2023 Enterprise Resource Planning (ERP) Software Buyer's Guide
As your company grows, you’re amassing valuable data that will help you evaluate the current state of your company and predict and plan accurately for your future business success. To make the most of your business data, you need a system that helps your securely store, analyze, and use all of your important business information.
Enterprise Resource Planning (ERP) solutions have been in use in the manufacturing industry for decades, but they’ve evolved significantly over the past few years as more companies look for a reliable solution for managing and effectively using all the data that shapes their business.
What are the Top ERP Benefits and Features?
ERP solutions provide the tools that you need to access your data, create reports, and analyze important details about your business in one centralized system. ERP systems can help improve and streamline your business in many ways, including:
- Customer Service
- Data Security and Integrity
One of the key benefits of modern ERP systems is data flexibility, which makes it easier for more people to use business data to not only create reports and track operations, but also make important decisions for the future of the company.
While ERP solutions have been around for decades in the manufacturing industry, companies in other industries are beginning to realize the drastic benefits of centralizing and organizing all the important data related to their business and growth strategies across all business departments such as:
- Human Resources
- Relationship Management
- Supply Chain Management
Which ERP Trends You Should Watch in 2023
Business trends and software trends have a symbiotic relationship much of the time, innovation in one area always drives change in the other. To stay current and competitive in your industry by embracing all the best tools for your business, you should regularly study trends surrounding the software solutions you use in your company.
ERP solutions are rapidly gaining popularity across all types of companies and industries, and as a result, the technology that powers ERP systems is transforming to fit all the changing and growing needs of unique businesses. Cloud ERP is growing more quickly than many other hosted software solutions and this trend toward the cloud will continue in 2023 and beyond as more companies realize the benefits of ERP (and can afford the technology).
AI and machine learning are two technologies that are appearing more and more in mainstream technology, and they could play a role quote soon in making ERP solutions more interactive and immersive for users, as well as facilitate further automation opportunities. While intelligent ERP is in its early phases, advancements in this area of technology could revolutionize how you make sales predations for your upcoming business year and monitor and learn from ongoing trends that develop.
How to Choose the Best ERP Software
ERP solutions are quite powerful and can bring immense benefits to your business, but they are one of the most complex software solutions on the market as well, which makes both selecting and implementing ERP more difficult than many other business software solutions.
This guide will provide insight and tools for selecting the best ERP solution for your company.
How to Conduct an ERP Business Review
ERP implementations can be more complex than other business software solutions, so planning and preparation is key to your successful implementation. So, before you select your ERP solution, it is a great idea to make a list of the specific business needs that are driving your decision to implement a new system or upgrade your existing one. Thinking about the manual data barriers or other issues that may be holding your business back will help you gain insight into just how different ERP solutions will best fulfill your needs and help you meet your goals.
Many companies find it helpful to include company leaders and key partners in their decision-making process of choosing an ERP. You can include key people in your business in your selection and planning process to make sure that all of your important needs are accounted for and your solution contains all the features and tools you must have.
What Questions Can You Ask to Guide Your ERP Business Review?
- What data gaps occur consistently, and what is their impact on your company?
- Are your existing processes, tools, and systems outdated and cumbersome for employees?
- Are the costs of operating your existing manual processes or outdated technology outweighing the benefits you receive?
- What tools and features are must-haves for our company? Which features aren’t as vital?
- How tech savvy are the employees who will use the system most?
- What deployment method makes the most sense for our business and budget?
- How many people will use your ERP system?
How to Build Your ERP Budget
After you’ve conducted a complete review of your business needs and have a strong understanding of your ERP requirements, it is important to figure out the budget you can allocate toward purchasing or upgrading your system.
According to Panorama, 61 percent of ERP implementations take longer than expected and 74 percent of projects exceed their intended budget.
This is typically due to lack of planning. If you have each piece of your ERP implementation mapped out carefully, and understand what goes into every aspect of integrating all your data sources with your ERP, then you’ll experience less delays and avoid costly surprises or issues during your implementation process.
Using the list you prepared while reviewing your business needs, you can determine how much value will be created by using an ERP system, and prepare your budget accordingly. You should give yourself spending limit as well as a range of pricing models including one-time installation costs or monthly fees. Depending on the size and needs of your company, one type of plan may make more sense financially over the other.
Because ERP implementations are more complex and time-consuming, you may also want to consider adding a project manager into your project and budget for their services to keep you on track and organized in your implementation.
How to Determine Which Type of ERP Technology Will Best Suit Your Needs
ERP vendors typically offer an array of different technologies and deployment methods to best meet the size, budget, and needs of your company. While cloud solutions are swiftly gaining popularity, particularly among small and medium companies, larger business still often choose to go with an on-site solution, so they can create a more customized and proprietary solution. Here’s a closer look at the main ERP technology options available on the market:
Cloud-based technology is becoming increasingly popular for all types of business software, and ERP is no exception. Cloud technology functions through a third-party platform that is powered by the internet, which supports business mobility and remote system access that a flourishing company needs. Cloud ERP systems are also more affordable, which gives more companies the opportunity to embrace an ERP earlier in their business.
