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10 steps to selecting the right ERP software

Finding the right ERP software for your company is a crucial process. With many ERP software vendors in the market claiming that their offer is the best, companies have to have a foolproof process to help them make the right decision to select the best software that suits their business requirements. 

Below is a 10 step process any organization can use to filter the best ERP software for their organization regardless of the size of their business or the industry they are in.

1. Determine the ‘why?’
Is it to improve the efficiency, cut down operational expenses, support future growth and expansion…or to streamline your processes? 

Ask the question why you require a new ERP system for your company and list down everything.  Answering this question will help you get a clear idea of what are the problems you are trying to solve with the new ERP system. With this, you’ll have clear selection criteria ensuring you meet all the needs of your business with the ERP solution. 

Here it’s important that you list out the gaps and challenges you are trying to overcome with your new ERP system. 

2. Select a team
Selecting a team for your ERP system selection process should be done wisely as better the team better your end decision is going to be. 

The team should include people from different organization levels and different departments. An optimal team should include at least one employee from each department. If that does not possible, make sure to include at least one member from human resources, IT, finance and procurement, as well as any other important department. 

Be sure to choose the team members based on their level of competencies, ability to express their thoughts and excellence in communication. 

Though it might seem like choosing employees from higher organization level and management for the team is the obvious best option, this might backfire as they are highly likely to get busy with other tasks reducing their focus on the ERP selection process. Another reason for choosing your team based on the designation is not always a good idea is that they might lack the knowledge in day to day operational challenges employees face. However, leadership should be assigned to a person who already in a leadership position. 

3. Evaluate and Plan
In this step start by asking what you require in your ERP system? Give your team for about 48 – 72 hours to brainstorm ideas. The goal here is to identify the specific requirements each department needs in an ERP software to overcome their current and future issues. Once you gathered all the ideas, it’s important to separate needs from wants as all the ‘love-to-have s’ will come at a cost. So, filtering the most required requirements based on priority and representation of each department’s need is essential to get a cost-effective ERP solution.

When you are making your final list make sure to include your network and hardware requirements depending on your company needs. Assign your budget and timeline and plan deadlines for each of the future steps. 

4. Create your vendor scorecard
Now you have a clear idea of the requirement you need in your ERP system which will help you streamline your ERP hunt, keeping you on track all the time. 

Now, put together your vendor scorecard based on your business evaluation. This should include all must have features of your ideal ERP system, price and platform…etc. If you need help with your ERP training, be sure to add it to the list as well. Apart from that below are a few features you should add to your list to compare vendors

  • Ease of Implementation
  • Ease of use
  • Level of technical support and assistance
  • Scalability
  • Compatibility with existing hardware 
  • Vendor’s reputation
  • Upgrades and updates
  • Security

Having this list will help you score your vendors; so, finding the right one later will be easy for you as you have your vendor scorecards to refer back to any time.

5. Consider your options
Now you can hit the market to find your ideal vendors. Look for vendors that have experience in your particular industry. Here you can eliminate vendors who are way over your budget to narrow down your options. 

Make sure the vendor is someone who you can be a long-term partner with and understands your core objectives, values, and business mission. Prepare a list of potential vendors that might be your ERP partner in the future before you go to the next step.

6. Analyze vendors 
Having the shortest list possible with the best options will make your vendor evaluation process way easier. Pay closer attention to the reputation of the vendors to identify vendors who have a good reputation. 

Look at their reviews from the previous customer. Investigate current users to find out real details and feedback about the system; such as its user-friendliness, any bugs or glitches, vendor’s technical support...etc.

Consider the years of experience of the vendor and their organizational stability, apart from fees and costs such as software pricing, hardware pricing, implementation fees, maintenance fees…etc.

7. Evaluate your vendors
Now you can take out your scorecards and score your vendor list. At this stage make sure to pick up the phone and ask all the questions you have. Make sure to ask questions like

  • Do you design, develop and sell your own ERP systems or are you a reseller?
  • What applications do you cover?
  • What type of hosting options do you offer?
  • What technology platforms, such as databases and operating systems, do your applications run on?
  • Does your company also take care of the implementation process or do you outsource it to a third party?
  • How long does ERP implementation take?
  • How is your user training be like?
  • What’s involves in the software customization process?
  • How’s your technical support like?
  • How do you deal with regulatory changes? 

When you are scoring your vendors make sure to consider the software’s flexibility, scalability, mobility, and extensibility too.

8. Contact and try demos 
Contact your best potential ERP software partners and request a proposal and quotation. Make sure to let them know your top business requirements, expectations and long-term goals and your business process. The quotation you will receive should include the vendor’s financial conditions, including initial licensing costs, implementation costs, annual maintenance costs and their payment terms.

Then, you can select the vendors you feel like the best based on fees, terms and the proposal to schedule a demo. Give the vendor time to prepare for the demo. During the demo, be sure to ask your questions for clarifications while examining all the features. 

After the demo, ask for the feedback from each member of the selection team and discuss how the system meets each department’s needs as well as it’s user-friendliness.

Always keep in mind that the vendors who are difficult to deal with within the selection stage won’t be magically easy to work with during the installation process.

9. Determine the ROI
ROI is critical and very important. Review all the advantages and your scorecards, demonstrations, questions answered…etc. and determine which system gives you the best ROI.

10. Select your ERP system
By now you must clearly see the front-runner of your list. Thus all lest is to contact your vendors to learn how soon you can start!