Preparing for the ERP solution selection process is the key to success. Here are some criteria to make sure you choose the right software for your organization.
Choosing the wrong ERP solution can have disastrous consequences. That's why establishing the right ERP evaluation criteria prior to the ERP solution selection process is the key to success.
Since so much of the business depends on a company's ERP system, choosing the wrong ERP software solution can have devastating consequences for the business and result in failed implementations. Other results can include loss of product support within a few years, cost overruns and business disruptions due to difficulties in implementing or using the system. In the worst case, the ERP system might not even be implemented, resulting in litigation.
Business objectives are difficult, if not impossible, to achieve if an ERP system does not fit the business. Entering the selection process with clear ERP evaluation criteria evaluation criteria is an important means of avoiding these consequences.
CIOs, executives and IT managers should gather ERP evaluation criteria well before hiring them, says Karol Sudnik, owner of XPLUS, a European technology consulting firm. The process should include forming an internal team to discuss future business outcomes. The team should also include senior management to become advocates for the initiative.
"If you don't have these conversations in a straightforward manner, you might just as well miss what is going on today and tomorrow in ERP evaluation criteria requirements," Sudnik said.
Stakeholders should only consider ERP evaluation criteria after the cross-functional team has identified desired outcomes, the current state of the organization and the future state.
ERP Evaluation Criteria
Here are some of the most important criteria to consider.
1. What are my ERP solution requirements?
You need to inform your prospective ERP solution vendors about your organization and your needs so they can configure, package and price the right ERP solution. Start by identifying key online resources, such as product demos and blogs, that tell your company's story.
Describe your business and processes in general terms rather than creating long lists of specific requirements and processes. Inform potential suppliers about the size of your business, volume of activity and transactions, complexity of various processes, and any unique features or factors. Focus on the processes and requirements that give your business its competitive advantage. These are the things that will distinguish potential systems from each other and where you will look closely at how well each system can be configured to support those unique processes and functions.
Describe the things you like about your existing system - you'll want at least your new system to handle them just as well. Include what your existing system doesn't do (or doesn't do well). Point out any custom applications, functions, or modifications that need to be addressed by standard functionality or simple adaptation (not modification) in the new system. In other words, focus on the things that are unique to your business and assume that the routine things are going to take care of themselves. (You will verify this assumption in the final demos and evaluations closer to the decision point.)
Focus on the things that are unique to your business and assume that the routine things will take care of themselves.
2. Is there a functional fit?
ERP systems are not a one-size-fits-all proposition, so consider the business functions required. For example, a global organization requiring multiple currencies and languages will need different features than a smaller company with a single location.
IT and business managers should look at how the ERP system handles financial consolidation if it is a priority for the company. Reporting and dashboarding capabilities are also worth investigating.
3. How will all my systems be integrated
Your ERP solution will inevitably need to interface with third-party systems, so IT should be sure to factor those systems into its discussions.
The IT department should take an inventory of all systems that need to send or receive data from the ERP system. Ideally, this should happen early in the evaluation process.
IT will also need to understand that it may need additional platforms.
Most SaaS ERP solutions will have Web APIs that can enable easier integration but organizations will likely need a robust middleware platform for integration and mature processes for agile development and continuous integration/continuous delivery. Most organizations still have legacy on-premises applications, so the solution needs to work with those technologies as well.
4. What process can be covered
Process coverage is another important consideration.
CIOs and their teams should evaluate whether they will need separate applications for security, reporting or mobility. This includes the middleware needed for these applications. Other issues to consider are the impact an ERP system will have on the network and infrastructure, as well as how data will flow between systems.
For example, a company with multiple product catalogs and multiple manufacturing facilities must ensure that the catalogs have common naming conventions so that each catalog is a cohesive and accurate representation of each facility.
5. What is your ERP systems technology?
The ERP solution procurement team must evaluate whether the vendor's technology is right for them.
Your company needs to look at whether the product used the necessary technology. Consider ERP solutions such as Microsoft Dynamics 365 FSCM as other modernized systems may still have cumbersome technology that may require programmers to add fields for reporting or other small tasks.
6. What customization options are there?
Another criterion to consider is the customizability of the ERP software and the degree of customization the company may need.
If your company need to be able to customize reports, you need ERP software with such a capability. And there may be other customizations you may need.
7. Does your ERP solution vendor have roadmaps?
A vendor's software roadmaps are another important aspect of the ERP selection list.
Companies should look at a vendor's roadmap, which should include release plans and dates for new features and enhancements.
8. What are the implementation and maintenance costs?
Considering ERP costs is crucial, and some figures can easily be overlooked by the procurement team.
While the cost of the software is important, vendors may underestimate how program management and change management will affect the final ERP solution implementation figures. Even systems integrators can give an implementation estimate that doesn't take into account the internal resources needed. Costs could spiral out of control.
9. What kind support is available?
It's very important to consider how much support an ERP system vendor will provide. Support is critical.
Buying teams should examine whether support is based on a ticket system with SLAs and whether a support team is available is your work hours. Teams should also look at the experience level of technicians and whether a customer council exists. Participating in a customer council can give the company the opportunity to shape the product roadmap.
Companies should also consider how their own employees learn best.
Companies should investigate the type of education and training being provided, Luter said. Many companies upload training videos, but they may need to supplement them with classroom or hands-on training if the videos are not sufficient.
10. Is your organization ready for change?
And the tenth question is – what’s next? Are you ready as an organization for change? How will change management be handled? Will someone walk me through it?
One good example of helping out organization with the implementation of an ERP solution
is XPLUS – check them out – xplus.com. The will surely answer all the above questions pertaining to ERP evaluation criteria.