What You Need to Know Before Buying an ERP System

What You Need to Know Before Buying an ERP System

What You Need to Know Before Buying an ERP System

One of the most prudent things which behooves a business to be aware of before purchasing an Enterprise Resource Planning (ERP) system is that while such products have the potential to streamline processes and maximize efficiency by coordinating an organization’s disparate elements, they are no replacement for poor planning and ineffectual business strategy. Such systems only improve the efficacy of a particular enterprise when they are well-researched, thought out, and implemented in a manner that will make an organization as competitive as possible.

As a result, a new ERP system needs to be implemented only after your team has ascertained what exactly it requires i.e. your business’s overarching goals and objectives. With small-scale ERPs also requiring significant efforts in terms of configuration and implementation, it is sensible to thoroughly examine all your options, before you commit to a product of your choice.

Therefore, here are some variables that you and your team need to be mindful of, when embarking on your ERP software journey.

ERP Vendor Selection

Although there are several different criteria to consider when selecting a vendor, the selection process that is ideal involves having a vendor bring in its trainer, and not sales representative, for a live demonstration of components which are as similar to an enterprise as possible.

This way, organizations will be able to simulate their product while talking to a trainer who will be of continual use to a company, as opposed to a sales rep who is trying to expedite the sales process. Expect to pay for a trainer’s time, however, as any other company (which has previously purchased the vendor’s ERP) has already done.

An ERP software review or two may also go a long way in understanding whether an option is worth your while; although reviews may only provide a sneak-peek to the virtues and vices of any product, they can still reveal valuable insights, especially if the review has been made by someone who hails from a company that is of similar size and/or industry.

ERP Vendor Selection Team

Additionally, to determine the most advantageous ERP vendor it becomes necessary to have a team of as many employees (ideally from each of the respective departments that will be incorporated into the ERP) to voice the respective needs of the separate entities which the ERP solution will link. The involvement of these various employees will help organizations ascertain the full amount of benefits, features, and potential costs that such a system will enable. This team should be headed by a selection manager who acts as an intermediary between the vendor and the prospective enterprise.

Once your team has conducted a business needs assessment, it’s time to compare ERP vendors to observe which ones are capable of fulfilling your unique requirements. As elaborated above, inspect products from shortlisted vendors based on the capabilities your business requires, so software functionalities and business goals can be aligned together.

ERP Module Selection

In order to discern which particular modules will most effectively streamline the business processes of a particular company, it is oftentimes useful to sample the historical data of particular software functions to realize which functions of the ERP solution will grant the most readily accessible and important data. This method allows organizations to gain a degree of insight into the many modules and sub-modules and their specific forms and functions.

Another way of determining which modules will be necessary for your new ERP depends on which business units need to communicate with each other on an ongoing basis. For example, customer service and inventory teams constantly need to collaborate, in order to fulfil demands made by customers. Therefore, deploying and integrating CRM and inventory management modules will be very beneficial for teams residing in both departments, as many workflows can be automated to remove manual oversight, and reduce the likelihood of human errors. 

Most cloud-based ERP systems offer benefits surrounding integration that’s relatively less complex than on-site systems. Whether it’s a turnkey solution that has all the modules you need, or a third-party platform which needs to be connected, hosted ERP solutions can significantly streamline the implementation phase.

Utilitarian Concerns for ERP

Standard utilitarian concerns for an ERP system include ease of use, integration/implementation time to get the system operating, quality of literature and training regarding the product, as well as scalability and potential for growth. All of these factors should be researched with a particular vendor to determine if its product will truly be useful in a timely manner.

Another important factor to consider during the configuration process of your new ERP system is the migration of data from existing ERP systems or databases, and into your new platform. Ensuring data is migrated correctly is highly crucial, as problems can cause data to get corrupted - and therefore unusable. In turn, this will also affect the overall performance of your new ERP software, as a lack of clean data can render poor results, both for operational duties as well as analytics. 

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