5 Important Criteria for ERP Selection
Selecting the right ERP solution for your organization is a crucial task. It requires the right team with the right knowledge of your business requirements and enterprise value. Only then you will be able to select the right ERP vendor to provide you the right ERP solution to increase productivity, improve efficiency, and cut operational costs.Having strong knowledge about the business and its specific needs is an absolute necessity before shortlisting vendors or listing ERP application.
1. Assess Your Business Needs:
Make a precise assessment of the business needs of your organization before you opt for an ERP package. Sit with your technology and resource management teams to garner facts on the company’s growth goals, efficiency goals and speed-to-market goals. Growth goals may vary from company to company. While some companies may target at a quarterly growth of 40%, some others may aim at doubling their business returns by the next financial year. Certainly, the choice of ERP tool for improved business efficiency will also be different.
If you are planning to have a market-ready product by the end of next quarter, look for an ERP solution that will lend it the required competency advantage. You will need something that speeds up the processes and meets all business requirements, before your competitors grab the eye balls.
You also need to have a clear idea on what tools you need. List down all the areas that needs improvement and find out if you need reporting tools, tools for cost saving and control, and energy-efficient tools.
Assessing the functional requirements of your business is one of the most critical factors for ERP selection. To get a clear idea of the functional requirements, talk to all the stakeholders in the business. Have meetings or discussions, to understand their needs, ask for their opinion, do a survey, and come up with a business requirement plan. The plan needs to be reviewed by the core teams of the company and rectified, if required.
If you are a first-time buyer of ERP solution, factors like ease of implementation, ease of use, legacy issues, and cost are some of the factors that will rock your boat. For an established business enterprise, growth potential, quality of documentation, support services offered by reseller, and customization are matters of concern.
3. ERP Vendor Culture:
Make your entrepreneurial culture find the right cultural fit in the ERP vendor you opt for. If you are a small solicitor firm comprising of 12-14 company law advocates, go for an ERP vendor which understands your business needs and organizational culture. If are a large accounting firm with more than 5000 employees, opt for a vendor with a proven field record in customized ERP solutions for speeding up your business process, requiring minimal supervision and attention. Always remember that one-size-fits-all idea is unworkable, in most cases.
When choosing an ERP vendor, find out about the application areas they cover, subscriber base, implementation strategy, customer feedback, and support services. And if one vendor does not meet your business requirements, do not hesitate to go for another one. Never compromise on the choice of vendor. It may take a while to make the right selection, but the wait is worth it.
4. Appoint a Selection Team:
Having a winning team means half the battle is won. Form a team composed of skilled resources that have a thorough understanding of the business process, end-to-end. Also involve tech savvy people and people from different organizational levels, (such as VPs, managers, and even office clerks), ask them to answer to one-on-one questionnaires and have group discussions. Only then you will get a holistic picture of your organizational needs as well as efficiency of your resource pool. To cut the long story short, now youcan assess your business abilities and, accordingly come up with a plan for improved business efficiency. Having a strong selection team for ERP implementation is beneficial both way: you get what you need (not paying extra bucks for the lure of unnecessary tools and processes) and you are able to add better business value to your product.
5. Budget and Resource Constraints:
Last, but not least, expense of software implantation is one of the most important selection criteria for ERP selection. Take note of the ongoing costs as well as up front expenses, before making a choice. Make an accurate assessment of your business needs and calculate the expected ROI.
Select an ERP solution that is a fit for your business needs. Going for an expensive application package that offers lots of complex functions may be suitable for a business process with multi-tasking activities, not you. Buy an ERP solution that needs your very basic (and most important) business requirements and plan for customization later, as and when required.
After considering the above mentioned selection criteria for ERP selection, you will have clarity of what you want for business process improvement. Once you have made a resource planning, and with your vendor checklist ready, ERP implementation is nothing more than a cake walk.
Watch out this space for more updates on ERP implementation strategy.