ERP systems can transform a business into becoming more streamlined, but they’re not easy to get right at first. Before looking to more technical decisions, like sap vs oracle, we must first consider some basic criteria.
Business goals
It’s easy to begin thinking of new systems in isolation, but the reality is that they’re only here to serve one purpose: achieve the company’s goals. Your business goals may be divided into categories, like a growth goal, efficiency goal, and a speed to market goal – but they should all be taken into consideration when deciding on a new ERP system.
Functional requirements
There are certain functional requirements within a business that must be satisfied. For example, if your company operates in many different countries around the world, it would then be important for the ERP system’s accounting functionality to support multiple currencies and work with different tax systems. These functional requirements should be clarified and help decide on an ERP system.
Integration
Of course, despite the ERP system covering a lot of bases, it will likely have to integrate with other existing systems. If there are other systems that the ERP cannot replace, then it must be able to integrate effectively with the ERP. Examples include making sure the ERP can read and use data in other systems, and whether or not the ERP has integration tools.
Furthermore, as mentioned in the scalability section, looking into the future is important too. If you are anticipating other systems to change, then will the future systems be able to integrate with the ERP?
Return on Investment
Implementing an ERP costs a significant amount of money and should be considered as an investment. The total costs of ownership should be accounted for, not just the explicit price of the ERP. For example, upgrading servers, ongoing training, and so on. The total cost of ownership can then be used to better understand the return on the investment.
In the past, the underlying technology of such a system was less of a concern, but now there is a vast and varying degree of advanced functionality that is demanded from businesses – meaning that we should only pay for what we need.
Scalability
Future technology must be taken into consideration when deciding on an ERP because changing ERP systems takes a lot of resources. So, we want to be sure that the ERP is going to be integrated and functional in the future, but also if it can scale as the business grows. Thus, it may be that you spend more on an ERP system that uses newer technology because it is more future-proof.
Deciding on the team
It’s also important that you already have in mind who is going to implement the system and manage such a project. Those in support when processes change need to be decided beforehand, and personnel will become the most important factor in how successful the decision on which ERP to opt for.
Research has shown that businesses who have previously experienced an ERP implementation are more likely to prioritize the level of support offered before all other factors. So, the support offered by the ERP developers, and their track record, is critical to the success of the project. Suddenly, a quality consultant becomes extremely important.