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  • Writer's pictureOperations Rx

ERP Software Selection & How to pick the right one for you

Simple Solutions for a Complex World.

I’m betting you’re considering ERP software because you desire to better manage supply chains, inventory, and customer relationships.

I’m also betting a significant portion of your time is spent doing necessary yet seemingly trivial tasks that don’t add value:

  1. Entering data manually

  2. Retrieving data that’s siloed from complementary data

  3. Enduring inefficient inter-departmental workflow or reporting

You know many of these routine chores can be handled much more rapidly and efficiently by integrated software systems.

It’s why you’re considering ERP.

These systems can automate business processes and make managing your business more efficient and profitable. However, ERP systems can also be costly, difficult to integrate, and challenging in terms of measuring ROI.

Selecting the Right ERP Software

Selecting the right product and the right vendor hinges on intimately understanding your organization’s needs and appropriately evaluating competing systems side by side.

Here are six things to consider that can help you make a more intelligent decision:

#1 Objectives & Requirements

Why exactly are you interested in an ERP system? What problem are you trying to solve?

Outlining ultra-specific objectives will help you identify narrow requirements ERP software must meet to be purchased. To avoid being influenced by vendor marketing, you might consider listing your requirements before you begin researching options.

#2 Measuring ROI

When you begin researching ERP options you’ll notice no shortage of warnings regarding how difficult it is to measure ERP ROI. Fortunately, clearly articulating ultra-specific goals as you have already done will help.

You might measure ERP performance by:

  1. Reduce headcount by X% in Y(months)

  2. Increases employee productivity by X% in Y(months)

  3. Reduce inventory by X% that results in Y accounting improvement

  4. Increase customer touches by X times that increases lifetime value by Y(amount)

  5. Improve accuracy of manufacturing cost quotes by X% in Y(months)

#3 Demystify the Demo

You’re ready to see software demonstrations.

You may want to provide a demo script that outlines specific functions, workflows, or features you expect to see during the demo. You might feel as if directing the demo with precision will save time and help you better determine whether the software meets your goals.

An alternative approach is to simply provide the vendors with a goal and see how they respond…

The demo you receive can be extremely revealing in terms of what kind of partner the vendor will be over the long-haul regarding implementation, customization, and support.

#4 Checking References

Realizing you’re not likely to call nor get cooperation from a direct competitor, it may be helpful to speak with a reference that has similar goals to yours & can answer questions like:

  1. Which promises were kept?

  2. Which promises were broken?

  3. What surprised you about the vendor/product?

  4. What doesn’t the product do that you were told it would?

  5. Are you paying for modules/ tools you don’t need?

  6. Which deadlines were met & which weren’t?

  7. Were there additional or surprise costs?

  8. What mistakes did you make or wish you knew about prior?

#5 Get the Real Price

To select the right solution for your business, understand exactly how much the project will cost at each stage:

  1. Cloud vs On-Premise

  2. Version-less vs Upgrade

  3. Upfront cost

  4. Maintenance

  5. Support

  6. Recurring costs

Having a thorough discussion about price can prevent future surprises and disappointment. It can also help you shape a contract both parties can be happy with.

#6 Gauge Vendor Viability

As the enterprise software space consolidates, companies may not wish to support all of the products they acquire in perpetuity. Acquirers may choose to sunset a specific product or notify customers it will no longer support a product after a certain date.

This is a risk to anyone considering ERP software must be concerned with.

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