5 Things to Consider when Choosing an ERP Solution
1. Define your business processes to find the ideal ERP solution.
It sounds simple: study your business processes blueprint (as-is), analyze potential of ERP solutions (to-be), and pick the one that takes you from where you are to where you want to go. Analyzing the gap gives you a good measure of how far you’ve improved from your current position, and you have a quantifiable measure of your ROI decision of implementing an ERP solution.
Simple enough, right? But in reality, as a small and medium business you most likely don’t have neatly organized processes and building a blueprint is a project on its own. Do it! It will already lead to improvements in performance (prior to any ERP solutions) and will make it easier to identify pain points that you want your ERP solution to target. An ERP solution won’t tell you how to run your business, much less how you have been running it, but getting one will force you to clean house and organize your processes.
2. Understand the questions you are trying to answer with an ERP Solution.
We don’t get into projects of large scale without ambition to address and finally leave behind what has been nagging at our success. Any project starts with identifying the pain points to your success and prioritizing the order in which you are going to tackle your problems. These problems will serve as a measure of scope and success for your project. And when you are asked what would you improve about your operations, hopefully you go beyond “grow revenues, increase productivity, and improved efficiency” (all worthy goals, but symptomatic and not causal).
If you are seeing ERP solutions as a magical tool for these generalizations, you are missing the opportunity to make this venture custom to your needs and wants. To get at what is causing the issues you are looking to solve may be straightforward or take a full-on discovery process. The important thing to remember here is that this is about you and your organization getting somewhere and the reasons why we set out shouldn’t become fuzzy during the journey
3. Changing Business Solutions provider is OK and may be worth your while.
You probably already license some kind of information management system to help you run your business. Maybe you’ve invested in some off-the-shelf accounting software, or online-based CRM, or other legacy system. These were adequate when the economy was booming sending clients your way and hammering out your vision for the future seemed almost self-fulfilling. Now that urgent times mean new solutions, don’t be stuck based on the decisions you made in the past. Consider all options, all providers and software.
Installing or redesigning your ERP solution is a major step, a rite of passage, and it’s important that you enjoy it and that again, you make it about your needs and your wants to get you where you are going. It’s not about what you’ve done, but what you are going to do and the ERP solution you choose should reflect that, even if it means letting go of systems you’ve had in the past. In the long run, it will be worth it.
4. Who will be your team?
Even though ERP is an IT solution, it hardly concerns the IT department alone. When planning for investing in an ERP solution, keep in mind that it will require a lot of people resources for it to take you to your dreamland of results. A good mix of top management, those that understand how everything is going to fit together through your organizations business units, and selected end-users, will keep you on track so that your overall tactics match the objectives you are going after. Who will be your project leader? Who will be the sponsor? In the end, decisions are going to have to be consistently made, and a well defined hierarchy will ease the pain when deadlines start to loom closer.
5. Understand the total cost (and benefits) of choosing and implementing an ERP solution.
The cost of an ERP solution may seem (and be) a huge hurdle for a lot of growing businesses. Again, it’s important to know the value that you are gaining from it. Understanding your business processes and issues you are targeting will highlight the benefits, but you still have to understand the costs. Look here for a good summary of the total costs and benefits.
As you can see there are a lot of costs that are indirect, people hours, maintenance, phasing out old systems, so it’s important to carefully understand and analyze these costs to make sure no surprises affect the project, or the user’s perspective of the solution.