3 Factors that will Impact Your ERP selection

3 Factors that will Impact Your ERP selection

Choosing the right ERP system can help you increase productivity of your business’s processes. It can be complicated to select the right ERP and often there is a lot at stake.

With numerous ERP vendors and solutions available, making the right choice can be a daunting task. In this comprehensive guide, we will delve into the ERP selection criteria for ERP vendors and partners, questions to ask during the ERP selection process, and the role of ERP selection consultants. Whether you’re new to the world of ERPs or looking to upgrade your existing system, this guide will provide valuable insights to help you make an informed decision for your ERP software selection.  

1. Define why you want to implement an ERP

How to select an ERP system? Defining why you want to implement an ERP system is a fundamental step that sets the direction for your ERP selection process.

The first question you need to answer is: what are the features that your business needs to achieve with an ERP system?

To make the most informed decisions in selecting the right ERP system, it is imperative that you thoroughly grasp your motivations and discern your specific business needs. Evaluating these factors is essential in the process of ERP system selection. 

Create a comprehensive list of the functional capabilities that a suitable ERP system can deliver. For those with an existing ERP system, conduct a thorough assessment to identify its shortcomings and pinpoint the additional features necessary to enhance your organization’s productivity. 

If You Have an Existing ERP: 

  • The software does not meeting your requirements: Your current ERP system may have limitations, lack essential features, or no longer align with your evolving business needs. Identify the specific shortcomings that hinder your operations.
  • The current software is not fulfilling its purpose: If your existing ERP isn’t effectively supporting your business processes, it’s time to consider a change. Your ERP should streamline operations and enhance productivity.
  • Your customers are complaining as your efficiency is reduced due to the shortcomings of existing ERP software: Customer dissatisfaction due to inefficiencies caused by your ERP system should raise a red flag. This can impact your reputation and competitiveness.
  • Your competitors are getting ahead of you: Falling behind in your industry can be a sign that your ERP system is no longer keeping pace with advancements. You may need a more innovative and competitive solution.
  • Your company is growing and you need more features: As your business expands, your ERP should adapt to support your growing needs. You might require additional features to accommodate new processes and higher data volumes.
  • It is costing a lot to maintain your current ERP system: High maintenance costs can erode your profitability. If your current ERP system is financially burdensome, it’s time to explore more cost-effective options.

If You Are Implementing an ERP System for the First Time: 

  • You use excel or legacy software to keep track of your business data: Relying on outdated tools like Excel or legacy software can hinder your ability to manage and analyze your business data efficiently. An ERP system can provide a more comprehensive and structured solution.
  • You don’t have any documentation of your business operations: Lack of documentation can lead to confusion, inefficiencies, and mistakes. An ERP system can help you establish standardized processes and maintain proper records.
  • You need features that can help you increase productivity: If you’re looking to streamline your operations, improve collaboration, and enhance productivity, an ERP system can provide tools and features designed for these purposes.
  • Different departments of your company need a more efficient way to collaborate: ERP systems promote cross-functional collaboration by providing a centralized platform for data sharing. This can lead to smoother workflows and better communication.
  • Your business needs proper documentation and reports: Proper documentation is vital for decision-making and compliance. ERP systems generate accurate and timely reports, ensuring your business operates smoothly and stays in compliance.
  • Your customers are not satisfied due to delays from your end: Delays in fulfilling customer needs can impact your reputation and revenue. An ERP system can help you streamline order processing and reduce lead times.
  • Your competitors are getting ahead due to a better system implementation: Falling behind in your industry because of outdated systems can have serious consequences. An ERP system can level the playing field and even provide a competitive edge.

Read more: This Is Why Your Company Need An ERP Solution Today

2. Determine who will be involved

It’s necessary that your whole team are aware of the ERP implementation process and that they can give their input of thoughts and needs.

