Choosing the right enterprise resource planning (ERP) software can be challenging. With much to consider, every part of your business needs to benefit from the rollout of ERP applications for the software to prove financially viable.
To help you decide on a suitable system for your business, we’ve put together this comprehensive guide on ERP software selection, covering everything from vendor comparison to the true cost of implementation. Use the links below to navigate or read on for the full guide.
- Why Your Business Needs ERP Software
- 7 Things to Consider When Choosing ERP Software
- 4 Steps to Selecting ERP Software
Implementing ERP software requires significant investment, but with that come benefits which can help improve, scale and unify your business. If you need a nudge through the door when it comes to employing ERP tech, the following should help make your decision easier.
The Benefits of ERP Software
- Governable IT spend – ERP software is designed to unify your processes and workflows, eliminating the need for multiple systems. This gives you far greater control and insight into IT resource, bringing significant cost savings and enhanced efficiency.
- Flexible modules for complete control – today’s ERP vendors offer a ‘pick and choose’ buying model whereby you decide on the applications needed for your business. This modular approach not only improves efficiency, but helps keep costs manageable.
- Standardised workflows and enhanced collaboration – implementing a singular system across all departments standardises processes and workflows, for total cross-team transparency. This unified approach also aids greater collaboration, streamlining processes and driving business growth.
- Value-added supply chain management – businesses which rely on physical manufacturing and production workflows stand to streamline their supply chain through the use of integrated ERP software. Improved responsiveness, procurement, and inventory management are just a small handful of the benefits ERP can bring for supply-chain-reliant organisations.
- Enhanced reporting – given business systems are unified, ERP affords superior visibility and insights, helping to improve reporting and long-term planning. With absolute clarity over how and where resource is being used, you can implement quantified changes which benefit your processes and bottom line.
These are just a handful of the benefits you can expect when implementing ERP software. Investing time in the ERP software selection process will ensure your business reaps genuine value from the technology.
Before we look at ERP vendors, it’s important you know what to look for when reviewing the specifications of different systems. Building a checklist of requirements will aid the ERP selection process, giving you simple touchstones on which to base your search.
To help you generate a list of requirements, here we look at seven things to consider when choosing ERP software.
- Functionality – what do you need from a system, and what functionalities can help achieve this? Requirements gathering is key to selecting the appropriate ERP software, ensuring that your business needs align with the functions of a particular system.
- Ease of use – how quickly can you get to grips with the software? And what kind of features does it offer to aid simple implementation and day-to-day use? Your ERP system should be intuitive and easy to use at every level of your business.
- Vendor security and reputation – investing in ERP software will likely mean a long-term partnership with a particular vendor, so ask yourself: are they reputable and secure? Read reviews, seek impartial advice and consider business credentials before deciding on a particular vendor.
- Technology – what features and technologies does your business require from its ERP suite, and can the vendor in question provide them? Examples of typical ERP features to look for include:
- Customisable features and modular flexibility – are you able to tailor the system to align with your goals and objectives? And how easy is it to implement such changes?
- Business-wide integration – can the system be easily implemented in all departments across your business? What benefits and changes will it mean for the core areas of your operation?
- Real-time operation and functions – are system processes visible in real-time, and what changes and adjustments can be made in response to problems, errors or opportunities which the system identifies?
- An intuitive and unified interface – a consistent look and feel can be hugely beneficial, aiding collaboration and ensuring that the system can be easily accessed by all levels of the business.
- Implementation – how straightforward is the implementation process, and when can you expect all system tools and features to be up and running? A smooth implementation process means you’ll see the benefits of the system sooner, facilitating prompt ROI. Be sure to enquire as to what assistance you can expect during implementation, as well as the in-house resource required for some stages of the process, e.g. migrating old systems and data.
- Training and support – does the vendor provide training provision to help your workforce get to grips with the system’s tools and features? And what kind of help and support can you expect from the vendor during the day-to-day operation of the software?
