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ERP Selection – How to choose the right one?

ERP Selection - How to choose the right one

Choosing the right ERP solution is a key component for a successful ERP implementation. However, ERP selection can be an overwhelming task with so many options available today, and many times, implementations that fail to meet expectations and organization needs are a direct result of poor ERP selection.

In many ways, ERP selection is like investing in a Stock or Mutual Fund. The goal is to invest over the long term and get a reasonable return while preserving the capital. Careful research and due diligence are crucial prior to investing to find the correct investment, ensure that the investment is safe and achieve a reasonable ROI. The same applies to ERP Selection – it’s an investment that should ideally return benefits for your business over the long run, given that the right one is selected and then successfully implemented. Research & due diligence here includes addressing the following questions:

– is the solution the right fit and in alignment with your organization’s requirements?

– is the solution scalable and can it grow with your business?

– is the vendor providing the solution reliable on the long-run?

– what is the vendor’s track record in implementing the solutions offered?

– what is the vendor’s support framework like post-implementation?

ERP selection should focus on finding a system that is industry-specific, with tools and features designed to solve your business requirements. The following are a few points to consider during the selection process.

Understand & Identify Pain Areas, Needs & Requirements

Even before the selection process begins, it is vital to understand & identify the current pain areas, business processes, needs, and requirements. This will define the scope of your project and the scope detail will influence the quality and detail of the vendor proposals. When identifying the needs & requirements, a clear distinction must be made between “must-haves” and “value-added” (good-to-have) functionality to help compare different solutions.

Decide Cost / Budget

Cost is a key factor and it is very important to ask “How much will it cost to implement the ERP System?” – since you will want to compare the systems that are within the price range budgeted.

Data Preparation

Preparing data for migration into the new ERP system plays a key role in successful implementations and avoiding delays and budget overruns. Although migrating data is a part of the implementation process, now is the time to start planning it.

Identify & Evaluate ERP Vendors / Solutions

ERP solutions can be narrowed down and short-listed based on selection criteria including your business requirements, industry focus, and price range. However, it is important to check the vendor’s reputation, industry experience & specialization, and solution scalability as well.

Taking the time to evaluate ERP demos and carefully assessing the features available in the system against the business requirement scope is crucial. Provide industry-specific business cases to the ERP vendor and ask them to prepare demos that are tailored to you instead of generic demos so that you can see how easily the system can be mapped to your processes and what kind of changes and customization might be required. Too often, ERP systems are selected based on market hype, price or a flashy UI – but without the correct fit, the company is left with implementation delays, budget overruns and expensive customization for a system that will eventually fail to address the actual business requirements.

Setting Realistic Expectations

Realistic expectations need to be set with respect to the scope, budget & time-line required for implementing the selected solution. Vendor promises and hype should be carefully examined since the time required for implementation is dependent on a number of factors including but not limited to the ERP solution selected, data preparation & accuracy, organization size, number of users, user resistance and change management. A clear roadmap & setting realistic expectations will help avoid expensive implementation failures.

The right ERP selection ultimately reduces your total implementation cost, maximizes your ROI and helps your business to grow.
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