5 Essential Questions to Choose the Right ERP for Your Business

Are you prepared to choose the right ERP system for your business? Asking these five essential questions will guide you through the selection process, ensuring you find an ERP solution that fits your needs and supports your growth.

Buying an ERP system isn’t something you can do quickly if you want to get a good fit. It’s a process. However, it doesn’t have to be complicated or take a long time. Here are five questions you can ask to help search more effectively.

What does your business need?

You can’t buy the right software if you don’t know what your business’ needs are. For example, some businesses like the accounting program they’re already using and would like an ERP system that integrates with it. Others may want to track their inventory. If you know what your company needs, then you’ll know what features you want your ERP system to have.

Most ERP solutions are modular, with a cloud-based infrastructure and a subscription model. This gives your business the ability to customize the modules you purchase to match the functions and departments of your business, and to offer the features and benefits you need. This structure allows you to minimize upfront investments and to adapt your ERP solution to your business as it evolves, with increasing functionality. Conversely, if your business changes its model and you no longer need certain modules, the cloud-based subscription model of most ERP solutions allows you to drop the modules you no longer need.

Matching the right modules to your business involves outlining your business’ processes. If these processes are not clearly defined prior to the project, the implementation team won't consider these aspects of the business when mapping the system. During the validation stage, partners will find that users aren't performing tasks as they expected, requiring modifications to the system and making the project take longer.

Your company also needs to define the type of reporting and dashboard capabilities it will need and determine if there are custom reports that will need to be configured within the ERP system. Talk with the vendors about reporting and dashboard capabilities, as well as the number of business users you’ll need to accommodate.

What could your company do better?

What are your objectives for improving the way you operate? Think about the strengths of your business that you’d like to emphasize, as well as the weaknesses your business could improve upon.

The dashboards mentioned above will help your track changes over time, but whatever metric you want to improve needs to be in your new ERP software, or those dashboards won’t do you any good. Whether your concern is about inventory, accounting, or anything else, make sure you ask about how an ERP system can handle your shop’s needs in those areas.

Are you accounting for the people and the process aspects of implementation?

One reason for unrealistic expectations with a new ERP solution is that many companies are mainly focused on the technical aspects of implementation. If you want to achieve expected ERP business benefits, you must account for not only the technical aspects but the people and process aspects.

Make sure you’re not basing your timeline and budget on overly optimistic estimates. The only way to have realistic expectations is to build them from the ground up within your company. Integrate an effective communication plan into each phase of the implementation project. This may involve weekly status meetings between the project committee and the implementation team from the date the project kicks off. Both the implementation team and the project committee must come to terms with realistic expectations about the project and agree upon priorities.

If business leaders aren’t discussing the implementation with the project manager, neither party will be held responsible for ensuring milestones are met. Also, if the IT department is the only team engaged in the project, this can cause problems. IT teams understand technicalities, not how to gauge and resolve contingencies in business processes. This is where business leaders from all departments will need to be held accountable for participating in the adoption of the ERP system.

What are the cost, cash flow, savings, and ROI considerations?

Project the resulting financial benefits the business will be expected to generate and accrue over time with each candidate ERP solution in place. In terms of return on investment, assign cash flow and/or cost savings values over time to the items in step 1. Strongly consider labor cost reductions, improved cash-to-order cycles, and any other new efficiencies. Assess the financial risks of the project and weigh them against the potential rewards for a full understanding of the financial implications of your ERP decision.

What are the track records of your competing ERP vendors?

Vendor support from system selection to training, implementation, and ongoing technical and sales support are all essential to your company’s ability to optimize ROI with your investment. Choose a vendor with a history of success in your industry that can provide references to give you honest appraisals of the product and service quality. Broad, deep offerings are also indicative of a quality vendor that should be around to support your solution and your team.

Any good ERP salesperson will ask you questions to help find the best fit for your business. If you’ve already done your internal due diligence, going over these questions with each potential vendor can be a smart final step in choosing the right ERP solution for your business.

In conclusion, asking these five crucial questions will help you navigate the ERP selection process with confidence. By understanding your business needs, improving operational processes, considering costs, and evaluating vendors, you can choose an ERP system that drives your business success.

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