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9 Tips for Choosing the Right ERP System for Your Business

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Choosing the right ERP system can make or break your business. You may have experienced an unsuccessful implementation so you know first hand. Are you thinking about an ERP system for your business?

There are smart ways to choose the right ERP system. ERP, or Enterprise Resource Planning, helps businesses integrate operations, marketing, and financial systems together across the company.

The right ERP system will help your business improve productivity, management, and your bottom line. With over 200 ERP systems, it’s important to make sure you are choosing the right one before making an investment.

If you want to improve management and implement an ERP system, it won’t happen overnight. With strategy and insight, it may happen faster than you think. To give you an idea of the time it takes, an ERP selection and implementation may take 6 months to two years.

The decision may impact your company for years to come. It’s not a decision to take lightly. Before making any major infrastructure investment, you should do your research. Here are 9 tips for choosing the right ERP system for your business.

9 Tips for Choosing the Right ERP System

Choosing the right ERP system should be taken seriously. Before you select an ERP system, make sure you have gotten clear on the system your company needs. Like anything else, it takes work.

The decision should not be done individually. The best ERP implementations include managers or directors from each area of the company from the start. After all, it is an Enterprise Resource Planning system.

For example, an ERP system includes processes essential to running a business.

The system includes:

  • Inventory & Order Management
  • Accounting & Financials
  • Human Resources
  • Customer Relationships and more.

There is nothing to take lightly here. At its most basic level, ERP software integrates these functions into one system to streamline processes across the company. The goal is saving time, increasing productivity, and bottom-line impact.

These 9 tips for choosing the right ERP system will help you make sure you make the right choice. Before you make the investment, take a look at this checklist.

1. Start with the Top

Getting upper management support is important. It’s important from the start that the tone at the top is both supportive and driving accountability for an ERP system. The best ERP implementations start at the top.

People at every level increase their engagement with the project and implementation more when management is driving the initiative. This doesn’t mean executives need to know every line item in the project.

They do need to be aware of the department heads involvement, weekly status, and impacts to the project on-time and on-budget implementation.

2. Outline the Scope

Before you start asking for requests for proposals for your ERP system, outline the scope. When you outline your scope, focus on business processes and system requirements. This will help you narrow down what systems will and won’t work for your company.

The more specific you are, the better your proposals will be. When a vendor works with you, they are a partner in your project success. Getting the up-front requirements correct across processes and systems will help the project kick-off well.

One of the biggest failures with ERP systems is missing requirements upfront leading to delays and budget overruns. Make sure you include department heads and IT in the requirements process.

Don’t make the mistake of selecting a system on market buzz, appearance, and price alone. Some of the best ERP system implementations include being industry-specific and meeting your business needs.

3. Change Management

Change management is essential to include in your planning process. Implementing an ERP system isn’t easy. The impact to organizations before, during and after implementation is massive.

Consider the impacts day to day during the implementation. If you don’t know ask for input from IT on the best way to roll-out. Factor in feedback from operations. Think about deadlines for operations and financials.

Make sure you communicate at pivotal points to teams and employees on what is happening, how they will be impacted, and the long-term benefits. It’s important to show any pain points are worth it in the long-run. The earlier you get buy-in, the easier the process will be.

4. Internal ERP Champion

Right when the organization starts considering an ERP system, assign a champion. This will help the company coordinate efforts from the start. Make sure you have an internal champion or team. Do not solely rely on the vendor’s project manager.

Select someone who is knowledgeable about processes and systems, and comfortable managing others. The internal project manager will be responsible for gathering requirements, learning the new system, managing data conversions and coordinating training for the company.

Many companies will make the mistake of putting all their time and energy into selecting software and not managing the process. It’s important to have an internal team managing the entire process across departments.

5. Ask for References

With an ERP system you are seriously considering, ask for at least three references. Make sure you ask the customers what went right, what went wrong and what they would have done differently.

If a vendor can’t give you three references, that’s a good indicator they are not the right fit for your business. If you are part of any associations, ask trusted friends for any referrals for great ERP systems as well.

6. Evaluate Your Options

When evaluating ERP systems, make sure you look at anywhere from 3-10. Present the vendors with your requirements and review their proposals in detail. Ask for fixed fee arrangements. This will challenge the vendor to dig deeper into your organization in advance.

Determine if all systems integrate. Analyze any legacy system issues. Review and analyze reporting and metrics. Dashboards are an overlooked area by organizations that may later add to costs.

Make sure you outline all specifics in the contract and scoping document to prevent any unpleasant surprises. It’s better to take the time needed on the front-end with requirements, options, and contracts than to pay for it later painfully.

7. Customize with Caution

Any vendor you evaluate for an ERP system, customize with caution. Customization increases time, budget, and unknown factors. Some systems may require customization for something you need vs. another system will have it included.

Make sure you ask various vendors. Take the opportunity to review your processes to determine if customization is needed, or if it’s time to simplify and standardize. That’s one of the benefits of ERP systems, to begin with.

8. Make it Mobile Friendly

Don’t forget checking to make sure the system is mobile-friendly. With mobility increasing, having access to ERP systems on a desktop-only doesn’t work. You want to have a system that allows access on smartphones too.

9. Take the Time to Train

You can have the best system and fail with training employees on it. This part is just as important as getting the requirements for the system. The internal champion will be in charge of the implementation and training of the ERP system.

It’s important to consider which departments should be rolled out first and at what times. Consider running a test pilot in a small location or department. Performing user acceptance testing in general and pilots are smart in any implementation process.

Outline a clear training program with regular updates for employees. Make sure you communicate regularly with employees. It’s important to also review roll-out against busy times and holidays.

The Right ERP System for Your Business

The 9 tips to make sure you implement the right ERP system for your business will set you up for success. Take the time needed for each step for your business.

It’s important to create and cultivate a culture of buy-in and accountability from the start. To improve your chances for success with your ERP system, follow these 9 tips.

What action will you take next to have the right ERP system?

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