ERP is the process of managing and integrating the day-to-day operations of a business. ERP applications automate and assist many administrative and operational business processes such as HR, finance, services, on-site security, and many others, in various industries.
Over the years, ERP solutions evolved, and emerged as one of the biggest allies of the process of transition to Industry 4.0. Today, many of them are web-based applications that can be accessed remotely over the cloud.
This will likely remain the norm for the upcoming years: The popularity of cloud-based ERP solutions has been rising, with an expectation of growth from USD 45.3 billion in 2020 to USD 101.1 billion by 2025.
Why is Choosing the Right ERP Solution Important?
Successful implementation of ERP solutions is a crucial business strategy, but it doesn’t always work smoothly. As the heart of many business operations, poor choices with ERP and its implementation can cost a lot of money and reputation to even the most high-profile businesses.
With the proliferation of ERP solutions in the market, it’s not always easy to choose the right one. Likewise, the most expensive or highest-rated ERP solutions aren’t always the right ones to fit all organization’s needs.
Step #1: Asking the Right Questions for Right Answers
Before embarking on a significant business decision like choosing the right ERP solution, it’s imperative to have a deep understanding of why your business needs it. Hence, executives must conduct a thorough analysis of their business models and operations, reviewing their weaknesses and strengths.
While doing so, the questions to raise can include:
- Is your business data accurate?
- What pain points do you want to solve with an ERP solution?
- Is your company changing its size or scale of operations, either via growing or shrinking?
- Are there existing tools (e.g., access management, time attendance, business intelligence system, CRM, e-commerce) that need to be integrated with your ERP solution?
- Do you need to reduce costs? If so, where?
- To what degree are your business systems connected?
- How satisfied are your customers?
- What works well with the current business systems?
- What would be the most effortless change in your business that would bring the highest return?
- What’s your company culture like when it comes to software adaptation and automation?
- Do you have internal capacity and resources for troubleshooting technical issues and regular maintenance?
- What’s your budget, both in terms of financials and human resources, to invest in implementing a new ERP system?
Step #2: Selecting the Right ERP Vendor
Once all the necessary quantitative and qualitative insight about your business is collected, it’s equally important to select the right vendor and ERP solution for a successful implementation.
- Evaluate the technical fit: In the light of an exhaustive list of your company’s needs for ERP, it’s crucial to find a vendor whose ERP solutions will align with your technical requirements.
- Industry experience: ERP is ubiquitous in most industries by now, but not all ERP tools are universal answers for every sector or company. Thus, while deciding on the right ERP solution for your business, it’s always advisable to choose a vendor with the relevant industry expertise and experience to better attend to your needs.
- Highest level of integration: An ERP system must allow the highest level of integration between all business processes, with the maximum capacity to process data and propose actions and solutions while maximizing control of access flows, production, etc. It must also include detailed and advanced reporting to maintain a level of business efficiency and security.
- Future-proof your vendor: Software and ERP technologies develop rapidly. Before signing a multi-year contract with an ERP vendor, it’s critical to evaluate if they’ve been quick to innovate and support their customers with advancing services and if they’re likely to keep doing so.
- Asking questions: A new ERP tool is a substantial investment for all businesses. When something might determine all the company’s business outcomes for the next few years, no question’s too tiny or too irrelevant. A reliable vendor will always be able to guide you through all your concerns — before, during, and after the sales process.
- Getting references: Before committing to an ERP solution, it’s advised for all executives to check opinions outside the sales team of the software companies. Even with all the questions answered, references or testimonials from other customers may assist you further with making the right decisions.
Bottomline: Picking an ERP Solution is an Important Decision. Make it Count.
Especially following the COVID-19 pandemic, automation is an increasingly indispensable part of doing any business efficiently. The right ERP solutions can empower executives to achieve precisely that.
Nevertheless, like all other enterprise technologies or solutions, any ERP software is just a tool — it won’t facilitate success or failure on its own. It requires training, collaboration, and productive partnerships for thriving. Ultimately, whatever solution you decide on should serve to free up your resources, not to strain them further.