Whether businesses are looking into a first-time ERP implementation or to replace their current system with a more advanced version, there are some precautions to take when asking which option would be best. These five questions are important when deciding which ERP system will best meet the needs of the company.
1. How large is the company?
Each company has a different revenue stream, meaning that they'll also have different resources to work with. Smaller companies may have fewer users, whereas a larger system breaks down processes into parts, according to SYS-CON Media. Multitasking inventory transactions and stock checking can be done on one screen for warehouse management. Small businesses with up to $20 million in revenue typically do business with Tier 3 providers, who provide software to many different industries. These considerations should be taken into account before a new system is implemented.
2. How much will it actually cost?
While ERP systems do pay for themselves once successfully implemented, surprise fees can turn off new clients. A provider may set a base price for the system, however, implementation, upgrade and maintenance costs can be obscured in the fine print, according to TechRepublic. Discussing these expenses with the provider can help the client to better resource their budget for the planned solution. Setting a budget for the system can also help businesses stay within their goal and still receive a quality product.
3. Will it do what the business needs it to do?
Each company has their own set of "must have" functions when implementing an ERP system. If the business needs an ERP package that produces labels, then the company needs to check that the provider's solution will do it, according to ERP Focus. Purchasing a system that can't produce results is significantly detrimental to the client, but building a relationship with a reputable provider can lessen the stress.
4. Does it work with the existing hardware?
Similar to the previous question, a buyer should know if their infrastructure will still work after implementing the ERP system. Buying additional hardware or reorganizing the business for the solution defeats the purpose of purchasing it in the first place.
"Although ERP should be a business rather than a technology initiative, it's also important to understand how a potential software solution will align with your current infrastructure," according to TechRepublic. "For example, if you're a Microsoft shop, you're likely to find a better technical fit with ERP software products built on a .NET platform."
Considering this, buyers should place this factor as one of the most important to investigate before making a purchase.
5. Will it grow with the business?
Since businesses expect to see gains in their revenue and possible expansion, the solution should also be able to grow to offer continual support. The company should not outgrow its system, but it should not use obsolete technology either. The increasing availability of upgrades can help to slow down, or eliminate, the need for a new system. Choosing modules that will fit the company will also guarantee that the client will benefit as long as they use the system.
ERP vendors and options can be difficult to navigate. Prior research, along with industry recommendations and an open mind, can make the choice easier and put the business one step closer to becoming more efficient.
Learn how to define your ERP strategy by downloading the white paper entitled "ERP in Manufacturing: Defining the ERP Strategy" from the DMS website here.