On-premise, or on-site ERP solutions are systems that are built on-site in an office building or other physical location. On-premise ERP solutions require hardware and ongoing updates and maintenance, which makes implementation more expensive than cloud solutions.
How to Think About the People in Your Company Who will be Using Your ERP System
For your ERP solution to be a success in your business, your employees will need to embrace it and use it to its full potential. If your system is cumbersome or confusing, many employees may become frustrated and not use it as much as they should. This can hinder your growth, so it’s important to pick an ERP that suits the needs of everyone who will using it.
As you think about the ERP users in your company, think over these questions to find the best fit for your teams:
- How many users will be using the ERP system?
- What data sources need to be integrated with this system? Will it interrupt day to day business for my teams?
- What levels exist in your users? (Basic, Intermediate, Advanced)
- What are the needs of each group of users?
- What type of support will users need as they learn and use and maximize the potential in your ERP?
- What training will my employees need?
How to Determine Which Features and Tools Your ERP Solution Must Offer
Your business needs, users, and budget will all work together to help you choose the best ERP system for your business, but there are some core features offered by most ERP vendors, either in separate modules or as part of the overall system, that you will want to consider according to your unique business needs.
ERP systems include modules complete with tools for:
- Manufacturing Management
- Inventory Management
- Financial Management
- HR Management
- Supply Chain Management
What to Look for in Your Perfect ERP Provider
As you meet with various ERP system providers that you’re interested in working with, you should do some due diligence in researching their reputation before you commit to purchasing their services. Some of the key things you should look for in your perfect ERP provider are prominence, reviews, and support.
Industry prominence and popularity
While you should not choose an ERP provider based on popularity alone, a vendor’s standing in the industry can signal what you can expect from their services. Make sure that the provider you select has prominence in the industry and is popular among other companies with similar needs as yours.
Reviews from current or past system users
One of the best ways you can easily research an ERP provider you’re considering is to look for reviews given by current or past users. Reviews from current companies using the ERP can give you great insight into how the provider treats customers and how companies value their services and features. Past reviews can establish a history of service values and give you a snapshot into how the provider handles business over time as well.
ERP system support offered
Support is a vital component that all ERP system providers will offer. However, the types and degree of support will vary from provider to provider, so make sure you know what level of support your team will need, and then ensure your selected ERP vendor can easily fulfil those support needs.
How to Plan Your ERP Integrations and Customizations
The nature of ERP implementation is complex because it involves integrating all your different data sources into your centralized system. If you know where all of your current data exists and how your system operates, you will be able to implement your solution with much more ease.
You should also consider what customizations you want to do on your ERP before you buy and implement as well. Customizations are what will tailor-fit your solution to your company’s needs.
Panorama recommends customizations be performed on 10 to 20 percent of an ERP system.
Choose a time when data migration will not impact your core business hours or seasons, if possible. During your integration, some data sources may not be accessible for short periods of time, or may not contain complete data for analysis. Choosing a time when your company is not as busy can help you avoid the negative impacts of the system downtime that is part of switching all your data sources into your ERP solution.
How to Understand the Hardware Needs of Your ERP System
If you choose to implement a cloud-based or hosted ERP solution, then you will not require any hardware to get your ERP up and running quickly. But you’ll need to carefully consider all your integration points and know how ERP will tie into your other business systems to fully understand any hardware you may need.
However, if you’re going to be implementing an ERP solution on site, you’ll need to plan on investing upfront for hardware, installation, and ongoing maintenance on your system.
How to Research and Compare Multiple ERP Providers
Once you have a firm grasp on all the things you need and want from your ERP, and understand what you must invest, then you can begin researching and comparing ERP vendors.
There are many excellent ERP providers on the market, and you’ll undoubtedly be able to find your perfect system if you take a bit of time to really look into what each vendor offers and compare your top choices against one another to determine which is best for you and your business. As you compare your options, make sure to keep your list of key business needs and required features handy so you can reference them and keep yourself on track as you absorb all of the information and create a short list of viable ERP options.
How to Set up Demos and Get Pricing from ERP Providers on Your Short List
Once you’ve created a short list of three to five ERP vendors that you’re interested in implementing, it’s important to take your preparation and research one step further and get in touch with each one. Most providers will happily set up meetings to discuss your ERP needs and requirements and can demonstrate all the key features for you.
Before you participate in a meeting or demo with an ERP provider, make sure that you refresh your memory on all your business and feature needs. It is also a great idea to provide your lists to the vendor prior to meeting, so they can put together the custom options and pricing they have available that will meet your needs. This will make your time much more efficient, and also give the vendor a clear understanding of exactly what you require.