Source: 2014 Aberdeen Group
Implementing a new ERP system is a big undertaking and the process can be daunting, especially if you’ve never been through it before. Our goal is to ease the uncertainty and help you select the best ERP solution for your business.
Here’s a situation we see often – a business owner or management team decides the company needs an ERP system. They task someone in the organization with leading the project. That person heads straight to Google to compile a list of solutions and they proceed to evaluation. Companies that approach their ERP evaluation this way are more likely to either stall on the project or select the wrong solution for their needs, causing pain down the road. Why? Because they’ve skipped critical steps. It’s great to do a little research online, but before you start evaluating systems, you need to kick-off an ERP project internally within your organization.
We recommend creating a cross-functional team of five to eight people. An ERP system impacts each department in your company, so you’ll want input from each functional group to ensure all requirements are met. As you create your ERP project team, look for individuals who understand the processes within their department and can communicate well.
Here, you’ll evaluate your current business processes and systems to determine if you have a clear need for a new ERP solution. This is often easy to evaluate based on where your systems are falling short. To understand whether you’re ready for an ERP system, look at two areas of impact:
Visibility & Performance – Do you have a good understanding of your performance? Can you answer key questions about various areas of the business, based on timely, accurate data?
Efficiency – How much effort is involved to compile key performance metrics and reporting? Are your people operating efficiently, with minimal reliance on manual effort and duplication?
By nature, many people are resistant to change. And while an ERP implementation can be a key element of your company’s growth, it can be costly to proceed if you’re not truly ready.
So, how do you know if your company is ready for an ERP project? Conduct an ERP readiness assessment to understand how prepared your organization is for a project of this scale. If your assessment reveals you aren’t ready yet, shift your energy into communicating the benefits throughout the organization. Helping your people understand why the change is needed and what the payoff is will help them get on board.
You need a clear understanding of what you’re trying to achieve before you can measure the success of your ERP project. For the best results, your ERP objectives should be driven by the objectives of your organization. The more accurately you can define the areas you expect to see improvement, the better equipped you’ll be to select the best ERP solution for the job.
To identify your ERP project objectives, ask yourself:
What is the business objective for implementing ERP?
Have we defined the strategy, including measurements of success?
Now that you have a clear picture of your objectives, you can start compiling your ERP requirements list – the features and functionality you need in your new system. You want to have a clear understanding of what the day-to-day processes look like for your team and what they need to execute efficiently. Be sure to consider the way individuals consume data and interact with the system as well.
While your ERP project team has no doubt compiled an extensive list of needs and wants, not all items will be critical to the success of the project. So, in this step, you’ll define critical success factors – the elements that are absolutely necessary to achieve your goals.
It’s easy to identify things that have an immediate impact on your cash flow, like increasing revenue. Keep in mind that savings don’t necessarily have to translate into a cash value but should impact the bottom line in some way.
With your selection team, take a second pass at the master list of objectives and requirements you identified earlier. Use a numbering system to prioritize the requirements and help you zero in on the true must haves. This will help you identify the deal breakers as you’re reviewing solutions.
Now that you understand what you’re looking for in an ERP system, it’s time to research possible options. Before you start your search, consider what type of ERP makes the most sense for your company. Most of the leading ERP solutions are what we call off-the-shelf – they have a built-in feature set that can adapt to processes across industries. They offer maximum flexibility over time. You could also look at vertical ERP software designed for your industry or a custom-built ERP if you need heavy customization. Keep in mind that the ERP system you choose should support your needs now, but also 10 years from now – flexibility and scalability are key.
While most small to mid-market ERP solutions are sold through a partner network, both the ERP vendor and ERP partner will play an important role in the success of your implementation. Choosing a stable ERP vendor with a strong customer base and a good reputation mitigates the risk that comes with lesser established software vendors.
ERP Vendor – The software publisher that develops and maintains the software.
ERP Partner – Also referred to as a Value Added Reseller (VAR), an ERP partner sells, implements, and supports the software.
At this point, you should have narrowed it down to one or two potential solutions (three max). The members of your ERP project team should clear their calendars to attend the demos. Prepare them for the demo with a recap of your business requirements and objectives, as well as guidelines for evaluating both the system and the partner.
Throughout the sales cycle, implementation and ongoing support, your primary relationship will be with the ERP partner. Choosing the right ERP partner is just as important as choosing the right software. You want a partner that has extensive knowledge of the system and a keen understanding of your business. But you should also look for fit – how well their company culture aligns with yours.
Working with ProjectLine has been amazing for us. They helped us bring all of our teams together quite quickly, kept things simple for us and helped us onboard the system so it’s actually felt manageable.
We need to keep evolving. We do that together with ProjectLine – it’s now a team. As we face new challenges in our business, they’re along with us to help us solve those challenges.
We need business partners to grow with our company and accommodate that growth. That was a big factor in selecting SAP Business One and ProjectLine.
If you’ve followed along with this guide, you’re well equipped to choose the best fit ERP system for your business. As you make your final selection, be sure to check the box on each of these best practices for selecting your ERP system.