Traditionally Enterprise Resource Planning (ERP) systems are viewed to be more suited to large business or corporations who have bigger budgets for technology change projects. That may have been the case many years ago, but times have changed thanks to cloud computing. Here are our tips for evaluating ERP systems for your business.
When evaluating ERP solutions, “How much does your software cost?”, is usually the first thing we are asked when we meet or talk to a prospective client. Often prospective clients need a minute to ponder our response, “How much of your time is spent duplicating data with double entering and inefficiencies with your current system?”
Those that have taken steps to identify that they would benefit from an ERP system comment, “We need to move to a system that does it all but ERP systems are too expensive from what I heard”. ERP systems are pricey compared to what you spend on your current smaller system of a thousand or so per year, but you need to consider the cost saving when you streamline your processes with ERP. Additionally and ERP solution serves your entire business and replaces 5 or more systems that you are paying for via subscriptions.
I’ve outgrown my current systems and I need to upgrade, what do I do?
There are two parts to your ERP journey, selecting your preferred ERP solution and selecting your implementation partner. Finding the right ERP and implementation partner for your business is critical to the success of your project. You can read more about how to select the right implementation partner, here.
Checklist when evaluating ERP systems
Here is a quick key point checklist we recommend when evaluating ERP systems.
- Evaluation of ERP systems
– Ask your accountants or financial controller who they recommend to look at when it comes to ERP. Also talk to your contacts and other businesses that use ERP and get their views on what they use
– Look at both cloud and on-premise ERP systems so you get to compare the best of breeds and the IT infrastructure required
- Cost vs Benefit Analysis
– If you are still using spreadsheets and consistently double entering information with multiple systems, measure those costs. Your preferred ERP system should replace that and once you tally up how much time and money is spent on that, you will start to see a truer picture of costs involved
– Add up your total cost of ownership comparing on-premise and cloud applications over a 5 year period.
– What more can I get out of the system if I want to expand and grow the business? For example, acquisition of new businesses, expansion overseas with additional offices etc
– I want to diversify my business, can the new ERP system handle that?
– Will I ever outgrow my selected ERP system?
- On-going support
– Who will support my business when I implement the new ERP system?
– What types of support model do you offer?
Before you select the new ERP system, get some reference sites and talk to existing clients using the ERP system. Ask them these questions;
- Was the project implementation on time and on budget to what you were quoted?
- If you were to change the project implementation again, what would you do differently?
- Did the new ERP system save you money with more improved efficiencies?
- Does the system allow you to make changes, create reports, give you ownership to enhance the ERP easily? Or did you have to pay an external party to complete those tasks?
- Was your business affected when upgrades occurred?
- Did you require more support after your system went live?
- Would you recommend this system to others?
Remember, change your business to suit your ERP system NOT change the ERP system to suit your business. If you have that mindset to make that change and take that leap to a ERP system, your business will be successful and grow.