Why is choosing an ERP system so tricky?

by Guest Author on July 14, 2021

in Guest Posts

The consensus is that choosing ERP software is a daunting task. So much so that, when compared to the numerous other selections that businesses make for progress and growth, the complexity of ERP choices tends to surge to the top.

Many articles supporting the difficulties involved in an ERP search can be found on the Internet, but comprehending where the trouble arises from is not as common. We can better navigate and neutralize elements that can impair decision-making capacity by breaking down why ERP selection is such a difficult undertaking.

Here are the reasons why choosing ERP software is so difficult:

1. There are numerous possibilities to choose from.

There are hundreds of ERP software systems to pick from, but not all of them will be appropriate for your business. Eliminating candidates based on vertical industry, company size, budget, and process complexity can rapidly yield a reasonable shortlist.

Do you require assistance? Independent firms that specialize in ERP software selection can assist you in finding software that is right for your business and processes. Keep an eye out for companies that are truly independent and do not sell software; for example, Technology Evaluation Center and 180 Systems are both independent evaluators.

2. There are numerous ERP implementation partners from which to choose

There might be any number of partners qualified to implement ERP software for any given ERP software. Opt for ERP vendor authorized partnerships who have industry knowledge, are local to your operations, have a positive industry reputation, and are laser-focused.

Resist ERP implementation partners who offer services for a variety of vertical industries or multiple software products. Genuine experts are partners who focus on a certain piece of software or specialized industry. These specialized consulting groups know everything there is to know about the applications and industries they serve, providing customers with actual added value through unrivalled knowledge.

Some argue that choosing a capable ERP implementation partner is more important than the software itself. We agree that good software implemented poorly can lead to project failure; nevertheless, average software executed by a competent team can nevertheless result in project success. As an extra recommendation, look for a partner with a corporate culture that is comparable to your own. To improve collaboration and communication, a close working connection necessitates a good cultural match.

Do you require assistance? Consult the software vendor for recommendations on the appropriate partner for your requirements. They will have direct knowledge of the industries they most frequently serve and will be familiar with their strengths and shortcomings.

3. Both in terms of time and money, this is a significant investment

The expense of an ERP system puts a strain on decision-making. It is one of the most expensive expenditures a corporation will make in terms of both resource effort and financial worth. Our recommendation is to try your best to predict return in terms of ROI and to build a realistic budget that is both economical and gives the software functionality you require.

A budget overrun is preferable than having a clear grasp of your investment. Don’t know how much to set aside? A trustworthy partner will typically cost 1.5 to 3 times the financial plan, with significant variance depending on the implementation’s severity.

Keep an eye out for traps–

Many vendors may under quote in order to keep prices down, leaving ERP Project Managers hanging with executives when the budget is severely surpassed.

Pay only for what you require – don’t be duped into purchasing a large programme with correspondingly large implementation costs owing to greater complexity. This includes the ‘package’ deal, in which all capability is included for a single fee – unless you plan to use more than 75% of the included capabilities, you are very certainly overpaying for what you don’t require.

Unreasonably inexpensive software services quotations may not cover all of the ERP implementation’s requirements. Some partners, for example, leave training out of quotations, implying that it is an optional additional. With user adoption being such an important aspect of the project’s success, training is a must.

4. There are many critics and many different points of view.

The ERP you choose will be used throughout your company, giving everyone a stake – and an opinion – in the decision. Many will offer suggestions, have knowledge with various technologies, have a preference based on previous work experience – and some may even prioritize their department’s needs over the company’s.

This is not meant to discourage participation; on the contrary, the scope of an ERP project necessitates participation from a large number of people in order to make the best decision possible. The goal is to emphasise the ERP Project Manager’s role in screening and sorting through this communications to extract useful information that will aid in the selection of an ERP that will function well for everyone.

Get more – don’t settle for simplistic opinions when receiving feedback on potential ERP candidates; instead, request constructive input for important procedures, including quantified improvements and process efficiency. Make a list of these points to discuss with vendors and partners.

5. It has an impact on the entire company.

An ERP implementation will have an influence on the entire organization; everyone and every process will be affected throughout the installation. ERP Project Managers in the selection process are significantly influenced by their awareness of the upcoming upheaval. Sharing project ideas and receiving regular ERP updates can help reduce the impact on corporate teams.

Maintain control — when choosing an ERP implementation partner, it’s important to talk about the project methodology. A good ERP installation approach will keep you in control, reduce risk, and keep your timeframes, scope, and budget on track. Ultimately, the smaller the project, the more easily the organization’s influence may be controlled.

6. Consists of a diverse range of functions, procedures, and analytics.

The most difficult task on our list is determining whether an ERP can pass the test of providing all of a company’s functions, procedures, and analytics. There are two perspectives on this;

The first step is to produce a Request for Quotation (RFQ) that includes a detailed list of all criteria to confirm that the chosen ERP is capable of handling all expected tasks. Is it realistic? Certainly not. This is the point at when the paralysis sets in. This would require decades to compile such a comprehensive list, and with so much to cover (every department, every process), would anyone consider it complete? What about potential transformation?

We believe the second method is more practical. Identify the business’s unique processes, which are usually those that provide it a competitive advantage. In your RFQ, include those particular processes as well as any other unusual requirements. Later in the selection process, details on how these procedures will be handled, any adaptations that are required, and the expected costs and timelines associated with any out-of-the-box capabilities should be discussed with possible vendors.

The argument is that any ERP software can do basic accounting, purchasing, sales, and inventory activities, so why waste time checking that it can invoice, cut a sales order or purchase order, or manage a simple inventory pick process? Focus on the larger picture – for example, in the case of inventory and warehouse, is the software compatible with Voice Warehouse technology, which can help you save money and gain a competitive advantage?

Software showcases and tests of ideas can also expose the software’s functional competence. Keep in mind that sales demos are frequently scripted and can exaggerate a product’s suitability for your needs. When in doubt, ask the vendor for references in your field that you may call to evaluate the software’s compatibility, get feedback on the services provider, and learn from their mistakes.

Prepare for the future – An ERP system can last for up to ten years in a business. Check that the programme has the capability needed for immediate process improvements, as well as a fun software roadmap with realistic functionality enhancements that support current industry and software trends long into the future.

Validating prospective software development protects your investment and justifies the yearly maintenance costs, which are usually 20% of the initial program cost.

By comprehending the challenges, creating confidence to navigate through the hurdles and risks, and overall expediting the selection process to move into the next phase of the project, ERP implementation, breaking down the complexity of ERP selection can assist smooth the decision-making process. This list contains a few pointers, but because each ERP and organization is different, the difficulties we’ve listed may only be a percentage of what you’re dealing with.  It’s critical to understand what you’re up against and use that knowledge to guide you through the ERP decision process.

Guest article written by: I’m Shalini Reddy, a freelance content writer from the city of Pearl, Hyderabad. After completing my Bachelor’s in Technology in Biotechnology, I embarked on a journey to channelize my passion for writing! Being a Biotech engineer gave me the right base to write for leading healthcare companies and articulate ideas for medical blogs and articles. Starting off as a medical writer, to a freelance technical IT writer at TechIntegra ERP and Brontobyte Technologies, the journey has been incredible in understanding various writing niches. In short, the 4 years of my writing journey have helped me explore various nuances of writing from various fields.

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