One of the questions we get ask most often is; "Which ERP is the best for our business?" and our answer is always; "It depends".
It is a legitimate question and it would be nice if we had a tool where we could input our industry, the product we make and maybe a couple more information and get an answer. Unfortunately, it doesn't exist yet. Selecting an ERP (Enterprise Resource Planning) system or any other enterprise software, like a CRM, requires a deep understanding of the organization's processes, specific needs, it's unique value proposition and what it's strategic objectives are.
ERP systems are an essential part of any modern business. These comprehensive software solutions allow companies to streamline operations, simplify management processes, and make data-driven decisions. However, with the vast array of ERP options available today, it can be challenging to determine which one is the best fit for your business. I'll try and guide you through the process of choosing the right ERP system for your unique business needs.
What is an ERP System?
An ERP system is a software solution that integrates various business processes into a single, unified system. This includes aspects such as finance, human resources, supply chain management, customer relationship management, and more. By having all these processes within a single system (or integrated with it), businesses can improve efficiency, reduce operational costs, and enhance decision-making.
Key Factors to Consider When Choosing an ERP System
When it comes to choosing the best ERP for your business, several key factors should be taken into account:
1. Business Needs: The first step in choosing an ERP system is understanding your business's unique needs. Do you need a system that can handle complex supply chain management, or is customer relationship management your top priority? Do you need a system capable of dealing with multi-entities and multi-currencies? Identifying your needs will help narrow down the options.
2. Scalability: A good ERP system should be able to grow with your business. It should be flexible enough to handle increased workloads as your business expands and evolves.
3. Interoperability: Interoperability enables different systems to communicate, exchange data, and use the information that has been exchanged. In an ERP context, this might mean sharing customer data between sales and customer service modules, or exchanging supply chain information between inventory management and procurement modules. This can also extend to external systems like a Customer Relationship Management (CRM) system, an e-commerce platform, or third-party analytics tools.
4. "Configurability": Every business is a little bit unique, and as such you should look for a system that allows you to "configure" it to suit your business's specific needs. We like to differentiate customisation and configuration. The former often requires development (>$) and the latter can often be done internally..
5. User-Friendly Interface: The ERP system should be easy to use. If it’s too complicated, your employees may resist using it, which could lead to decreased productivity and efficiency.
6. Cost and ROI: ERP systems can be a significant investment. It's essential to consider both the upfront cost and the ongoing maintenance and support costs. In many cases, it is also possible to get an interesting "Return on Investment" and a relatively short payback period. In my opinion, costs are probably a bit less important than benefits.
7. Implementation Partner: The implementation partner plays a key role in any ERP project and selecting the right partner is absolutely key. Experience in your industry, proximity and client references are factors you'll want to consider when making this decision. Remember, you'll have to live with this decision for a long time and while it is possible to switch partner it is something you'll want to avoid.
The process to select the best ERP for your business
Strong from our many years of experience providing IT strategic planning and enterprise software implementations, we have developed a simple, yet effective way to gather requirements, document pain points and opportunities, and present it in an easy to understand and visually engaging way.
Leveraging some enterprise architecture best practices and business process mapping techniques, we are able to capture all of the required elements to build a strong RFP package and eventually a solid business case.
Another factor you need to consider is that in the current market conditions, we need to do things a bit different and get away from the standard “requirement matrix” in order to attract the best possible software vendors / resellers / implementation partner. The truth is that implementation partners hate the traditional excel spreadsheet, listing requirements because it provides them with no context and very little options to elaborate on how their proposed solution will fulfill your requirements and potentially create opportunities. There is a reason why the saying goes; "A picture is worth a thousands word" and not the other way around!
Some of the traps to avoid
Maybe the biggest trap that you can fall into is the famous (or infamous) "As-Is" documentation trap. Common wisdom would suggest that you need to clearly understand where you are in order to decide where to go and how to get there. While there is truth to that, very often companies overdo and over think this.
There is no point in spending weeks or months documenting the "As-Is" processes because the processes will be heavily impacted and most likely change when you implement the new ERP. Chances are that you'll want to adopt many of the "industry best practices" brought forward y the software and implementation partner. The key is to document the processes enough to provide the necessary context to the implementation partner to be able to understand your business. In all cases, the implementation partner will go into the next level of details during their "discovery" phase (once you have signed the contract).
Another trap is the "future state" design or mapping. Depending on the selected solution, the "future state" may be quite a bit different. Wait for until you have selected the software and the implementation partner, design the future state together with them and leverage their experience.
Conclusion
The best ERP for your business will depend on your unique business needs, budget, and long-term growth plans. By considering the above factors and researching the various options available, you can find an ERP system that will help you streamline your operations, provide insightful analytics, and ultimately, drive your business growth
And remember, the goal is not just to find an ERP system, but also the right implementation partner, the one that will support your grow and help you stay ahead of the technological curve. Choose wisely!
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