Further to this, does the vendor have demonstrable experience in your particular industry? And what expertise can you expect in terms of industry-specific support and implementation? For example, can they help you choose the modules and applications best suited to your business model and industry?
- Cost – cost will likely be your biggest consideration when assessing the viability and ROI of a given ERP system, so consider the following when pricing up individual software:
- Upfront/basic pricing – before you begin discussions with vendors, get an idea of the basic, upfront cost you can expect. You’re looking to attain a base price for system implementation, but bear in mind that there will be other, ongoing costs besides. By having a basic idea of cost, you can decide which vendors to approach whose services are within your ballpark.
- True cost – the ‘true cost’ of ERP software implementation refers to the long-term cost of acquisition and use. This includes the basic implementation cost, the long-term total cost of ownership (TCO), and the associated fees for licensing, maintenance, training, support and hosting.
Once you understand the true cost of a particular ERP system, consider how this stacks up against potential ROI; will the implementation of ERP software prove financially viable in the long term?
Selecting an ERP system can be overwhelming, with much to consider before you pull the trigger and make a purchase. To make things easier to manage, we’ve put together a simple four-step guide to the process, so you can make absolutely sure you’ve covered all the bases on your way to finding the right ERP system for your business.
Step 1: Requirements Gathering
The first stage in ERP software selection is to determine what your business needs and the features required to meet them. To draw up this checklist, consider the following:
- What are the limitations of your current systems, and what features would help fill the gaps and facilitate improved efficiency?
- What technologies are required by individual departments across your business? Draw up a ‘wish list’ of features for each area; you can cross-reference this with available vendor applications later.
- Get an honest overview of perceived business weaknesses from senior-level personnel. Such insights can be helpful when selecting modules and applications at the implementation stage.
- What transformations would you like to see across your business going forward? Consider how ERP software can help you achieve key business goals and objectives going forward.
Step 2: Comparing Vendors
Armed with your requirements checklist, it’s time to begin the process of comparing ERP software vendors. Here, stay mindful of both your requirements and the seven key considerations we listed in the section above; only then can you begin whittling down your prospective vendor list.
As a reminder, here are the key checklist items to clarify with vendors when assessing their feasibility:
- Do their features and products meet your technological and support requirements?
- Do the vendor’s applications align with your legacy systems? How might implementation affect data storage and migration?
- Does the vendor have experience and knowledge of your industry? Can they offer any specialist tools or expertise tailored to your sector?
Step 3: Demos, Evidence and Proof of Concept
When you’re closer to finding the right vendor and have approached a handful for preliminary discussions, you need to seek proof of concept. Can the vendor truly deliver the experience you want, while meeting your business requirements and objectives?
There are several ways a vendor can demonstrate their suitability for your business while showcasing their applications and knowledge, including:
- Detailed product demos
- A tailored technical demonstration, relating to how their service can benefit your current systems and workflows
- Testing of specific features and applications, to guarantee their feasibility and suitability
Step 4: Final Checks and Considerations
Before you sign on the dotted line, make absolutely sure the right decision is being made. Here are a handful of final checks to help you ascertain when it’s time to seal the deal:
- Financial viability – by now you should know the true cost of the ERP system you’re thinking of implementing, so crunch the numbers a final time to make sure you’ve accounted for everything.
- Departmental suitability – gather senior-level staff and key stakeholders to hear everyone’s take on the proposed technology. Does it fit the bill and is everyone happy to proceed with the implementation?
- Contract and terms – are you happy with the proposed contract terms and do they marry with your expectations? The negotiation stage is critical to the long-term success of your ERP software vendor partnership.
We hope this comprehensive guide to ERP software selection proves insightful. With wide industry knowledge of the myriad of ERP applications that exist in this highly competitive market, JS3 Global’s independent and impartial ERP selection consultants can assist any organisation to select and implement the most appropriate software applications to meet your business needs, reducing the time it takes to select the most appropriate software and eliminate the risk in selecting the wrong software applications for your business. For more information, visit the homepage or call us on +44(0)161 503 0866.