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5 Questions To Ask When Evaluating An ERP System

Strategies for manufacturers looking to drive greater business value from their ERP.

September 01, 2023

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Any business that wants to scale needs the right business tools. In the digital world, where 67% of manufacturers are embracing a data-first strategy, that means advanced technology, powered by a modern enterprise resource planning (ERP) system.

Today’s ERP solutions provide a single source of truth for your business. ERPs evolved over the decades to not only record data from your operations, sales, financials, customers, and employees, but analyze it as well, helping provide actionable insights into business performance.

Modern ERP systems offer dynamic collaboration and a host of automation capabilities, critical technologies for thriving in a fast-paced business environment. Moreover, when deployed in the cloud, ERP becomes more flexible, enabling an always-on, easy-access, work-anywhere environment. Cloud ERP also gives your business a foundation for scale, which is one reason why 85% of enterprise manufacturing organizations plan to transition all or most of their business solutions to the cloud.

Why Your Manufacturing Business Needs an ERP  

Whether you’re a small business or a large enterprise, you need to meet customer demands while exploring growth opportunities. To do this, manufacturers need to track everything: customer orders, production, shipping, cost of materials, as well as HR, marketing, financials, and more. If you have a different system for each area, your data will exist in silos, where it remains disconnected, unable to provide optimal value.

ERP systems help solve this issue. Meant to be a one-stop-shop, ERP is powerful software that can collect, manage, and analyze all business data from everywhere. Once you have your data, you have the power to truly evaluate your performance. For instance, by tracking the production lifecycle, an ERP can surface long downtimes that you can relieve by adjusting processes.

A modern ERP can already help enable accurate forecasting for customer needs, allowing you to scale inventory up and down as necessary. In the future, the data in your ERP will increasingly drive automation and prediction capabilities. So when looking for an ERP that can transform your business operations and ignite future growth, be sure to ask the following questions.

1: Can this ERP help move us towards our business goals and objectives?

Your ERP should work for your business. It should go beyond record keeping to provide actionable insights, so that you can increase your productivity and efficiency and improve your margins. This starts by determining your business goals and objectives, including your KPIs, and finding an ERP that will help you achieve them. A modern ERP is an always-evolving system that allows you to build dashboards and workflows, so that you can truly hone in on the areas that will help enable business growth.

2: Does this ERP integrate with business applications and devices across my organization?

An ERP isn’t meant to only manage one portion of your organization—it’s meant to manage all of it. This includes integrating data from operations, supply chains, sales, financials, customers, and more. To do this, your ERP must be able to work with all your business applications and be able to pull in data in real time through APIs or other integrations. This is especially important as the number of Internet of Things (IoT) devices is expected to increase to more than 29 billion by 2030. To get the data from those devices, ERP systems must seamlessly connect to them. If your ERP only works with half your business applications, then you’re only pulling in half your data—and only getting half the picture of your operations.

3: Does this ERP offer features that are specific to my industry?

You may be able to use an ERP system out of the box with standard functionality, but to keep pace with your competitors you’ll likely want an industry-specific ERP. For manufacturers, an ERP system that supports a connected factory from shop floor to top floor will help enable you to track production supplies, build supply chain resilience, equipment usage, and streamline throughput, while building supply chain resilience. Make sure that the ERP system has the features you need, and that its vendor has experience in your industry as well.

4: Is this ERP meant for global usage?

As you’re evaluating a vendor and ERP system, ask what kind of global coverage they offer, and how the ERP will work for distributed and remote teams. Cloud-based ERP will enable teams around the world to seamlessly connect to your systems and collaborate cross-functionally. Still, you’ll want to learn how your ERP works with local information. For example, can it adjust for regulations, currency, and time zones? Does it pull in global market and industry data in real-time? In the modern world, global capabilities in an ERP system are key for businesses of any size.

5: What types of solutions does the ERP vendor offer?

Ideally, you will deploy your ERP for a long time, continually deriving value from it as your business situation evolves. In other words, your ERP provider should be one of your trusted business partners. As you evaluate an ERP solution, evaluate the vendor as well. Before you contract with them, be sure that they understand your industry and the unique needs of your business, and that they can provide ways to tailor your ERP to meet your business needs as well. Investigate the pricing structure and see how it accounts for scaling up your users and usage. If you do purchase their ERP, learn how they’ll support your needs, and whether they’ll be there for you around the clock or whether you’re on your own. Learn more about how they’ll work with you on future developments and upgrades so your ERP can continue to grow with you.

Start Looking for Better Tools Today

The future of ERP is bright. Expect more IIoT devices, deeper analytics powered by AI, and more solutions deployed in the cloud, helping create that coveted connected workforce. These technological innovations are exciting too—surely one reason why 60% of frontline manufacturers say they would take a pay cut to leave their current company for a more technology-driven factory. As you look to support your growing operations and scale your manufacturing business, make sure to ask the strategic questions about your next—or first—ERP system.