Seven considerations for the ERP evaluation process
Selecting a new ERP (enterprise resource planning) solution can be a large undertaking. There are many factors that need to be considered, and there is a lot on the line–for both the business’ potential for growth, and the people overseeing the selection process. It is very important that the selection process offers evidence of due diligence. But how do you know what that due diligence is? What are some of the processes that can help ensure you are getting what you need out of the selection process?
Rolling out an inadequate ERP solution can mean that not only is the initial outlay wasted, but a company might become committed to a solution that can cause frustration for years to come and limit operations capabilities. Some frustrations in these instances could include increasing costs of ownership, service failures and software that is simply not fit for purpose.
On the other hand, selecting the right solution and roll it out successfully can mean your business gains a foundation from which to:
- deliver operational efficiencies,
- work collaboratively,
- reduce complexities,
- integrate systems,
- improve customer experience,
- and gain key analytical insights, which can facilitate innovation and growth.
Evaluation process considerations
You want to do your best to ensure that your business has the best solution for its own unique set of requirements. To that end, here are seven useful considerations that can help improve your software selection process.
1. Determine system requirements. First and foremost, it is important to determine what your business needs, based on its current and anticipated future state. As outlined in research by Aberdeen Group, the chief challenge facing manufacturers today is managing growth expectations. Therefore, it pays to ask–where is your business headed and what are its plans for growth? Your solutions need to be able to support your goals as your industry evolves and adapts.
What are the processes, staffing resources, and technologies that the system will need to support? This process often benefits from a collaborative approach, via a cross sectional vision for the organisation. As these requirements and processes are documented, not only do they offer a way to formally evaluate solutions, they can also help form training scenarios in the future.
2. Ensure the support of senior management. Software that has been selected without ongoing buy-in from senior executives can face roadblocks and scepticism. While much of the solution will be rolled out at the lower levels of the organisation, senior management are often the ultimate evaluators of success. Involving upper management in the selection process can help ensure an ongoing commitment to the solution selected. Executives do not necessarily benefit from understanding the minutiae of the solution, but a few important and salient details can go a long way.
3. Establish a project roadmap. A clear roadmap can help demonstrate to stakeholders when the rollout is expected, the expenses involved and it can also help establish useful expectations as to when benefits and ROI may be realised. This smoothing of the transition will mean anticipating and documenting some important factors such as–what steps are involved in the transition and what are the processes and functional roles that will be affected by the planned changes.
4. Consider the total cost of ownership (TCO). Beyond the initial outlay, there are additional expenses to consider before gaining a complete vision of cost. Some aspects to consider include future upgrades, hardware requirements, and implementation costs as well as training and consulting fees, if you mean to bring in outside assistance. These considerations can go a long way to prove your due diligence and a comprehensive understanding of the solution at hand.
5. Consider peer references. Your peers, connected either through industry groups or your business network, can be a useful resource for recommendations and insight. They can often have first-hand experience of the challenges and lessons learned, and can save you valuable time.
6. Establish a relationship with the vendor. A good relationship established as early as possible can prove useful, both in the evaluation stage, and as the relationship matures. Often a great account representative can make a big difference to strong service delivery and a focus on customer value.
7. Evaluate deployment flexibility. Deployment options can be a key criterion for ERP vendor selection and the system you settle on needs to adapt to the way your organisation does business. For example, cloud deployments are maturing and increasing in demand, and you may want to know what your options will be now, and in the future. Vendors that provide more options such as hybrid deployments for both cloud and onsite, can allow the operations of the organisation to evolve and adapt to the way your organisation does business.
The selection process for each organisation can be as varied as the organisations themselves. While there is no guaranteed method to selecting the right ERP software for your business, we hope that with several key practices in place, the best solution available with be identified and implemented successfully.
For more in-depth information about selecting an ERP system that is right for your business, download your free copy of our ERP selection guide here.
Posted by Vince Randall, Regional Vice President, Epicor Software ANZ