How to Select ERP Software for your business?

Enterprise resource planning software has become a must for all businesses, whether big or small. With a range of integrated applications that helps to manage all the business functions efficiently, ERP has become a business essential. 

It is important to know that there is an array of different ERP systems. The same needs to be chosen as per the company size and industry type. Hence, startups and small organizations can select the modules they want to implement in their business. The moment an appropriate ERP software is integrated into the business system efficiently, it can increase the business profitability multi-fold. It can automate business processes and allows seamless access to important information.

The Best Ways To Select An ERP For Your Business

If you are looking forward to buying a new ERP software, and ensuring that your purchase decision is right, then here we give you some important tips to select an ERP system. It is essential to follow the right way as the impact of ERP software on the organization’s efficiency is high. When you follow the comprehensive and planned ERP selection guide, you will be able to align with your business goals. It needs robust planning and rich experience to make this daunting task successful. 

We help you here with the ERP selection process and give you the imperative details necessary to understand and streamline the process. 

Research

One of the first and primary steps, to begin with, is searching for the best enterprise software. To get one, you need to indulge in a good amount of research. Though it may be time taking, it will promise you the best results. 

Know The Reason You Need An ERP System

The next step is to determine why you need an ERP system. the first question to ask yourself is to know whether you are a growing company or a startup. The next thing you should contemplate is if you really need expensive software. 

Unlike the traditional times, when companies relied on MS office tools for data and working. Though many small businesses still use MS Excel this is another truth that these companies lose business to competitors who have adopted ERP systems to respond to the current business dynamics and evolving challenges. So, if you want your business to mint money and you want to make data-driven decisions in real time, then you need a new ERP system. 

If you already have an ERP that has super slow loading times and works as per the outdated system, then it is time to look for a new one. Its inability to be mobile, pose security threats, bad customization, and lack of support from the company, etc. need a new system. 

Coming back to the question of why you need an ERP system, do you need it for team building? An ERP project team allows the building of a business case and achieving goals. There are many ERP systems and their vendors may have their own strengths and weaknesses. 

Do you need ERP for business alignment? ERP projects are aligned with the business goals. You can create your goals in the ERP software and allow the same to support these goals. A business case can also help you connect with the alignment and establish the need for the ERP software. At the time of creating a business case, ensure to include the details on the technology and how it helps towards the business goals achievement. Before knowing more, ask yourself whether the new ERP integrates different enterprise systems, makes the customer experience better, improves business efficiency, offers real-time data, helps in better decision-making, and is compliant with regulatory norms. 

Draft The Strategy

Create a list of the challenges your IT infrastructure is facing. Jot down all the areas that need a change to match the organizational goals. One of the crucial steps of the ERP selection and implementation is important to devise the right strategy. 

Many big business companies use on-premise ERP software to develop an IT strategy including IT support, Geolocation, Government regulations, Functionality, etc. Though the ERP vendors handle the issues, cloud ERP is still in the phase of development of an on-premise solution. Big and leading companies such as Oracle and Microsoft spend a significant amount of money on their research and development wing. However, the fact that the cloud ERP is the best match for your organization cannot be denied. After due diligence and informed decision, the expert may suggest valuable inputs. 

While formulating the IT strategy, do not forget to ask the ERP vendors about their product roadmap, their experience in the industry, the technology they are investing in, how often is their update, and whether they are in quest of improving their models. 

There are certain integration strategies as well where the company can choose to implement a single ERP system with all the features or different ERP systems for catering to varied functional requirements. While the former is the simplest approach that needs limited technical resources, the latter might help with gaining a competitive advantage and is called the best-of-breed approach.

Your IT strategy should also talk about customization. The ERP system needs customization, and you must aim to lower it to ensure easy upgrades in the future. Prepare a customization approval document. 

Build ERP Team

An ERP selection team will help you know software requirements, attend ERP demos, add competence, and help with meaningful insights. Encourage the team to cooperate and contribute to the ERP initiatives. They should be given a chance to express their thoughts or ideas on the subject matter. The selection team must also have decision-making power. While suggesting how to improve the ERP processes, they should also be able to identify the associated challenges. 

Appoint an ERP product manager who will be responsible for maintaining the ERP selection process, according to the deadline and budget. Allow the project manager to make decisions. Prefer recruiting an employee who has experience and understanding of the processes. 

Know Your Requirements

One of the best ways to identify your business requirements is to conduct workshops. The selection team can prepare for the gathering and monitor the conversations. Extract their knowledge and prepare notes to record it. In these gathering workshops, focus on knowing “what”. Use tools like business process mapping when gathering business requirements to extrapolate it and make decisions while upgrading exercises.

Time To Implement Improvement 

After planning, strategizing, and requirements gathering, it is time to address the pain points and look for the scope for improvement. Start to document the facts and suggest process improvements. In case a complete transformation of the operating model is necessary, try improving some processes if not all. Prioritize the processes related to competition. Use industry best practices to make business better than everyone else.

Data Management Strategy

The ERP software needs quality data to add value to your business. Begin planning the data migration. It is usual for businesses to have their data spread across various structures and formats. To handle this complexity, you must implement the data management strategy as the earliest. As per this strategy, you should be able to migrate your data while resolving duplicate data issues and data quality. 

Sometimes, faulty master data becomes the major cause of unsuccessful ERP implementation. A data management strategy will help you with better ERP data migration and that too the soonest.

Make an exhaustive list of ERP Systems

In case you already have an ERP system, and you want to upgrade to the latest version of that system, add the same to the list. The organizations who have customized their software and the upgrade is equally challenging as the full ERP implementation, need to think differently.

While making a list of ERP systems, devise selection criteria like price, value, industry focus, your priority, etc. Industry experience is one of the major ERP selection criteria. Take reference from similar organizations like size, volume, business requirements, culture, etc. Look for vendor reputation by searching reviews and their support system. Employee tenure is another criterion that speaks volumes about upper management. 

Cost and scalability are other important parameters while making the list. Know the cost of implementation, maintenance fees, support costs, training costs, etc. Know if the increasing customer base will increase the requirement for transactions. 

Is your business ready? 

Take some time to conduct a business readiness assessment. This will help you know the business alignment, resistance level, ability for change, and organization’s readiness. In case your company has high change resistance, you might need to dedicate more time and resources to letting the change become seamless. Based on the organization’s readiness, you can develop a change management strategy. 

Negotiate With Vendors

To do this, hire an ERP consultant who has ERP negotiation experience. Ask them to prepare a negotiation workbook and use the comparisons tool. They should be able to outline long-term total costs, study licensing structures, and aim to achieve cost savings. 

Wrapping up

When the selection process is complete, take a break and ensure that your business is prepared for the change or implementation. Though your team may be excited about the process improvement, be ready for slight resistance during the implementation. 

Use the guide above for your ERP selection checklist. SMEs can safely go for Odoo and experience all the benefits.