What is an enterprise resource planning (ERP) system? In a nutshell, it’s a consolidated platform that brings all of your essential business processes together to optimise the flow of your daily operations. ERP unifies your different data points into customisable, role-based dashboards, from accounting and procurement to human resources and compliance. Choosing the right ERP system involves knowing exactly what exactly this centralising software can do.

Enterprise resource planning tools can help your business gain new efficiencies, streamline data flow, and increase teamwork. All while keeping customers happy and increasing profits. Modern ERP systems now completely interconnect with each other. This means they’ll be able to streamline every aspect of your company’s operations.

All departments can access the same real-time data from a central, shared database. ERP can be used for a variety of tasks in addition to manufacturing and supply chain management. In the next section, we’ll look at how to select an enterprise system.

There are various decision points and aspects to consider when choosing an ERP system. Where should I start? What are the most important selection factors that you and your team should be aware of before getting started? Let’s take a look at some of the factors to consider when choosing the right ERP system in more depth.

Factors to consider when choosing an ERP system

The ERP systems available now are more robust than they’ve ever been. You’ll find that many ERP suppliers provide industry-specific capabilities that you may use right away for a quicker setup. Below are some of the sectors and business services that some ERP systems have been specifically created for.

  • Accounting and finance
  • Reporting and high-level analysis
  • Project Analysis
  • CRM (customer relationship management)

So, of course, choosing an ERP system that’s most suitable for your sector and your needs is vital. Yet, even for businesses not operating in the sectors we listed above, there are still so many benefits.

ERP selection checklist: All the potential benefits

You’re undoubtedly asking, “What will ERP achieve for my organisation, what exactly will it do?” Let’s look at a few of the most important ways that an ERP system can assist you in achieving your business objectives and help you in choosing the right ERP system.

  • Saves time for your company

When a time-sensitive issue develops, how do you now respond? Are you able to get to the information you require quickly? Even if you do have the information you need at hand, are you certain it’s the most up-to-date and correct version of the data? You’ll never have to waste time looking through different versions of data to obtain the information you need. With an ERP system, all you need is already in place. Instead, you’ll always know where to search for all the real-time insights you require.

  • Makes business processes more efficient

Every process in a successful organisation feeds into the next. In other words, certain actions, whether applied to generating a report, manufacturing a new product, resolving a customer complaint, or reaching out to a sales lead, trigger follow-up actions. Prior to ERP, these processes were frequently fragmented and inconsistent. You may create and streamline procedures with ERP, and you can obtain visibility into every aspect of your business, from order management to customer service.

  • IT cost consolidation

You can integrate most, if not all, of your business functions into one system with ERP. You won’t have to spend money on many systems that each require dedicated personnel, infrastructure, and support. This can result in money in your pocket, which you can put back into your business. You’ll also save money on end-user training because there will be fewer systems to learn.

  • Increases the accuracy of data

It’s no secret that manual data entry is time-consuming and tedious. Human mistakes are also a risk. Even one wrong letter or number can have serious effects on everything from payroll to time management. By automating the majority of your fundamental tasks, an ERP system eliminates this risk. You may confidently enter, manipulate, and exchange data this way.

  • Increases team productivity and collaboration

Your workforce is the lifeblood of your business, and ERP allows team members to collaborate more effectively. Employees can, for example, communicate and receive data between departments without being slowed down by inefficient processes.

Choosing the right ERP system

With so many ERP options on the market today, picking the right one for your company can be difficult. While many businesses believe that any software will work and that their organisations would just adapt to the software’s functions, ERP failures have been publicly documented, indicating that this isn’t the ideal answer.

Furthermore, because ERP should be a transformational business endeavour that provides your organisation with significant competitive benefits, the decision should not be made lightly or based on incomplete information. Working out how to select an enterprise system that suits your business needs is key.

So, what’s the greatest strategy to identify the ERP system that best fits your company? Here are seven steps to help you select the best software for your needs:

Conduct an evaluation and analysis of the procedure

Because ERP is primarily a business project, you should first establish and describe your present business processes, weaknesses, and strengths. This analysis should also contain your vision for the future of your processes (the “to-be” state) as well as the business requirements that go with it. Potential software vendors should eventually use these processes and requirements to demonstrate their product’s capabilities in the context of your business needs.

Implementation planning is key

It’s critical to create a thorough project plan that covers not just the actions necessary to install the software, but also the activities necessary to verify that the solution is fully functioning, tested, and accepted by end-users. Create this plan long before you make your final software decision. This means you’ll be completely aware of the costs and commitments necessary to complete the project successfully.

Everything from business process and workflow design to data migration, conference room pilots, several test iterations, and essential organisational change management activities. All these should be included in your implementation project plan.

Examine technological compatibility

Although ERP should be viewed as a business rather than a technological project, it is critical to understand how a potential software solution will integrate with your existing infrastructure. If you’re a Microsoft shop, for example, ERP software built on the.NET framework is likely to be a better technological fit.

Recognise your overall cost of ownership

ERP software sales reps will downplay the costs and risks connected with purchasing their software during the sales cycle. However, accepting potential expenses early in the process is much easier than accepting costs after you’ve already committed to a solution. Watch out for implementation fees, hardware updates, backfilling your project team personnel, software maintenance, and other “hidden costs”. These all add up.

Keep track of the new system’s prospective business benefits

If you don’t measure it, you’re unlikely to succeed. ERP implementations are no exception. Your company is probably considering ERP as a method to cut expenses, enhance revenue, or scale for expansion, and you should estimate and assess benefits against these measures if you want to maximise ERP’s potential.

Seek out objective and unbiased advice

Talk with co-workers, employees, and other contacts about the software or services they use or would recommend for a firm like yours. If necessary, conduct internet research or employ an ERP professional. In any event, if you haven’t worked with ERP before, don’t assume you know everything. To confirm what you’re hearing from software sales staff, look for other impartial ERP counsel.

Maintain a flexible mindset

While this may sound like dating advice, it is equally applicable to ERP software selection. Popular opinion tends to suggest that there are no more than two or three major ERP software providers. However, despite the fact that two to three software companies control the majority of market share and marketing money, there are at least 70 viable ERP software options on the market, each with its own set of features and strengths.

Too many businesses pick a solution based on the brand name or what their competitors are doing. Instead, businesses should think about the solutions that would best satisfy their own business needs and sources of competitive advantage.

Key Takeaways

Before picking an ERP for your business, you must conduct a thorough and reasonable examination of the features and functionalities of the ERP systems you are considering for adoption and installation. It would be incorrect to compromise or change your established business flows and processes to attempt to fit a new ERP system.

Choosing the right ERP system is easy once you’re well-informed and are willing to tackle the choice as a project. That means lots of forward planning and listing all the factors to consider when choosing an ERP system.

With our ERP system checklist, you can work out how to select an enterprise system that will offer your organisation everything it needs. All it takes is good planning and keeping this informative guide to hand.