Implementation of any new mechanism calls for change and with change new state of art techniques are adopted for optimum results. As new innovations are creeping in, business houses have adopted to these methods so that they can stay ahead in the rat race. One such method is Enterprise resource planning (ERP), with the help of which the organization incorporates a system of integrated applications to manage the business and automate many back office functions that are related to the technology, services and human resources.
Even after investing billions of dollars in ERP software many companies may find their processes “locked-down” and unchangeable which is unfortunate as these companies may be forgoing phenomenal opportunities to adjust and improve their organization setups with innovative, cloud enabled, mobile connected and ERP extensions available today. So it is advisable for CFO of the organization to study the entire setup, the needs of the organization before choosing ERP software for the Company.
Here are some tips which will aid in selecting ERP software for your Company:
1. Assess your business process: Where are we standing and where can we improve upon? These are the questions that can aid in deciding whether ERP software is beneficial and advantageous for you organization or not. These questions will aid in identifying current obstacles and the gaps in the business process.
- Does the industry’s specific requirements beyond ability of your present system
- Does lack of automated mechanism results in slow report writing thus preventing the company from making timely decisions
- Does productivity of the employees is lowered by current system
- Are your employees, partners and outside parties are able to access company data over web or other devices
- Is key information is available throughout the company easily
- Which process the company relies – manual, double entry or spread sheet
- What solutions your peers and competitors are adopting
Are you paying loads for manual reporting and auditors or are you struggling to adhere to industry specific compliance requirements.
Answer above questions using SWOT analysis (Strength, weakness, opportunities and threats) so that you can understand importance and benefits of return on investment through proper implementation of ERP solution.
2. Formulate selection criteria: The vital factor in evaluating and considering an ERP software purchase is the price. ERP is an investment that yields good returns to the company. You can opt for ERP by paying finance monthly and most providers will allow this. Main aspect is to make your business more powerful and efficient.
Other selection criteria can be:
- Total cost of ownership
- Server and operating system
- Features and Usability
- Proximity of the ERP seller
- Industry experience
- Experience ad capability of the vendor
3. Match the ERP solution with the requirement: Here is the where the game is all about. If you end up selecting ERP that does not matches with the requirement of the organization then your investment is waste. So it is the experienced vendor who understands your specific needs, budget allocation; tables most relevant options for your consideration and provides customized ERP solution that best suits your business needs.
4. Converse with each of your matches: Be open – minded and speak clear with the vendor. The first impression will provide lot of insight as whether the software provider prepared for discussion or did they have input of your company or did they research your company and understand your needs.
5. Shortlist your top selected solutions: Shortlist your top options based on the homework you have done. Though appears easy, this step is difficult as you are evaluating umpteen numbers of solutions and those solutions can significantly vary depending on your company size and industry. Make a chart of your choices and value it on Pros and Cons basis.
6. Schedule demo for your top selected solutions: Demonstration is the best thing to get to know about the software in detail. Some vendors prefer to give personal tour, while others prefer to give controls so that you can understand the solution.
7. Approach each vendor with questions: Selecting correct ERP vendor is as vital as selecting right ERP system. So it is vital to hold discussion with vendor regarding assessment on improving efficiency of business by reducing costs, increasing sales, improving competitiveness etc. Also ask yourself questions like Do we have trained personnel for implementing ERP? Are we prepared if something goes wrong? Do we have resources and know how to address it quickly? And so on
8. Compare proposals and check testimonials: It is vital to select ERP partner who is experienced and well versed with business challenges. Ask for testimonials of those firms whom the vendor has worked with. Verify where the company has been and where it is now. Also enquirer about real access to existing customers. ERP providers arrange for product tours for prospective clients with real customers.
9. Strike a nail: Finally make a decision based on above and also considering on cost of not implementing ERP. Though ERP have upfront costs it makes your business more efficient, intelligent and profitable.