Researching and evaluating ERP software is overwhelming. There is a staggering amount of information about what ERP is, hundreds of products and even more resellers and consultants to choose from. Let’s discuss the critical components to ERP evaluation and what software implementation plan you’ll put in place.
The Business Reasons for Change
The first thing you need to ask yourself is, why change your existing software? If you cannot come up with a compelling reason to change, you may be spending a lot of time, effort and resources researching a new ERP system when your current one is working fine. There are too many reasons to count, and they’re different for every business. Here are few we hear often from all kinds of businesses.
- Outgrown software functionality
- Dissatisfaction with support
- Multiple duplicated processes
- Software doesn’t integrate well with others
- Duplicated data entry
- Need to automate
- Employees manually transfer data from one system to another
- Processes rely heavily on paper and handwritten notes that have to be re-keyed later
Choosing a ERP Software Evaluation Team
Assembling an internal team is important to the overall success of the project evaluation. This may consist of anywhere between two and eight people who are invested in the successful implementation of a new system. Team members should be spread across the company so that all departments are represented.
Define Your Critical Business Requirements
Each department will have their own unique needs, consult with them to determine what their current system or process do, that the new system must also be able to do. It’s important not to assume the new system will have all of the features and functionality your current system has.
What do you have, what do you want, what do you need?
- A list of haves, wants and needs from each department
- Get business reasons for each item if it is not immediately clear
Defining your ERP Software Implementation Plan Budget
First, consider what your budget includes. Are you considering a Cloud ERP? If not, you may be looking at new hardware as well. It is difficult to estimate what an implementation might be, but typically implementation runs between 1:1 1:2 of the amount of the product for an on-premise product.
In a SaaS (Software as a Service) model, you may be looking at 1:3 of the first year subscription cost depending on modules needed.
Selecting Your VAR
Most of the major ERP manufacturers sell through channel partners, called VARs (value added resellers), you will most likely be working with one to purchase and complete your software implementation.
The importance of choosing your VAR comes second only to the software meeting your critical business requirements.
Finding the right VAR match for your business is critical because they will help you choose the right software, design it to meet your needs, and work with you to implement the software. That’s not where your relationship ends though… they will be a long term partner supporting you through the life of your software including upgrades and the addition of functionality over the years as your business grows and changes. As for Milestone, we look at our client relationships as long term. Many of our clients have been with us for 15+ years, continuing to work with us through upgrades and software changes.
Choosing an ERP Software
If you have followed the software implementation plan outlined in the previous sections choosing your ERP solution will likely be easier. By this time you’ll have weeded out the solutions that haven’t met your requirements, and hopefully you’ve been able to eliminate VAR’s who you didn’t feel were the best fit for your company.If there are still multiple products that meet all of your criteria there are a few things to think about when making your final selection:
- Your comfort level with the VAR
- Your comfort level that the software will grow with you into the future
- The support of the manufacturer
- The ROI it will likely provide you with
Go with your gut on what feels like the best fit for your company. You must feel confident that you have done your due diligence and that the solution you select will meet the requirements you defined early on in the process. Once you select your ERP software you know that the real fun will begin.
Editors note: This blog has been updated to reflect Implementation cost of SaaS model.