5 QUESTIONS TO ASK YOURSELF DURING THE ERP SELECTION PROCESS

So, you’ve recognized that your current systems aren’t cutting it and you’re ready to start evaluating your ERP options.  Now what? With so many ERP vendors out there and a rapidly evolving technological landscape, choosing new enterprise software can be a daunting task.  Deploying an Enterprise Resource Planning (ERP) solution is a big investment, not just in terms of licensing dollars and implementation costs but also in terms of dedicated time and resources.  It’s important to clearly define strategy, requirements, priorities, and expectations before committing to a project in order to avoid project delays, poor user adoption, or worse, the wrong vendor selection.

Every organization is different.  Just as there’s no such thing as a one-size-fits-all ERP solution, there is no one-size-fits-all ERP selection process.  However, the five questions below are a good place to start your ERP selection and planning process.  By taking the time to answer these questions you will be more likely to select the right ERP solution for your business and successfully deploy it.

1. Why do you want to implement an ERP solution?

This is arguably the most important factor in your ERP selection process.  It is the need that causes you to cross the threshold of your ERP journey to actively seeking a solution.  It could be that your current solution lacks functionality or agility necessary to keep up with disruptive technologies.  Maybe you’ve outgrown your basic accounting system and need a more robust solution or are expecting major growth in the future and need a system that can rapidly scale.  Perhaps you need greater insight into your business and have decided to break down data silos or redundant manual processes by utilizing postmodern ERP and embracing the multi-cloud world.  No matter what your compelling reason for the change is, you must clearly define it and keep it in mind throughout the entire selection process.

2. What are your business requirements and priorities?

Defining and documenting your unique business requirements is integral to the success of the selection process.  This includes “nice-to-haves” as well as “deal-breaker” requirements, meaning this is a broader evaluation than those requirements outlined in the question above that prompted the need for an ERP solution.  Focus on features that will give you a step-up against the competition, are specific to your industry or sector, or would optimize business processes you are currently struggling with.

It’s important to note that you don’t necessarily need to find a solution that solves every single requirement.  Postmodern ERP solutions utilize modern technologies to achieve agility in the multi-cloud, meaning that a postmodern strategy can utilize best-in-breed solutions without sacrificing the stability of a suite-based ERP through pre-configured and API integrations.  For more information on developing a Postmodern ERP strategy download our free eBook, “Future-proof your Business with Postmodern ERP.

3. What are the expected benefits of a new system?

Speaking of strategy, outlining key benefits that you are expecting from a new system will be an integral part of your overall ERP strategy.  Determine what you want to achieve by upgrading your technology starting with the big picture.  Do you want greater control of your inventory? Do you want to ensure the security and reliability of your data?  Would mobile compatibility increase productivity?  Once you’ve outlined these goals for the new system, it’s time to prioritize them.  This will not only provide guidance throughout the selection and implementation processes but will also contribute to measuring success after the project.

4. What is the true cost of implementing an ERP system?

At first, investing in an ERP system can appear to be an expensive use of budget, time, and resources but, if handled correctly, the long-term benefits from these investments will outweigh the upfront costs.  Beyond initial licensing, customization, and implementation costs, the true cost of an ERP system can vary from vendor to vendor.

Most pricing models calculate the initial hardware infrastructure, software licensing expenses, and implementation costs but neglect to consider the impact of ongoing operating expenses.  The true cost of an ERP system can be calculated by subtracting the total cost of ownership (TCO) from your expected return on investment (ROI).  For a true analysis of all of your options, compare the true cost of each system under consideration and the cost of doing nothing.

5. What are your business goals?

The number one priority in choosing business technologies should be to find a solution that supports your business today and tomorrow.  So, your organization’s future plans should play a major role in your ERP strategy and selection.  With those goals in mind, how important is agility, flexibility, and scalability?  For example, is there a possibility for gradual or sudden growth?  Will you move into new markets and locations?  Will you expand internationally and need multi-language and/or multi-currency capabilities?

The average lifespan of an ERP solution is 5-10 years.  Before committing to a system ask yourself, will this system still serve your requirements in 5 years? In 10 years?  If not, you’ll need to review the cost/benefit analysis of a short-term solution.

Making an ERP Decision

As mentioned above, every organization is different which is why there’s no “catch-all” guide to the ERP selection process.  However, success and failure are often determined by perspective and support.  The key to successful ERP selection and implementation is understanding how your business may or may not change moving forward and investing in a solution that embraces that natural evolution.  The ERP selection decision shouldn’t be taken lightly as it’s one of the most important decisions your organization will ever make.  It will have a lasting impact on employees, customers, profitability, and growth.  Given the magnitude of such a project, you should do everything you can to mitigate risk.

Working with an expert partner that has extensive experience managing ERP implementations can also greatly enhance the end result, and reduce risk.  That partner should provide guidance, expertise, training, and support to ensure that you’re getting the most out of your investment.

Still not sure which solution is right for you? Our consultants have years of experience in ERP selection and are here to help you find the best solution for your business.

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