Selecting the right Enterprise Resource Planning (ERP) system is a critical decision for any organisation. It can be one of the largest in terms of cost, effort and time.

Making sure you have the right system for you is vital: Get it right, and you can expect to see improvements in operational efficiency, accuracy of data and your company having a firm foundation for future development and growth. Get it wrong, and it can be a costly and frustrating process which can have the opposite effect.

We understand that choosing the right system for you, be it an ERP or a large CRM, is important; so, in this blog we’re looking at the steps you can take to ensure you make the right choice.

 

Understanding Your Business Needs

The first step in selecting an ERP system is to really understand what your business needs and strategic aims are. To do this well, alongside having a clear business strategy, you need to understand who the system stakeholders are, and what they need to support strategic progress. In that context, the questions below are a great place to start.

  • What pain points do you have in your current processes?
  • Which departments will use the ERP system, and what do they need?
  • Would a new ERP system help you move towards your business goals, and how would it do that?

By clearly defining your needs, you can really start to focus in on which solutions best align with your business objectives.

 

Evaluating Features

Once you have a clear understanding of your business needs, the next step is to evaluate the features of different ERP systems.  The ERP market is full of solutions that can cater for all different types of businesses. However, some may have features that are more focussed on specific industries.

Key features to consider initially include:

  • Scalability: Ensure the ERP system can grow with your business.
  • Industry-specific functionality: Look for systems that can be tailored to your specific processes.
  • Integration: Does the ERP provide the ability to seamlessly integrate with any existing solutions that it can’t provide itself?
  • User-Friendliness: A system that is easy to use will encourage adoption and reduce training time.
  • Reporting and Analytics: Advanced reporting and analytics capabilities are crucial for informed decision-making, and these days some level of AI capability is almost a must.

 

Deployment Options

ERP systems can be deployed on-premises, in the cloud, or as a hybrid solution. In the last decade cloud has increased in popularity, but it is not always the right option for every business.

Each option has its advantages and disadvantages:

  • On-Premises: Offers greater control, security and customisation but usually requires significant upfront investment and ongoing maintenance by technically competent people.
  • Cloud-Based: Typically involves lower initial costs, offers scalability, and reduces the burden on internal IT resources. However, it may involve recurring subscription fees and reliance on the vendor for updates and security.
  • Hybrid: Combines elements of both on-premises and cloud-based solutions, offering flexibility and a balance of control and convenience.

For some sectors, this can be as important a decision as the features and benefits of the system itself.

 

Budgeting and Cost Analysis

We can’t talk about selecting an ERP system without talking about cost. There is no escaping the fact that the cost of ownership is a huge factor in the selection process. It’s important to think about both the initial costs and the total cost of ownership (TCO), which includes implementation, customization, training, maintenance, and support.

When you are analysing the likely cost, it is important to:

  • Request detailed quotes from vendors that allow you to compare like with like.
  • Understand the pricing model (e.g., subscription-based vs. perpetual licensing, full users vs light users).
  • Ensure you factor in hidden costs, such as additional “optional” modules, resourcing to manage and maintain the system, and potential future upgrades.

  

Vendor Evaluation

Choosing the right vendor is as important as selecting the right ERP system. Many features in ERP systems can be similar, so ultimately not only is the software important, but the relationship with vendor is too.  After all, these are the people who you would be working with on not only the project but getting support from in the future!

Some things to consider are:

  • Reputation and Experience: Look for vendors with a proven track record in your industry.
  • Support and Training: Ensure the vendor offers comprehensive support and training services.
  • Customer References: Speak with other businesses that have implemented the ERP system to understand their experiences.
  • Future Roadmap: Consider the vendor’s commitment to innovation and future development of the ERP system.

 

Implementation and Change Management

However good the system’s functionality, it will only be of use if the implementation is successful – and that means achieving user-adoption and enthusiasm for changed ways of working. A successful ERP implementation requires careful planning and change management. Whilst there is a lot of information available about features and benefits, this part of the decision can be harder to evaluate. A project can fail if the change management is not handled correctly.

Develop a detailed implementation plan that includes:

  • Timeline and Milestones: Set realistic deadlines and key milestones.
  • Resource Allocation: Assign a dedicated project team with representatives from all affected departments.
  • Training and Support: Provide comprehensive training to ensure users are comfortable with the new system.
  • Change Management: Communicate the benefits of the ERP system to all stakeholders and address any resistance to change.
  • Monitor and measure success. Look for and expect a means to track and monitor your company’s success factors or project objectives

 

These are the key 6 factors that we would recommend that anyone considers when selecting a new business system, be that ERP, CRM or otherwise. We understand how important this decision is, as we work on selection projects every day. Carefully and dispassionately considering all the best options for your organisation is what we do, and not only will it bring peace of mind, but it also usually saves you money overall as well. Please get in touch!