Today, we’d like to discuss some of the considerations for selecting your first ERP system, moving beyond the purely accounting focused packages that companies frequently start with. Recently, we discussed some of the benefits of ERP for SMB organizations, with an emphasis on improving results. This article focuses more on key factors to consider before making a selection and purchase, including selection of an experienced ERP Implementation partner to help with your installation.
Have clear requirements for your ERP project
Requirement definition is critical to achieve success with a new ERP solution. This requires a fairly narrow definition of key success factors, and ensuring those goals can be met with the solution being selected. There are a lot of great features in modern ERP solutions, and it is important to understand how these features contribute to project goals, but also critical not to let those features distract you from your objectives. Ensure your upper management team is heavily involved in the core success factor definition for the best clarity.
Have a realistic growth forecast
ERP solutions are frequently sized based on the number of transactions being processed. Have a good understanding of this metric, and how it fits with the solutions you’re looking at. If you have great success in the next 2 years, you’ll want your system to grow with you (including the addition of modules that support specific areas of growth). If you’re facing moderate growth, you want to ensure you’re not paying for a system that is far too large for your organization. While many ERP providers offer “solutions for every tier”, pricing is still a factor, and typically, you’ll see better success from a solution that focuses on your size organization.
Select a partner capable of providing proper attention to your project
Partner selection is critical, and will exert a massive influence on the success of your project. Ideally, look for partners with experience in more than one solution, particularly if you’re looking for a less biased opinion about software fit and capability. Industry experience & departmental experience are also important considerations. If a certain module is central to your success (remember, we’re moving beyond accounting systems here), ensure that the partner has the training and experience to deliver with that solution. As you get closer to selection, meet the resources who will be assigned to your implementation project. If your plan includes migrating functionality from legacy or homegrown applications, be sure you inquire as to their custom functionality experience, and what types of similar engagements they’ve worked on in the past. Resource availability is another critical component, get a feel that for the resources you’re working with, your installation will be their top priority.
Firmly understand how ERP features interact
Lots of solutions provide enough features to “check off all the boxes” on a requirements sheet. However, depending on how a feature or module is constructed, it may not precisely fill the need you wanted. Is your goal to have sales users only in a CRM system, with full visibility to ERP data? That’s very common. But what about creating a quote or a contract? Does the CRM module support these additions? Or will additional licenses and training be required to get the sales user to be able to create the the content they need to complete a sale? If you require that Module A interact with Module C, get a firm understanding of how that process works in the solutions you’re reviewing. Sometimes you’ll find that the only way Module A interacts with Module C is through Module B, which can wind up expanding the number of licenses and amount of training required to meet your objectives.
Plan for user training & support
This sounds simple, but so often resources get busy in their routines, and don’t dedicate proper time to training on a new solution. At it’s core, ERP and it’s related modules are tools. The better trained an employee is on the tool, the more effective they’ll be in using it. Reference guides are handy, but if many of your users are only working off of simple instruction sheets 3 months after you’ve gone live, you’ll probably notice a level of dissatisfaction with the tool. Teach them, get them comfortable, and allow them to understand how the software can and will make them, and their co-workers more productive.