Small Business Enterprise Resource Planning (ERP) software market is huge and complex. There are hundreds of vendors offering competing suites of Enterprise Applications. Some offer very niche vertical market solutions to meet the unique requirements of specific industries, such as Manufacturing, Food & Beverages, Textiles, Pharmaceuticals and many more. This post will help you separate the wheat from the chaff and guide you to select an ERP Solution that will best fit your business needs and support your growth trajectory.
Understand the ERP Basics & your Business Requirements
First and foremost, understand the basic ERP software functions like Finance, HR, Supply Chain, etc. Research the latest application capabilities and features on offer and learn about the available deployment modes like on-premise, cloud, hybrid, etc. There are unfamiliar technologies that you might be bombarded with like Social Analytics, Business Intelligence, Big Data, Mobile ERP, etc. Make a list of all the functionalities that align with your business objectives. Consider only those features which that fit your budget and provide you the desired return on your investments. You will find this information handy when you begin to evaluate different vendors.
It is always better to set priorities when going out to shop for enterprise solutions. Start by identifying the challenges you face with your current business processes. Evaluate the gaps in your existing legacy system or in-house fragmented applications. Streamlining the business critical processes should fall into your ‘must-have’ list. All other requirements which will make your life easier, but are not too critical to the business directly will fall into the ‘good-to-have’ list.
Once you have a list or document prepared for your ERP needs, it is time to see what vendors are offering value to you. You could be looking for a specialized system or a single component like a CRM or HRM which will sort your problems. You could also be looking for a comprehensive suite of applications which would integrate you disparate application & provide information flow across all your departments. These would be Tier-1 ERP solutions like Oracle JD Edwards, E-Business Suite, etc.
Choose a vendor that will offer you a solution which fulfils all your needs, caters to your business size and is willing to scale-up in the future fits your budget and provides your preferred deployment options. You also need to seek a vendor who will offer you a consultative approach and will not hesitate to tell you when you are wrong. Do not overlook the servicing terms & conditions during vendor selection. Annual maintenance and support is a significant cost. You must ensure you are getting complete support for your application upgrades, bug fixes and enhancements at a reasonable price. Evaluate the need to opt for shared support services for your ERP as well. This will help you and prove more cost-effective in the long run.
Share your implementation priorities & timelines with the shortlisted vendors. Evaluate live demonstrations by the vendors. You may also ask for a Proof-of-concept to build trust with the vendor. Once you have shortlisted a vendor and have reasonable confidence that the solution will meet your requirements, ask the vendor for customer references to verify their claims. Talking to a customer running a similar business will help you understand what challenges they faced and how the vendor reacted to these challenges.
Another important aspect to ERP vendor selection is the financial viability of the vendor to carry out the project without interruptions. Feel free to ask the vendor about their financial numbers & strategic direction for the coming years. If possible, visit their premises and talk to the teams who are likely to work with you on your implementation project.
Finally, make sure you review the software licence agreement and negotiate for getting the best deal. Ensure that you have the correct number of licenses for the entire business. Read & consider the renewal clause and end of service clauses carefully as well. Be absolutely sure to link payment milestones to completion of certain features or parts of the implementation. Ensure that the Statement of work clearly defines your requirements and scope of work with no loose ends or ambiguities. Get the commercial & technical plans shared by the vendor evaluated by your IT resource thoroughly before proceeding with the agreements.
Keeping these guidelines in mind will help you arrive at the best-fit ERP Solution for your growing business needs. A well thought-out ERP selection & implementation decision will certainly help you achieve the targeted ROI faster!