By Martin Craze
Choosing to invest in enterprise resource planning (ERP) software is no small decision, often requiring an outlay of capital for a new system before you can be sure that it will prove its worth. Business process management software allows your organisation to use integrated applications to manage the business and automate many functions related to technology, services and HR.
But so often companies move quickly and without thought, rushing into a choice based on the wrong features: we have brought together some common pitfalls to help you avoid those mistakes and guide you along the way:
Analyse your specification requirements
The first step is to have a clear vision with regards to what you’re looking to achieve from the ERP software. Neither investing the preparatory time, nor defining and documenting your requirements, may mean that you choose a system that works perfectly for somebody else’s company, but is woefully inappropriate for your business.
Most of the ERP systems on your list will usually cover 80% to 90% of what you need as standard. Which means there’s no value in searching for those requirements – your time is better spent in looking for the differentiator requirements. Focus on features that give you an advantage, are particular to your sector, or that your current way of working struggles to manage.
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Have realistic deadlines and sufficient resources
It’s all too easy to under-estimate the time taken to completion of a new system integration and the resources needed for EPR software selection. Choosing an ERP vendor should never be a swift process. Give yourself a plenty of time to analyse multiple competitors and test drive both the software and utilise the support team. Don’t rush into an implementation of this size.
As much as time is a key consideration so is energy, does your team have the motivation necessary to pull off an ERP implementation successfully? If the answer is no, then you might want to reconsider how you go about implementing it. Initiating the adoption of a new software package, such as ERP, requires complete commitment and enthusiasm for the project. Without the required energy, your implementation is likely to be unsuccessful. An often overlooked aspect is allocating enough resources to be able to handle the ERP selection process, including preparing a selection committee and implementation team, which will help keep the process as streamlined as possible. Determining resources can also include cost, specifically the number of employees that will be focusing less on work production and output and more on the software selection.
Invest in training and change maintenance
Being unable to allocate proper training time is one of the most common reasons that ERP projects fail after implementation: this lack of training can lead to employees resenting the new system because they don’t understand it or know how to operate it. Making sure employees have the opportunity to become comfortable with the new system before it goes live will ensure your chances of ERP success.
Decommission legacy applications
If your business doesn’t actively arrange to decommission applications during the implementation of your new software, the result is an ERP with legacy applications hanging off it. The end result is a duplicate piece of software, which the company is paying maintenance and support for, when the objective of acquiring an ERP system was to streamline workflow and reduce costs.
Have an active load testing environment
You won’t be able to see the true results of your changes based on a couple of test users, and basing a software choice on the demonstration model the vendor showed you during that meeting won’t allow your users any idea of how the software will hold up to heavy use in a real world environment. If this step isn’t covered it can mean expensive down time for the software and your employees whilst services are upgraded or fixed to accommodate the work load you need it to handle.
Conduct thorough vendor browsing
It can be tempting to select the first vendor that comes along, but you need to look beyond the initial sales pitch and decide on an ERP provider who doesn’t operate a one size fits all policy. Vendors aren’t always able to say, in complete terms, exactly what they provide on their website, so it’s important to be inquisitive beyond simple feature lists and interrogate the provider.
Take the time to know and understand the less obvious details of each ERP’s product and support services. Some companies bypass comparing various vendors because they believe they’ve found the one that covers the bases of what they need but try not to settle on any ERP software without weighing up all of your options.
Compare long-term benefits against initial costs
ERP software can seem like an expensive use of budget, but in time, the long-term benefits gained from the investment will outweigh this. Understanding the total cost of an ERP software package is essential, but price comparison at too early a stage will miss the added value of the software in streamlining your business processes. Software from one vendor can cost slightly more than another’s for a reason, even if that reason isn’t always initially obvious. Whether it’s better quality customer support, more in-depth features or thorough reporting. Consider factors beyond cost, such as overall value for money, when looking at an ERP software implementation.
The software selection process is time-consuming but should prove productive. If you’re falling into one of the traps above, it’s time to take a step back, consider your options, recognise your requirements and get back on track with a system you can trust. The future of your business depends on a quality ERP vendor, so take the process seriously, avoid common pitfalls and you’ll find success.
Martin Craze is founder and managing director of Applied Business, a business management and accounting ERP system consultancy.