The ERP selection should be a collaborative process that involves departments and team members who will be using the ERP system. Conduct interviews with different teams and review existing processes to understand better what your business can improve. When scheduling product demos, include team members in the meeting and discuss together how the ERP can benefit business productivity in each department.

Here are some key considerations and steps to follow: 

  • Cross-Functional Team: Assemble a cross-functional team that represents various departments and functions within your organization. This team should include individuals from finance, IT, operations, sales, and any other areas that will be impacted by the ERP system. Each team member should bring unique insights and expertise to the table. 
  • Key Stakeholders: Identify key stakeholders who will champion the ERP project and have decision-making authority. These individuals should have a clear understanding of the organization’s goals and be able to align the ERP selection with the overall business strategy. 
  • User Input: Encourage active participation and feedback from end-users who will be directly using the ERP system. Their insights into daily workflows, pain points, and desired features are invaluable for selecting an ERP that truly meets your organization’s needs. 
  • Conduct Interviews: Interview team members and department heads to gain a comprehensive understanding of their pain points and specific requirements. These insights will inform the selection criteria and help prioritize features that are critical for each department. 
  • Review Existing Processes: Analyze your existing business processes to identify bottlenecks and areas for improvement. Understanding the current workflow is essential for determining how the ERP system can streamline operations. 
  • Product Demos with Teams: When scheduling product demonstrations with ERP vendors, ensure that team members who will be using the system are present. This will allow them to see firsthand how the ERP can benefit their daily tasks and provide feedback on its usability and fit for their needs. 
  • Open Communication: Maintain open and transparent communication within your team. Encourage team members to share their thoughts and concerns. Regular meetings and updates on the ERP selection process can foster a sense of ownership and enthusiasm among staff. 
  • Training and Change Management: As part of the ERP implementation plan, allocate resources for training and change management. Ensuring that all team members are well-prepared for the transition can minimize resistance and ensure a smoother adoption process. 
  • Project Manager: Appoint a dedicated project manager who can oversee the ERP selection process, coordinate team efforts, and keep the project on track. This person will play a critical role in bridging the gap between various departments and the ERP vendor. 
  • Alignment with Business Goals: Ensure that the ERP selection aligns with your organization’s overarching business goals and strategies. Each department’s needs should contribute to these larger objectives to ensure a coherent and purpose-driven ERP implementation. 

Involving the right people during this phase is extremely important to be to take full advantage of an ERP. This approach ensures that the chosen ERP solution not only meets the technical requirements but also aligns with the real-world needs and workflows of your organization, ultimately leading to a successful implementation.

Read more: Tips for A Successful ERP Implementation

3. Find an ERP partner who you trust

After laying out your internal requirements, the next step is to conduct research and make a list of reliable ERP vendors. Stay aligned with your predetermined ERP requirements and objectives to facilitate your ERP vendor selection process.

Some well-known ERP vendors include Microsoft Dynamics, Oracle, Infor, and SAP. These vendors offer a range of ERP solutions tailored to various industries and business sizes. 

ERP Partners and Their Role

Large ERP vendors, such as Microsoft Dynamics 365, often collaborate with a network of ERP partners. These partners are dedicated to not only selling but also implementing and supporting the ERP software. Engaging with an ERP partner can be a highly beneficial step in your selection process. ERP partners can provide the following advantages: 

  • In-Depth Product Knowledge: ERP partners possess a deep understanding of the vendor’s software. They can explain the features and functionalities in a detailed and practical manner, often backed by hands-on product demonstrations. 
  • Tailored Solutions: These partners can help you select the best ERP software for your business by tailoring the solution to your unique needs. They can make recommendations based on your specific industry, size, and business processes. 

