How can you choose the best ERP software for your business? We asked an ERP consultant, who shared their advice with us. Whether it is implementing a company’s first ERP or changing their systems, they regularly make their expertise available to their clients so they can choose the best solution for their needs. They tell us their evaluation criteria and selection methodologies for choosing an ERP software.
Generally, the prime motivator to integrate an ERP software is to increase organizational efficiency and profitability. The project is often started by one department who is looking to improve its business processes. They find that they are not the only ones in the company that have that need. After talking with the other departments, the company realizes that it needs a single, global management system handling all or almost all of its business processes.
Most often, before the implementation of an ERP system, many clients are using several specialized software solutions that work separately (accounting, financial, or production) and who do not share data between each other. This lack of visibility and collaboration hinders their decision-making and growth. For others, the ERP project is initially built around a specific need such as access to data or production planning. The project then evolves based on the needs and growth of the organization.
Researching and choosing an ERP comes after, which is often intimidating due to the complexity and scope of the offers on the market.
The selection process for an ERP is very important for the project’s success, it is essential to adopt a long-term vision. Thus, to choose an ERP adapted to the present and future needs of the business, I breakdown the selection process into 6 main steps:
The goal is to get an idea of what is working and most importantly an idea of what the problems are. This step is crucial to identify the issues and needs of every department in the company.
Describe what you need and the features you want from a solution. What is the project specification used for? It is used to define selection criteria during the call for tenders. Providers will stick to it point by point.
Do not hesitate to find multiple sources of information using on the internet, specialty magazines, references from other companies or using the services of an ERP consultant.
In this step, you must reduce the number of providers by analyzing their responses to the call for tenders. What features are covered by the ERP software? Do they offer specialized modules for your industry? What will be the potential development needs? Take the opportunity to make a first round of selections and identify which systems are likely to better answer your needs.
The goal here is to analyze the software based on your industry and your objectives.
To do this, write a scenario that outlines all of the points that you want to be covered during the presentation. Use the same scenario for all demos, this will make it easier to compare each software solution. You can also provide a company data sample to make the assessment easier. Indeed, seeing a demo with your own products makes it easier to follow. Finally, using evaluation grids, bringing together all of the required criteria will allow you to evaluate your options in detail and choose the best ERP for your SME.
In that framework, it is essential to visit businesses that already use the solution you’re interested in. This step will allow you to validate your choice and better prepare for the implantation. It is also the time where you assess the team behind the solution. Do you think that they will be easy to work with it throughout the project?
In my opinion, there are 4 key evaluation criteria to consider:
It is one of the most important criteria when selecting an ERP. Make sure to take into account what defines your business. What is your industry? How many employees do you have? What are your priorities? Each ERP software provider has its specialties and you will have a more or less appropriate offer based on your specific needs.
Another point to consider: do you want to work with a developer or integrator? Remember that a developer will always have a better mastery over the system and be directly responsible for the success or failure of the project. An integrator is a reseller often has limited for tailoring the software to the needs of the business.
The system is regularly updated? Are modern technologies being used? Is this a truly integrated system or does it require a series of add-ons, in other words, software developed by other developers? Is it sold on-premise or in SaaS? Thinking in terms of a long-term investment, this criterion allows you to assess the sustainability of the system.
Is the software flexible? Will it be able to adapt to the short and medium terms needs of your company? And more importantly, is it adapted your business?
An easy to use software will allow for a shorter learning curve for your employees, which will make managing the change over much easier.
See also: ERP Myths and Realities
Yes, absolutely. Certain industries like aeronautics or food may require establishing additional processes such as traceability and nonconformity. Depending on your industry, it may be wise to turn to a specialized ERP, tailored for your business, in order to limit costly and complex development needs.
Asking about budgets is often a tricky question. Although it is important, you have to think in terms of return on investment capital. The solution that respects the budget will not necessarily be the one that will be beneficial to implement and manage. At the low-end, you should set aside 1 to 1.5% your revenue for the acquisition of an ERP software (license and implantation). Investing less generally shows a lack of seriousness about the project.
I would say that a key success factor of an ERP project is a methodical evaluation of each solution. It is essential to properly define the project and its objectives ahead of time so you can ask the right questions. What is your current system, its weaknesses and what are your long-term goals? This preliminary analysis will guide you through all of the steps of your project and often makes the difference between a failed or successful project.
The most common errors are generally tied to a lack of knowledge about a company’s business processes, a lack of preparation during data migration or a lack of employee communication ahead of time.
Do you feel ready to choose your ERP software? From your initial research to evaluating providers, this advice will allow you to conquer the mountain of information that you need to analyze and make an informed choice about the best ERP for your SME. By following this optimal methodology, you're sure to have long term success with your project!