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Tips for selecting the right ERP software for your business

11/22/2011 at 7:00 am by

Conducting an effective software selection project is the most critical factor when implementing Enterprise Resource Planning (ERP) software. Far too often we see organizations select software based on technology, price, features, and brand. These factors should be considered, but they are secondary concerns. Many organizations spend thousands of dollars on a new ERP system but will hesitate to mitigate the risks that come with it. Before you commit to your next software investment, make sure to follow these five steps:

1. Get Help: Seek help from a professional during the system selection stage, preferably a consultant who does not have an allegiance to a particular brand or publisher. If it is difficult to find an independent or product agnostic firm then at a minimum use a firm that has ERP implementation experience. The knowledge that ERP implementation specialists have is invaluable. They typically have seen so many scenarios that they are able to provide advice in situations which may not be obvious to a typical business. Get references from the selected firm to make sure they have experience in software selection for similar types and sizes of organizations to your own.

2. Analyze your business requirements: Focus on the financial and operational needs of your company and ignore the technology that you might be implementing. Considering potential technology can bias the requirements analysis,  and ultimately you want all your business requirements on the table. It’s possible that a new ERP system may not meet all of your requirements, but if they are not all considered, its a certainty that some of them will not be met.

3. Document your current business processes: Ensure that your current business processes have been assessed and documented. This may uncover areas of inefficiency, and it may also reveal processes that the new ERP system must be able to accommodate. The new business process should be documented during the implementation so all staff are aware of the changes that will need to be made.

4. Evaluate vendors: Likely more than one ERP software package will meet many of your requirements. Do not evaluate only one vendor but the top three to five. Sometimes an application may not meet all your requirements but the publisher or implementation firm can provide intangible benefits that outweigh that lack of functionality. A very important element of choosing software is choosing the vendor. The organization you choose will be a partner for many years. Choose someone with common ideals.

5. Assess pricing: There are many different types of software that carry very different price tags. Tier 1 software costs will be in the six-figure-and-up range, whereas entry-level software may cost less than $100. Make sure you have a budget and make the vendors aware of it early so they can eliminate themselves if they can’t meet your budgetary requirements. Implementation services will also be part of the total price tag with most ERP packages, so make sure you have factored that into the equation.

Ultimately many organizations do not have the funding or budgets to hire a professional firm to conduct a software selection. Regardless, the above process should be followed by an organization as much as possible to prevent a potentially huge waste of time, money and effort.

If you have any other software selection tips, please feel free to comment.

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About the Author

Glen is an accountant and Sage Accpac ERP and CRM expert. He has worked in the accounting industry as a public practice auditor, tax specialist, and controller. In the mid 1990s he moved his focus to technology and became an ERP consultant for Deloitte and Touche. He moved to Plus Computer Solutions in the late 90’s and purchased the company in 2003.

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