What is a good ERP System?
A good ERP software/ system should address every part of the business. In today’s time, there are countless Enterprise resource planning/ management solutions available but the challenge is choosing the one that fits all the organization’s needs.
Selecting the right ERP software can be challenging unless one opts for expert advice.
ERP Selection Criteria?
Yes ERP selection criteria is the process of deciding whether a particular ERP system matches the business needs or not.
Selecting an ERP system is not an easy or small task. It is intensive, time-consuming, and requires collaboration from various members of the team.
Top ERP Selection Criteria:
Pre-selection ERP Criteria:
1. Requirement Gathering
2. Vendor Viability
3. Technology
4. Costs
5. Support and training
6. Industry Expert
Post-Selection ERP Tips:
1. Implementation
2. Risk Mitigation
3. Scalability
4. Post live Tools
Let's discuss all the factors in detail.
Pre-selection ERP Criteria:
1. Requirement Gathering and System functionality:
The standard question in ERP selection is going to be: What system functionalities and requirements is the organization looking for? What degree of user-friendliness is required?
Answering these questions will help you decide if the ERP solution is a perfect fit for your business or not.
This can be the most lengthy and complex decision in your ERP evaluation and selection process.
Here are some parameters to look for Gather requirement, Process automation, end-users.
- Gathering Requirements:
Consider which of the current organizational challenges could be solved or recued by opting for an ERP system.
- Business Process Automation:
Think of all the manual processes at your organization that can be automated using ERP system.
- Examine End-users:
How much tech-savvy is your end user? Are they able to navigate through complex workflows and features?
Plan for Integrated System:
Does your organization have multiple departments that use different systems? Can the selected ERP system bring all departments under a centralized system?
2. Vendor Viability:
It is always advisable to check the vendor’s reputation and trustworthiness before investing in the ERP system. One should also take into consideration the options for future scalability to determine if the system is suitable for long-term usage.
The general idea is to check for Credibility, product viability, and scalability.
The following Main factors can be looked at before finalizing the vendor:
- Check Credibility:
How the organization has evolved, growth plans, age, and financial health to be taken into consideration.
- Product viability:
Seek customer references, how long have they planned to keep the product running, distribute or update it.
- Scalability:
Does the company have the potential to expand in foreign markets?
3. Technology:
There is a simple question to ask: What technology is the system offering and what technology does the business require?
Check for customization, requirements, and value.
- Customization:
Determine whether the solution meets the technical needs of the organization and processes. If not customization is needed to complete the request.
- Requirements:
Does the selected solution help in meeting the technical needs of the organization?
- Value:
Check that the selected ERP system is not going to be outdated in the near while.
4. Costs:
Cost is an important factor to take into account. Before committing to any solution it is better to calculate an estimated ROI.
Consider the following factors basic price, true cost and ROI.
- Basic Pricing information:
Whether the pricing factor of platform really worth paying for? If not, there are plenty more ERP systems to evaluate.
- True costs:
Try to estimate the true cost by taking into account the long-term ownership cost and benefits of the ERP.
- ROI:
Estimate the RIO and it should exceed the long-term ownership costs.
5. Support and training:
Support and training are important pieces of the system. It can include training videos, documentation, recorded videos or in-personal training.
Think of the following factors, type of training and costs.
Type of training:
Consider the needs of end users and the sort of training that would be required for training.
Costs:
Is the cost of training and support included or there would be a separate charge for it?
6. Industry Expert
There are various invisible competitive advantages of choosing an industry leader which are sometimes not available to others.
Has the vendor served a particular industry for long and proven itself successful compared to competitors?
Post-Selection ERP Tips:
1. Implementation:
After the selection of an ERP system, there is a need to make sure that there is proper implementation.
Here are the things to take care finding an ideal software, planning, data transfer, training the users, conducting test launches, and post-launch tasks.
2. Risk Mitigation:
Investing in an ERP system can be risky as it requires budget allocations, provisioning for hidden costs, learning new and complex functionalities, and training for using systems effectively.
3. Scalability:
Companies usually scale up and down as the years pass by and that is one of the reasons why ERP systems are scalable as they offer more facilities to manage employees, manufacturing, and other resources of daily use. Take the next 10 years into consideration for your scalability needs.
4. Post live Tools:
Look that their support is reliable and that they would be providing you with support services when required. For any errors or problems, there should be support services in order to maintain smooth functionality.
Conclusion
Conducting ERP selection is a difficult process but by following the pre and post-selection criteria one is able to take into account various factors and take the best ERP into consideration for purchase.
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What are your thoughts on ERP selections, do let us know in the comments.
ERP Selection Criteria infographic:
The ERP selection criteria infographic will describe both the Pre-selection ERP Criteria and Post-Selection ERP Tips for optimum decision making.
Frequently Asked Questions on ERP Selection Criteria:
Here are the top 10 ERP selection criteria:
Requirement Gathering and System functionality
- Vendor Viability
- Technology
- Costs
- Support and training
- Industry Expert
- Implementation
- Risk Mitigation
- Scalability
- Post live Tools
The most important criteria for selecting ERP vendors are pricing, implementation time, level of support, training, system upgrades, projects handled and Customer’s reference.
There are 4 most common ERP implementation strategies:
1- Big bang Software launch
2- Phased Software Deployment
3-Parallel Software Deployment
4-Hybrid Software Deployment Approach