When selecting or replacing an ERP system you need to plan in detail or you could struggle with endless change requests and spiraling support costs.
A properly planned ERP project mitigates risks and dramatically increases the chances of success.
Choosing the right ERP requires a full analysis of business requirements and processes. You will need a team responsible for gathering requirements and preparing tender documentation.
For process mapping and requirements gathering it is important to have a systematic approach with experienced resources that are fully versed with the company’s current and future directions.
Five keys steps:
- Establish exactly why you need a new ERP system
- Define clear goals and research best processes using process frameworks
- Select the software and integrator, utilizing ERP comparison sites like erpfocus.com
- Implement and go live, monitoring outcomes against goals
- Factor in training, ongoing education, and improvement
Why do you need a new ERP? – There are often multiple reasons; perhaps the current system is no longer supported and it is now becoming a challenge to maintain a competitive edge. An older ERP is difficult and expensive to manage and is heavily reliant on IT to keep transactions flowing. In addition, license costs will increase as the system become trapped on older versions making it important to assess the costs of maintenance versus a new system. Finally, an old ERP may struggle to meet evolving compliance needs or it simply won’t integrate with the latest software systems.
High-level assessment
- Map out processes that your new ERP needs to support. Use a process framework such as APQC to compare with industry best practices.
- Identify key areas where your current ERP is falling short, e.g. CRM or Supply Planning
- Forecast your existing growth and the functionality you’ll need to support this.
- Prioritize functionality and ensure that these functions will be future proof.
Should I choose cloud or on-premise ERP? – There has been a major shift in interest towards the cloud model from those selecting an on-premise ERP. Whilst the cloud is new and exciting, especially in the ERP space, don’t overfocus on it. If it meets your requirements, great. If not, there are plenty of excellent on-premise ERPs that will.
Cloud offers lower upfront costs since computing resources are typically leased monthly, but as the software is off-premise it can be more challenging/costly to make changes, so you need to be sure that your processes are optimized.
Selecting your Vendor
Shortlist potential solution integrators – This is one of the biggest steps during the ERP selection process. There are numerous ERP integrators so making a shortlist should be easy, especially as you will be seeking references from comparable business types. ERP software comparison engines are available that will help you produce a shortlist of potential systems from the mainstream ERP suppliers. They’re also helpful for researching what your competitors are using!
Demonstration of understanding – Once decided on your final three integrators, invite them to demonstrate their products. Use a script to control the direction of the demo. Invite representatives from all key business streams since they have to assess the usability of the solution. Mark each area against a scoring metric to ensure that any gaps are weighted accordingly.
Project planning – Be realistic in your project planning to avoid milestones that are simply not achievable. For example, data conversion often takes longer than expected due to legacy data complexities. Go-Live and ongoing training – Basic user training is usually provided just prior to user acceptance testing (UAT). In addition to the solution integrators’ personnel, consider hiring specialist software consultants to coach your internal teams, and to provide training throughout all of the project phases rather than waiting for UAT. Once your new ERP is live, do not make the mistake of thinking you are finished, it is essential that training and operational feedback is ongoing until stability and ROI goals are met.
