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11 August 2018 | in ERP Software

How to Choose the Right ERP Vendor for your Business

How to Choose the Right ERP Vendor for your Business
As you move through your ERP/business software selection journey choosing the right vendor is no doubt a key area of focus for you and your team. Who you choose to go with can have a major impact on the success or failure of your project so it is crucial sufficient time is spent focusing on vendor selection.
 
Here are some key areas to keep in mind when choosing your ERP system & partner. 

Know what you need versus what you want

Base your requirements’ criteria around 3 broad areas:
 
  • What functionality do you require to facilitate mission critical, day-to-day processes? How can the software bring efficiencies to these processes? For example, are repetitive tasks still being handled manually; what role can automation play?
  • What are the current pain points you are experiencing with your existing system that the new system must resolve?
  • Think about your business at a strategic level and specify how your future system can help you to achieve your strategic goals today and indeed 10 years into the future. This is blue sky thinking but rather than getting carried away with functionality presented by vendors you need to make sure this conversation is driven by your vision for your company. A caveat here is to remember to focus on tangible business results – improved service levels, future e-commerce functionality – to ensure the conversation remains grounded in your reality.
With your list of requirements in place it is important that you rank each based on its importance to your business goals and objectives, both now and in the future. This provides for a much more objective review of your vendors’ capabilities, where you are ensuring the software is the right fit for your business, not the other way around.
 

Get out the scalpel – Dissect each vendor

90% of ERP functionality is comparable across vendors, therefore it makes sense to ensure your research takes into account the following:
 
  • What are the key USPs for each vendor? Are they relevant to how you want to run your business? When you speak to customers using their system, can they verify that their USPs add value to their business?
  • Given that functionality can be so comparable across vendors the service element can often be the differentiating factor? Ask other companies using their system how they would rank their support and development offering in terms of efficiency, cost and end result?
  • The implementation process is a critical component of your ERP project and this is people-led. What experience does their consultant team have? Do they adopt a long term partnership approach? Again, ask current customers for their objective opinion.
  • Don’t forget the basics. Where are they located? Will you be dealing directly with the company? Where is their support team based and how are support queries managed (ask for service level details)? What size is their team and what is their staff turnover ratio? What is their turnover, are they growing, have they got a clear innovations roadmap for the future? You need to have confidence that a) your business will matter to this vendor and b) that they are in it for the long haul.

Technology at its core – Ensure your investment is future proofed

Whilst functionality may be quite similar across products it is extremely important that you ensure the technology that the system is built on is future proofed. We have seen customers using legacy systems, where bolt-ons are used to facilitate scale. This is not a sustainable strategy. Query what code has been used to create your ERP system and even use web reviews to assess if this technology will enable the product to scale into the future. The last thing you want to do is put this system in and find that as technology evolves your system becomes redundant after a couple of years.

The devil is in the detail – watch out for any potential banana skins

Is there a limit on the number of support calls? Is there a limit on the number of transactions? Do annual fees increase over time? What are the quoted additional development and consultancy rates post implementation? Is there a commitment to provide domestically-based support services? How regular are software updates and are they provided free of charge? How are updates managed? Do they offer a hardware service to provide a one vendor facility for your ERP project? Can vendors integrate their system with other 3rd party applications you are using in your business?
 

Your newest member of staff – Evaluate the people behind the software

Your ERP system becomes the back bone of your business; facilitating day to day processes in the optimum fashion and providing a platform for you to grow your business well into the future. However, this can only ever happen if the team facilitating the implementation of this system become invested in your company. Judging this can often come down to gut feel. Is the sales guy just trying to sell you software or is he/she taking the time to understand your business goals, processes and nuances to ensure the software is the optimum fit for what you want it to do? Is he/she being upfront in their delivery and providing strong testimonial contacts; related to your industry? Aim to meet the consultant who would be implementing the system on site. What level of experience does he/she have? What rapport would they have with your staff? It is these personal elements that can make or break the successful outcome of an ERP project…think of it like you are hiring a new member of staff… will they culturally fit in with your organisations way of working, will they become invested in helping to achieve your business goals?

It’s not a race to the finish line – Take your time

Selecting your chosen ERP vendor is a complex task. The average time taken can range from 2-3 months to 2-3 years and there are no hard and fast rules in this respect. Don’t feel rushed into making a decision that will impact your company for at least the next ten years to come.
 
  • The right vendor is one that will grow alongside your business, adapting their software to accommodate your changing business processes, whilst also adapting to future market needs/trends. Ensure your vendor adopts such an ethos by not only looking at their technical capabilities; ensure their culture embraces a partnership orientated approach.
  • Take your time to explore, research and build partnerships with potential vendors so that when you reach the contract agreement date you feel excited, positive and confident that your ERP project will be a success.
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