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How to Choose the Right Enterprise (ERP) System?

Have you decided to get an ERP system? As with any important business decision, start by defining your goals and expectations and by involving the key stakeholders who may benefit the most from successful implementation (or who have the most to lose if problems arise). Once you are done, you can start comparing the offers that are suitable for your business.

You can either decide to make the choice yourself or you can get advice from a consultant, who will help you evaluate your options and draw up a more detailed RFQ. When working with an external consultant, however, keep in mind that some consultants may only specialise in working with a single or only a few preferred ERP providers.

Once you have shortlisted your potential ERP providers, create a system implementation checklist and ask the individual providers specific questions about technical support, troubleshooting, and costs. These include, for example:

The time frame. How long will the implementation take? What is the detailed plan? What resources do we need to provide and when? How are business disruptions minimised and when can they occur?

Customisation. To what extent can the system be customised to our needs? Where are the customisations needed and where can we use the modules, reports, or other resources previously created for our industry by the provider? Does the provider understand what makes our processes and requirements truly unique?

Project management. How will the provider manage our project? Do we get an experienced contact person? Who from our team will be involved in the implementation? How will the provider help us monitor progress? Who do we call in the event of problems? How quick is the provider to respond?

Usability. User acceptance is a fundamental element of a successful deployment of an ERP. Find out how intuitive and easy the application is to use in different roles.

Subscription costs. How are costs structured into the subscription setup? What are the advance costs and monthly payments and how does the contract address changes (e.g. increased use)?

Project costs. Can our implementation result in additional costs? In which areas are increased costs most common?

Data migration. What should we know about migrating our existing data? Are we and the ERP provider aligned as regards our views of the complexity of migrating data from legacy systems, data cleansing, eliminating redundant or obsolete data, etc.?

Updates and maintenance. How do we make any post-implementation changes in the ERP system? What is the procedure for adding new features, changing the number of users, customising new reports, and other modifications? What changes will we be able to make? Can we, for example, create new reports and queries? Which activities will require assistance from the provider, a professional consultant, or a programmer?

Platform flexibility. Does the vendor offer system customisation programming tools? Is there a strong community of partners offering additional sector- or industry-specific applications and ready integration with other applications?

Training. What training is required and what is the cost? Is training updated and extended?

Request a thorough demonstration in order for your team to test the system, explore its capabilities, and get a better idea of what it would be like to actually use the system in practice.

Remember to request references from companies similar to yours that have implemented the same software and take the time to review these references carefully. Do not hesitate to ask about details – what happens if there is a problem? How does the company address user support? How well does the software work? Focus on how much time the employees need to get used to the software and the interface and to see the added value of the selected system.

How do you create the business case for ERP system procurement?

Before investing in an ERP system, you should make sure the system will deliver. Preparing what is called a “business case” can help you with this exercise. It is an estimate that informs you about the costs and functionalities of the ERP system, whether in pure financial terms or in the form of a verbal assessment, to help you weigh the deliverables against the implementation costs and risks. It will help you adjust the qualified estimate and your view of which ERP system to choose and what benefits it delivers. This will give you a clearer internal view of what you expect from the ERP and it can help you in the implementation phase.

In order to create a business case for an ERP, start with the problems you need to address, and proceed with the benefits you seek to achieve. You can expect that some of these benefits will become apparent quite soon – for example, shutting down servers and avoiding software updates you no longer need. Other benefits may take longer, such as a 10–20% productivity increase after all the employees have completed their training and been tested and after all the automated workflows you envisage have been implemented.

Be careful and realistic in quantifying the costs, including those of planning, implementation, and training.

Decades ago, ERP systems were primarily intended for the largest corporation and their implementation was complex. However, a lot has changed. ERP systems have proved themselves and are easier to administer. It is now easier to estimate the total cost of not only the implementation but also the maintenance of your systems. With thorough advance preparation for ERP system selection, its procurement will become one of the most effective steps you can take to increase your competitiveness!

If you are unsure, contact us for advice!

Source: NetSuite Oracle