionalities and features that you want to be included and that which is crucial for business.
Include users from all the departments who will be using the ERP system. It is imperative that they get to know the look and feel of the system, its usability, and functionality.
Every demonstrator has his or her own way of presenting the demo. The most important thing is not to get carried away by some attractive features which will serve your organization no purpose. If it is there doesn’t mean you have to buy it.
A demo is not a competition among various vendors but a test of whether the product meets your needs.
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Talk to references
Get in touch and talk to companies that are currently using the software for their business. Companies that are of the same size, similar industry, and which are facing issues similar to you.
Ask them about the software, its functionality, usability, and how effective it is for business. Ask them if it solved the problem they were facing and value for money.
Also, inquire about the quality of training and support offered and if they would have to start over again, what is it that they would like to do differently. It is always better to have direct information from existing users of the ERP software.
Get to know the challenges, shortcomings, and successes that they faced during the implementation and how was the support during that phase.
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Choose, Negotiate and Implement
Keep in mind that the buying decision, in the end, is always vested in you. It is a matter of cost, value for money, and the probability of success. If the product proposal is within your budget and meets your business requirements, then you’ve been embraced by the goddess of luck!
But if you come across the best solution and it overshoots your budget then you have some tough decisions to make.
Don’t compromise on some functionalities, training, and support in order to save money. A little expenditure might save or earn you a fortune later.
Summing it Up
While choosing the right ERP software for your business it is important to keep in mind the cost of the whole system, the software as well as the training and support, for a definite period of time. At times, the cost of the software support is as much as the cost of the software itself. Cloud systems have a lesser initial cost but a higher support cost. It is therefore important to consider all the options of an ERP system before fixing on one.
Hitendra is the Digital Marketing Executive and Content Analyst at SoftwareSuggest and loves helping people plan, optimize and launch marketing & content strategies. While digital marketing is his primary job function by day, hitendra also enjoys spending time with his family and listening to music.
