The choice of an appropriate ERP (Enterprise Resource Planning) system is one of the most critical decisions that a business can make. An ERP system also assists in handling finances, human resources, inventory, and customer relationships, among others, under a single platform. The incorrect ERP decision may result in inefficiency, high price, and frustration. There are so many choices one can make. Do you know how to choose an ERP system? And you will be making the correct choice?
This is a guide on how to select an ERP system that suits your business needs based on the wisdom of experts.
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Know What Your Business Needs
It is always essential to understand your business needs before diving into the world of ERP solutions. What are the major issues that you require the ERP to address? Do you want to stream your financial reporting, gain additional visibility into your supply chain, or manage customer relationships better? Your choice will depend on the answer to this.
Steps to take:
- Diagram business processes: Realize your existing processes and pinpoint the areas of inefficiency or pain.
- Engage major players: Consult the representatives of various sections (finance, HR, inventory, etc.) so that their needs are taken into consideration.
- Identify desired purposes: Do you need a system that is easy to use, scalable, or do you need a system that offers detailed analytics? It will be beneficial to set clear expectations to narrow your options.
Looking for an ERP solution that understands your unique business needs? Discover how Traqe can help you.
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Match the Size and Scalability of the ERP System
ERP systems are not all the same, and what performs well in one company may fail in another. There are those ERPs that are made for larger enterprises with a complex operation system, whereas others are targeted at the smaller businesses or even venture start-ups.
An effective ERP solution must expand as you expand. The system must be scalable as your company grows, be it in terms of supporting a great number of users, a massive amount of transactions, or by adding new modules.
Questions to ask:
- Which way do you expect your business to grow?
- Will ERP systems support future requirements?
- Is the vendor scalable in price or modules?
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Search for Industry-Specific Features
Most ERP systems have industry-specific solutions. As an illustration, features that can manage inventory, schedule production, and supply chain logistics could be required in a manufacturing business. Equally, a retail organization may pay more attention to point-of-sale systems, integration of e-commerce, and customer experience instruments.
Selection of an ERP that contains features peculiar to your industry will save you time on implementation and customization.
Tips for consideration:
- Find ERP systems that are industry-specific.
- Ensure compliance features are included where they may be necessary in your industry (e.g., financial requirements or safety requirements).
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Test Usability and Uptake by the User
The effectiveness of an ERP system is determined by its users. Should the system prove hard to follow or irritating to deal with in your team, the productivity will be impaired, which will result in resistance.
In selecting an ERP, seek a user-friendly system that is easy to use. An intricate system may involve a lot of training, thus delaying adoption and making it expensive. The interface will be simple and easy to learn, which will facilitate the transition for all.
Questions to ask:
- The question is how user-friendly the ERP system is to non-technical users.
- Does the vendor offer sufficient training and help?
- Does the system integrate with other tools you are already using (email, Excel, etc.)?
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Consider Cloud-Based vs. On-Premise Solutions
There are two broad types of deployment models of ERP systems: cloud-based and on-premise. On-premise ERPs are directly installed on your local servers, whereas cloud-based ERP is physically located in the cloud and can be accessed via the internet.
ERP systems on the cloud have become increasingly popular as they are flexible, cheaper to set up, and simpler to update. You do not have to worry about server maintenance or IT infrastructure with the cloud ERPs. Conversely, on-premise solutions may still be utilised by some companies that have stringent data security needs.
Factors to consider:
- Price: Cloud-computing systems are generally cheaper to build, but can have recurring subscription charges.
- Security: Does the ERP provide the measure of security your company needs? Cloud ERPs are usually well secured, although certain companies may wish to retain data that is sensitive to them.
- Accessibility: Employees can get the system anywhere through cloud-based systems, which may be of great benefit to remote or distributed workgroups.
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Evaluate Integration Capabilities
Your ERP will probably have to exchange information with other systems–either with your CRM or e-commerce platform or payroll software, or a third-party logistics provider. Ensure that the ERP you settle on is able to integrate with the tools and systems that you have.
Things to check:
- Are there pre-built integrations with the existing software in the ERP?
- How simply can the system be connected with external applications or services?
- What does it cost and take to do integrations?
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Pay Attention to Vendor Reputation and Support
The selection of an ERP vendor is not only about the software, but also about the relationship. ERP is an investment that is long-term, therefore it is important to select a vendor that provides good support, frequent updates as well as a history of success.
Things to consider:
- Vendor experience: Length of time in business? Is it a specialist in your industry?
- Customer reviews and case studies: What do already existing customers say about the support and service of the vendor?
- Support alternatives: What type of continuous support do they provide (e.g., live chat, phone support, training material)? Do you trust them with post-implementation troubleshooting?
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Check Total Cost of Ownership
The cost of an ERP system is not only the cost of purchasing it. You will also have to think about recurrent costs, and that is the software updates, customization, training, and support.
Key cost factors to evaluate:
- One-time vs. recurring costs: Cloud-based systems are typically in the form of a subscription, whereas on-premise systems need a one-time license fee.
- Implementation and training costs: What will it cost to install the system, and what will training your own people cost?
- Continuous maintenance and upgrades: Can your staff maintain the system, or will you be required to hire some assistance?
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Demo or Trial Period
The majority of the vendors of ERP provide a demo or trial version of the system. Exploiting this can provide you with a personal view of the system at work and how it would suit you.
Why this is important:
- It is possible to test the functionality of the system.
- The level of its intuition and usability can be measured.
- You will have an idea of how well it will be compatible with your existing tools.
Ready to see an ERP system in action? Schedule a demo with Traqe.
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Plan for Implementation
After picking a particular ERP system, the actual work starts with the implementation. The main challenge is to have a seamless implementation so that you can get a payback in your ERP investment. Ensure that you have a roadmap of how the ERP will be implemented.
Steps to a successful implementation:
- Start small: Assuming that there is a pilot phase or that it can be rolled out in stages.
- Make achievable schedules: Implementing ERP may require months, so do not hurry.
- Engage the relevant stakeholders: It is also important to involve employees at every level in the process so that the system will satisfy them.
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Conclusion
The process of selecting the proper ERP system can be daunting, but it does not necessarily have to be so. Based on the particular requirements of your business, scalability, ease of use, integration, and vendor support, you will be able to make an informed choice that will establish your business for success in the long term.
This will be a major investment, and therefore, be sure to research, demo, and properly evaluate all your options before committing to this. Having the proper ERP system will enable you to optimize your processes, enhance decision-making, and eventually become a growth driver.
Take the next step in your ERP journey. Connect with Traqe’s team of experts today.
