Unless your business is stupid simple, it’s highly likely that you need, and probably already have, some type of software system to help you manage your day to day operations. Now, you, or someone in your organization, has determined that whatever is in place isn’t good enough. Before you go charging into frantic web searches on available solutions that will provide you with more information (or mis-information) than you can possibly digest, you should map out exactly why you need an Enterprise Resource Planning (ERP) solution in the first place.
I’m not just talking about the high-level generic reasons that generally apply to most companies. Automating processes, minimizing redundancy, streamlining efficiencies and collecting actionable information are all wonderful buzzwords and probably relevant, but most companies have some specific or unique business challenges that they are trying to solve. To aid you in determining why you need an ERP solution, it would make sense to canvass the functional areas of your business and compile a specific list of issues that you are trying to solve. Then, prioritize your list and assess, to the best of your ability, how a properly implemented ERP system might mitigate or eliminate those issues. Additionally, and as part of prioritization, try to quantify the value to your company of resolving the various issues. A beneficial side effect to involving the functional area stakeholders in the assessment is that they will be more likely to embrace the necessary changes.
Once you’ve completed the above exercise, you may find out you really do need a comprehensive ERP solution, or you might be okay with a point solution or just a change in business processes. Since this is an ERP blog, let’s assume you have an extensive list of issues that can be positively affected by implementing a complete ERP system. Time to start scouring the web for possible suspects, right? Nope. Now you should spend some time determining what resources your company will be able to leverage throughout the process.
Contrary to what some software websites may want you to believe, implementing a system that touches and interacts with all the functional areas of your business, and addresses the challenges you are facing, is not an easy thing to accomplish. There are significant amounts of money, time and resources involved, which are very frequently underestimated and can cause an ERP implementation to faulter, run over budget, or even fail, regardless of how well the software meets the need. If you can’t leverage the necessary resources internally, make sure your partner can provide the resources you need.
Between establishing need, quantifying value and determining resource availability, you should now be able to establish a realistic budget ballpark. A budget is important because there are many ERP and point solution providers that offer various types of software in all kinds of specialization and price ranges. A budget, even if it is just a ballpark, will help you narrow down the vast field of choices quickly. Keep in mind that the capabilities of the software must be in line with your needs and priorities, and, generally, the less the software costs, the less it is going to be able to do for you. Also, the lower the cost to implement, the more likely it is for your company to have to leverage greater internal resources and continue to use support systems external to the core ERP software.
Finally, how you want to deploy can also help you narrow down your choices, as not all providers can support all the deployment options of SaaS, on-premise or hosted. The deployment topic is broad and very dependent on your company’s capabilities and preferences, but you may find this article helpful.
Hope the above helps in determining whether you need an ERP and setting the groundwork on how to search for one. In my next blog, I will be discussing how to narrow down some of the choices and things to look out for when searching for an ERP solution.