What No One Told You About Selecting an ERP System

Whether your company currently uses spreadsheets and you want to implement your first ERP or the ERP you currently have no longer meets your needs, you’re undoubtedly performing your due diligence… downloading brochures from different vendors and reading articles on how to select a system that’s right for you.

Be wary of materials from consultants who use fear tactics to try to get you to use their services. They want you to believe you couldn’t possibly succeed without their services and, for some companies, this might be true. More often though, the right ERP vendor who has industry-experience, a dedicated team of experts at the ready, and a proven track record of implementation success will be able to guide you and your team to success.

Before you buy, let’s take a quick review of the main factors to be aware of when it comes to ERP implementation.

• Adequate resources: Dedicated personnel and budget ensure not only that the project can be taken to completion, but that it can be implemented in a timely manner and staff receive the training they need to make adequate use of the software.
• Executive champion: Your company advocate with the personnel, budget, support and the power to ensure that timelines are adhered to, training is arranged, and things get done.
• Buy-in: To ensure implementation success, you must have buy-in from all stakeholders, This ensures you have continued support for the project and minimizes the potential for sabotage along the way.
• Change management: Critical because it’s one of the biggest reasons ERP projects fail, your employees have established ways of doing things. The “processes” they’re using may be clumsy, time consuming, and be flawed in a hundred different ways, but your people are comfortable with doing things a certain way—and you’re asking them to change, move out of their silos and understand how the other departments work.

To gain acceptance for the new system, two things are critical:

1. A clear statement of both what’s in it for the company and what’s in it for the employees. Give them time to get comfortable with the software and actively involve them in the project. Let them help define new processes based on their subject matter expertise. Ensuring your team is set up for success and feels part of the solution will help with change management.

2. Which brings us to the second point: training. This must be a major initiative, no matter how “intuitive” or “easy to use” the system is. Training engages people in the implementation process and ultimately increases the value you get out of a new system. Don’t let the cost of training be an afterthought. If not planned for from the get-go, training costs can easily take you over budget.

Whatever your specific reasons, the basic expectation is that by pulling all your business functions into one system, you’ll achieve greater accuracy and streamlined process flows. And with a single database to mine for all reports and analyses, changes in processes, market information, and so forth, your decision-making process will be streamlined as well.

ERP Vendor Selection

In the context of change management, it was mentioned that one of the biggest reasons ERP projects fail has to do with people, not technology. This is especially true when it comes to selecting a vendor. A little-known secret is that many companies that are desperate to replace their current system are actually having vendor, not software, problems. Perhaps with a few simple customizations or upgrades—or even just training on features they paid for but never used—their system may, in fact, be adequate to meet their needs. But lacking continued guidance and support from the vendor, they haven’t a clue.

So what should you look for in a vendor?

• Industry experience: First, does the vendor know your industry? Over the past decade or so, there’s been a tremendous push to integrate ERP with financial systems. At this point, most ERPs you’ll find out there have been developed by financial companies with no real understanding of or experience with your particular industry. The developers can build a system that runs properly but not necessarily do what’s needed, since they can’t differentiate between what’s important and what’s not important in your business environment. Here are some ways to separate the pros from the pretenders: Ask them if they’ve ever worked in your industry (not just selling ERP software) and for how long? Do they ask meaningful and relevant questions or do they sit in the conference room with you, talking features and benefits from a PowerPoint presentation and filling in forms?
• Cloud-based technology: When evaluating software options, choose an affordable solution that will grow with your business. A cloud-based offering provides you with the flexibility and security you need to scale operations. You have no upfront software fees or expensive servers to buy and maintain. Your data is also backed up automatically and hosted offsite for quick retrieval in the event of a natural disaster, fire, theft, or major power outage. Additionally, data is encrypted and backed by firewalls for maximum security, so only you can access it, eliminating worry, saving your employees’ time, and keeping your business protected.
• End-to-end solution: Your business management system is the backbone of your company and should be completely integrated and easy to use. You need software that manages all aspects of your operation, from accounting to purchasing, inventory management, customer service, and delivery. Your team needs easy access to the information necessary to run the business.
• Training: Access to a variety of training options is an important factor to consider when you evaluate software for your business. Make sure that you have access to ongoing training after implementation. To get the greatest ROI from your technology, you will need various training options (online resources, webinars, documentation, on-site training) that allow you to fully utilize the system, learn about new features, and take advantage of product enhancements.
• Flexibility and scalability: Your ERP must be flexible enough to meet your unique business needs and adapt to the changing field service landscape. Ensure your software provider will still meet your business needs as you increase sales, offer additional product lines, or open new locations. Your software needs to scale with your business, so that you can be confident that the investment will still pay dividends well into the future.
• Support: The overriding question is: Will they be there when you need them? Not just during implementation, but afterward. How accessible are they once the project is “finished?” And when is the project finished? When the software is installed? When it goes live? When all your staff is trained? When you know it’s working properly? In general, do they offer the customer care you need and want?
• Recommendations: Besides asking the vendor specific questions about what their ongoing responsibility is to you, ask to speak with current customers whose business is similar to yours. The vendor will, of course, give you only the names of those who are satisfied, but canny questioning can reveal a lot more than you may at first think. Even asking the simple question, “Do you feel as if they had (or have) your best interests at heart?” can be very telling. (Of course, if they won’t give you specific people to call, just move on to the next name on your list.)
• Third-party alliances: It’s important to consider what integrations/ alliances may be available for the ERP you are considering. When your technology company has a relationship with important industry vendors, you can better streamline your processes and increase productivity. As you consolidate and better understand your company’s data, you will be able to effectively analyze that information and make business decisions that drive growth and profitability. With rising costs and increased competition, it is more important than ever to have an ERP software solution that fits your business, can provide valuable business insight, improves efficiency, and grows with you well into the future.

There are countless benefits to implementing an ERP solution, from reducing your operating costs and increasing productivity to optimizing contracts and improving your margins. When you choose the right business management solution, it will allow you to streamline and simplify manual processes so you can focus time and energy on core business activities. Identifying your business goals and completing a thorough evaluation of available ERP software will help you choose the right technology to fully realize the benefits of ERP and grow your business.