Key Criteria for Selecting an ERP Partner

When looking for the right ERP partner, it’s essential to consider several crucial factors to ensure a successful collaboration. You should aim to partner with an entity that is: 

  • Industry specialized: Select a partner with expertise in your industry. Industry-specific knowledge can make a significant difference in understanding your unique challenges and opportunities. 
  • Financially stable: A financially stable partner is better equipped to provide long-term support and service. Stability ensures that the partner will be available for ongoing support as your business evolves. 
  • Future vision: Choose a partner that demonstrates a forward-thinking approach. Their vision for the future should align with your organization’s growth and technology roadmap. 
  • Successful track record: Look for partners with a proven track record of successful ERP implementations. References and case studies can give you confidence in their capabilities. 
  • Flexible: A flexible partner is adaptable to your changing needs. They should be able to customize and extend the ERP system to accommodate your evolving requirements. 
  • Can customize and develop more features for your ERP: An ideal partner should offer the ability to customize the ERP system to better suit your unique processes. They should also have the capacity to develop additional features when necessary. 

Once you’ve curated a list of ERP vendors and potential partners, it’s advisable to reach out to them in order to arrange a meeting with an ERP selection consultant. This meeting will provide you with a deeper insight into the ERP systems that align with your needs, and you’ll also receive a comprehensive proposal containing vital information, such as ERP pricing, system details, and other critical data necessary for making an informed decision regarding your ERP selection. 

Questions to Ask Vendors During the ERP Selection Process 

As you evaluate ERP vendors, it’s essential to ask the right questions to gain a comprehensive understanding of their offerings. Here are some crucial inquiries: 

  • Can you provide references from clients in our industry? 
  • What is your implementation methodology, and how long does it typically take to go live? 
  • How do you handle data migration from our existing systems to the new ERP? 
  • What is the pricing structure, including licensing, ongoing support, and maintenance costs? 
  • Do you offer training programs for our employees, and what is the cost? 
  • Can you provide a detailed breakdown of the system’s features and functionalities relevant to our business? 
  • What is your disaster recovery plan, and how do you ensure data security? 
  • What third-party integrations does your ERP system support? 
  • Can you explain your update and upgrade process? How often are new features and improvements released? 

ERP Selection Checklist 

To streamline your ERP selection process, use the following checklist as a reference: 

  • Define your business goals and objectives. 
  • Identify key stakeholders and involve them in the selection process. 
  • Research and shortlist potential ERP vendors. 
  • Evaluate vendors based on industry experience, scalability, functionality, and integration capabilities. 
  • Request references from vendors and contact their clients in similar industries. 
  • Ask detailed questions about pricing, data migration, support, and customization. 
  • Conduct hands-on testing and demonstrations of the ERP systems. 
  • Calculate the TCO and expected ROI for each vendor. 
  • Ensure the ERP system aligns with your long-term business growth plans. 
  • Consider the role of ERP selection consultants if needed. 

Read more: How To Select An ERP Vendor? 

Conclusion

To streamline your ERP software selection, use our provided ERP selection checklist. This checklist will guide you through defining your objectives, identifying key stakeholders, researching potential vendors, evaluating their capabilities, and calculating the total cost of ownership and expected return on investment. It also emphasizes the importance of considering long-term business growth plans and, if necessary, the role of ERP selection consultants. 

Selecting the right ERP system is a significant undertaking that requires careful consideration and a strategic approach. By defining your objectives, engaging the right team, and choosing the best ERP partner, you can set the stage for a successful ERP implementation that enhances your business operations and positions your organization for growth and success. 

To delve deeper into ERP selection and learn more about the industries that benefit most from ERP systems, please visit our provided links for additional insights and guidance. 

More to Read: 

Industries that benefit most from ERP

8 Essential Questions When Choosing an ERP Consultant 

ERP Comparison Chart Between Dynamics 365: Business Central and Finance & SCM 

How Much Does An ERP System Cost? 

If you would like to explore Dynamics 365 ERP, you can contact Calsoft today for a scheduled demo. We have over 20+ years of experience and are Microsoft Gold Partners. Let us help you decide which ERP suits your company’s requirements.