An enterprise resource planning (ERP) is a software that is sure to leverage the business by helping to align the processes and creating efficient data tracking systems. Choosing the right ERP is important for a firm as it is an investment that is meant to fetch the results for a long time. Given the complexity of its implementation and the costs involved to do the same, the business must select several ERPs, compare them and then choose the best-suited one. This is an ideal scenario. But how can the firm derive at the crucial factors that must be considered during the process? Here are few of them. Read them and make your choice.
- Understand the features: When the firm decides to choose an ERP the first and foremost factor to be considered is the working system of the same. Each ERP has several modules with a set of functions. The firm must know which of these functions will be useful in making the operations efficient and fast. Based on the list of required functionality the firm must then discuss the costs with the vendors. Not all features will be useful. The firm can pay only for the functions it wants to use rather than paying for a huge package. Once this is analysed and sorted the firm can move to the next consideration. The ERP must also ensure usage of the data from several other devices such as mobiles and laptops. Most of the vendors provide these. With the help of the data sharing and reporting feature the firm can exploit the ERP to the most possible extent and the entire team can stay connected at all times.
- Breaking the costs: It is also important that the firm makes a list of suitable ERP software and the price that it will have to pay. The firm must have a pre-set budget based on which it can then decide whether to purchase the ERP or not. There are several costs related to an ERP apart from licensing. Few of them are training costs, data system costs, infrastructure costs, maintenance costs and many others. The firm must compare the pricing of the packages that is being offered from the potential vendors and choose the most apt one.
- Data migration and integration: In this stage you have to understand how the potential ERP vendor will transfer the existing data into the new system. This will consider the implementation process. Most of the businesses opt to implement the ERP module by module to ensure that there is not halt on production. The vendors must be able to provide you the exact picture and should be able to tell you the whole plan. This plan maybe further modified to suit your firm’s requirements. It must also be made clear that no data is lost during the transition process. Loss of data might prove to be quite expensive for the firm on the long run. Also the firm must consider the fact that the vendors are able to offer technically synchronising platforms and also must ensure that they are compatible with other third party applications that you might use in the near future. An incompatible ERP will prove to be inefficient and the firm will suffer by picking up the same.
- Customisations: The ERPs come with a standard set of features. It might happen that these features will have to modified or updated to suit your business environment. Not all customisations or extensions will be free. This has to be discussed in detail else customisations in itself will need heavy investments. The same applies to future upgrades. If the vendor is not offering upgrades within the warranty it will simply make the ERP go obsolete over time. This too needs to be carefully considered by the firm.
- Calculation of Return on Investment (ROI): It is tough to ascertain the precise ROI at the earlier stages of implementation. However, this will help the firm to analyse and understand the best working ERP for the firm. You should know how through the progressive years there will be a sustained ROI. With a comprehensive ERP package you must able to reduce the IT related expenses as it can make your system efficient and robust.
- The vendor and the support system: It is very important to know what the vendor is capable of and what kind of support system they have in place for your firm. It becomes crucial as ERP needs lot of money and any firm cannot afford to redo it again and again. Feedback from users who have already used the services from the vendor will help the firm to understand the strong and weak points of the ERP vendors. Based on the feedback the firm can choose the vendor whose services align with the business needs. The firm must also ensure that it gets a good ERP consultant who is capable enough of understanding your nature of business and accordingly train and support the employees. Expert ERP consultants need to be paid hefty fees which is also an added cost to the firm. Hence, it is extremely crucial that you pick the right ERP partner who is dynamic and is able to resolve your issues. The firm can either choose SaaS services or in-house ERP systems based on their affordability and ease.