Optimize business value and return on investment with careful planning and ERP selection.
When purchasing a tactical software solution such as an enterprise resource planning (ERP) system, making the right decision is crucial. ERP slection and deployment are no longer seen as mere IT initiatives. Rather, they have become strategic tools for helping to drive business growth and gain a critical competitive advantage.
In selecting the right system, there are a multitude of factors to consider. Certainly cost is a factor, but less expensive systems can result in more issues down the road, including the inability to meet new demands as they come up, lack of needed functionality, or a difficult, outdated user interface. The end goal is to make your business more efficient and profitable. Finding a solution that provides the strongest overall return is more important than minimizing upfront costs.
The end goal of ERP selection is to make your business more efficient and profitable.
Once you’ve embarked on your ERP selection journey, you’ll need to know how to accurately assess the many options. The major focus points below can help guide you to the right decision.
Define your business requirements
An effective ERP evaluation begins with examining your current operational and business requirements to identify the principal attributes and functionality you will need from an ERP system. This assessment can help justify your business case for the ERP selection and pinpoint the precise capabilities you will need right from the start.
focus on achieving measurable business value for your organization, then choose the software that best enables you to do this
Many businesses will simply attempt to replicate what they currently have in place without seeking to introduce better or more streamlined operational processes for lasting improvements. Try this instead: focus on achieving measurable business value for your organization, then choose the software that best enables you to do this.
Start by evaluating the business challenges and pain points that you need to address and develop a list of requirements that any new system must fulfill in order to achieve success.
- Why exactly are you interested in an ERP?
- What problems should it solve?
- What opportunities should it create for the business?
- Do you have industry-specific requirements beyond the abilities of your current system?
These questions can uncover any barriers and gaps in your business processes and help shape and refine your evaluation parameters.
Take time to consider the scope and diversity of the different ERP platforms available to determine which ones might be the optimum fit based on your unique needs and business requirements. Keep in mind that your long-term business strategy will determine the core criteria for selecting your ERP solution.
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Review integration capabilities
Manufacturers today employ a multitude of different systems (including on-premise and Cloud ERP) that perform critical functions. Having an ERP system that can bring together separate functional areas seamlessly is critical in today’s data-driven manufacturing environments.
Assuming your business has multiple departments, such as purchases and inventory, your ERP software needs to be able to integrate all aspects of your business. This integration can help your business run more efficiently and effectively, saving you time and money. For example, an ERP solution should work with your existing email system. It should also work with whatever document management and collaboration systems you have in place.
A number of trends might influence how you evaluate your integration requirements.
- First, realize that the cloud is here for the long-term. Many organizations today are deeply invested in software-as-a-service (SaaS) applications and cloud services, and all these services need to be integrated together, as well as with business systems running within their data centers.
- Second, companies today have a greater interest in exposing back office data, such as sales and logistics data, across the enterprise. They are also sharing data with an increasing number of Internet of Things (IoT) devices.
- Third, businesses today operate in a collaborative global market. No organization can stand alone and expect to thrive. They often need to integrate with third parties, including suppliers and partners. And the products they create may need to integrate with other organizations.
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Evaluate platform flexibility
To take advantage of the opportunities presented by the digital era, manufacturers need an ERP architecture that is up to the task. Monolithic mega suites will be replaced by agile, adaptable application infrastructures; focus will shift to the flexible integration of new systems and technologies.
Look for an ERP system that gives you a range of deployment options, be it on-site, in the cloud, or in a hybrid environment.
Businesses that are subject to government regulations should be especially concerned about design flexibility. If the system’s architecture makes it difficult to add functionality to support new requirements, you may find yourself scrambling to find an alternative solution, which may be a cumbersome, error prone manual system or an expensive replacement.
Look for an ERP system that gives you a range of deployment options, be it on-site, in the cloud, or in a hybrid environment. With a cloud-based ERP solution, you can avoid investing in expensive technical hardware and use a SaaS mode to increase liquidity. Important processes such as data synchronization, software updates, maintenance, and backups are monitored and performed by the provider automatically – resulting in a substantial workload reduction.
Involve key stakeholders
Not everyone in your organization will support your ERP plan or embrace the changes that a new ERP will bring. That’s why it’s critical to engage early with department and team leaders (sales, finance, IT, operations, etc.) who will be impacted by the new system. You will need their cooperation and backing not only during the evaluation process, but also throughout the implementation and operation phases of the project.
It’s essential that your staff understands the capabilities of the new system and can use it effectively. How well they engage and interact with the system can be a determining factor in your long-term satisfaction. Does the system offer an intuitive, easy to navigate interface? Are there an excessive number of features that they don’t envision using? Is the solution tailored to meet your unique industry needs and business process requirements?
Plan for future growth
Consider not only the features you need now, but the features you may need a year or five years from now. An ERP system is a long-term investment. You need a solution that is flexible enough to accommodate evolving business processes and new initiatives in your organization and is scalable enough to phase in new functionality as you need it.
Consider your over-arching business strategy and make estimations based on your long-term plan to help ensure that you are taking future needs into account as you weigh your options. What does your ERP system need to support in the future? How do you want to deploy the solution? Which model will best suite your immediate and long-term needs?
Assess vendor capabilities
A failed ERP deployment can have a lasting impact on your business performance—and your profitability. To minimize this risk, choose an ERP provider with an established implementation methodology. Can the vendor provide the appropriate resources to implement the proposed solution to meet your unique requirements? Will the vendor be dedicated to your company and implementation requirements? Can the provider bring useful perspective and insight into your company’s challenges and needs?
Your ERP provider should have a track record of success in your industry, particularly if your business is highly specialized. With the right technology and expertise, your ERP partner will be able to provide the resources and skills you need to address your most difficult business challenges and maximize your return on investment.
It’s important to determine how ERP support will be provided, and if it will meet your operational requirements. Will support be provided onsite or online? What level of implementation, support and training will you need with a new solution? Is support offered as part of the product package, or is it an added cost?
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Accelerate your success with proper planning
A modern ERP system—one that can bridge the gap between high performance and minimum operating costs—provides you with an important strategic lever to jump start growth and streamline processes across your organization. That’s why it’s important to make your decision based on objective and unbiased information rather that gut feel.
Decision makers should use the process of defining ERP business requirements as an opportunity to improve current operations, efficiency and effectiveness. The last thing you want to do is implement a system merely improves the same unsound business processes. Instead, focus on achieving quantifiable business value for your business, and choose the software that best accomplishes this.
About abas: abas ERP is more than just software—it’s a complete solution designed to meet your unique manufacturing requirements. Our expert consultants have a wealth of domain experience that makes them an ideal partner for custom manufacturers. Not only can we implement the software across an entire organization, but we can teach the relevant stakeholders how to make the most of the system to improve your business performance. Whether you have 10 employees or 1000, our aim is to optimize your processes so that you can save time and costs, improve visibility, implement reliable advance planning, and achieve competitive advantage.