Guidelines for choosing the right ERP solution

Choosing the right ERP system is usually a process which raises many questions. Which ERP solution best suits the company? When is the best moment to start the implementation? How much budget can you allocate for an ERP? Of course, the list can go on.

First of all, let’s look at the moment you decide to contact an ERP software provider. Most managers take this step at a time when problems (which are easily justified by the absence of a company’s resource management system) already impact the business flow. In a critical situation, decisions can be rushed, the assessment of available solutions can be less than objective, while the implementation of the final solution can skip important aspects which later prove to make a negative impact on the ERP performance.

This brings us to the first aspect involved in the choice of an ERP:

1. The time and planning of the acquisition

Best case scenario, a system which was somehow superficially implemented in time of crisis can be adjusted to the requirements of each department. Most inadequately planned implementations do end, unfortunately, with the replacement of the inefficient ERP solution with a system that performs much better. Of course, the loss caused by a failed implementation varies from case to case.

This is why we recommend any manager to carefully plan the acquisition of an informatic system in due time, before reaching the point where the pressure of slow processes and inherent low levels of productivity and profitability is felt.

2. Identifying problems at organisational and departmental level

In more than 15 years of experience, we have learnt that each organisation is unique, and even when faced with two companies with the same profile, with the same number of employees and a similar turnover, the difference between their resources and management is unveiled after a preliminary analysis of the company and its requirements.

A realistic, informed approach of the problems necessitating the input of an ERP is the starting point of a successful implementation. Usually, this involves: a close study of process development in each department, an analysis of activity reports for the past 12 to 24 months, feedback from employees and department managers, feedback from partners and a questioning of how the competition manages its resources.

3. Defining necessary functionalities

In order for an ERP to bear a quantifiable impact over organisational productivity, the system must lead the way to the automation of certain processes. Defining the functionalities incorporated in the company’s desideratum for the implementation is an important factor, which already limits the list of ERP systems which would comply to technical requirements.

4. Flexibility and implementation time

One of the foremost important qualities of an ERP system is its level of flexibility and adaptability — the more flexible the system, the bigger the chances for the implementation to achieve its purpose.

You should focus on solutions with customisable modules, with parameters and applications which can fully adjust to the terms. Also, a gradual implementation, which does not imply a massive change of the process development and/or a certain on-hold time or a partial functioning of the company’s activities, is desirable.

5. The efficiency and availability of technical support

An implementation does not end with the delivery of the solution and user training. According to the company’s profile and work volume, one may need 24/7 technical support or a dedicated account manager, 100% familiar with the particularities of the implemented ERP.

6. The budget allocated for the ERP implementation

When you have moved on from the above criteria, you are certainly left with no more than 2 or 3 ERP options which seem to deliver the same value, yet the final differentiator is, as expected, the cost of acquisition. An ERP solution should significantly increase company performance and therefore, profit. Still, the information which most ERP providers will not disclose easily is what happens if the ERP solution does not deliver the expected productivity, and even more — what if it impacts the company’s activity in a negative way, which may sometimes extend to more areas than the usual loss caused by an unprofitable investment.

We recommend you to adjust the budget you can invest in an ERP by taking into account the difference between the estimated turnover with the ERP implementation and the respective turnover estimated without it. The budget for the ERP software should be at somewhere between 10-30% of the difference calculated between the two forecast turnovers.

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