Five Questions to Ask When Determining How to Select an ERP Software
There are so many benefits that ERP (Enterprise Resource Planning) software can provide; however, different ERP software solutions specialize in different functionalities and many other variables to take into account, such as company size, when it comes to deciding which is the best for your organization. Implementing an ERP system is an investment of time and money, so doing research up front is critical and can save money and frustration down the line. The first place to start is by asking some important questions internally. This blog outlines 5 of those questions, which will help to fulfill your needs and accomplish your goals.
Question #1: What are our issues/challenges?
Before trying to find a solution, you first need to know what your issues are. The better you understand your company’s current issues or challenges, the more likely you are to find the best solution possible. Here are several questions to help you begin to identify your company’s current issues:
- What are our current business challenges? (Example: inventory management)
- What parts of our current system need to be changed or improved? Why?
- How urgent are the problems in the current system that need to be changed or improved? What are our priorities?
Question #2: What is the scope of our project?
After discovering and prioritizing your issues, you have now determined that an ERP software solution is the right course of action. Now it’s time to scope the project in terms of budget control and timing. Here are some questions to help you with these parameters:
- What functionalities do we need from our ERP software?
- How do they rank by importance?
- What do we have budgeted for the project?
- Are there any time constraints? If so, what?
- Do we know of any customizations that will be needed? What are they and what are the reasons for them?
Question #3: What are our expectations?
Setting extremely high expectations will most likely disappoint you in any endeavor—and ERP software selection is no exception. However, setting lower expectations could keep a project from reaching its true potential. Therefore, the goal is to set reasonable expectations with reachable goals within identified constraints. Here are some questions to ask:
- How will we define a successful ERP software implementation—for example, in terms of process improvement, increased productivity, decreased cost, etc.? There should be measurable goals.
- What are our expectations in terms of company growth, expansion, or other success metrics after implementation?
Question #4: What is our change management plan?
According to a report from McKinsey, 70% of ERP projects fail because of change management. Nobody likes change; however, there are two ways to make changes acceptable: rewards and compliance. Typically, people are more willing to change if the new way of doing things benefits them. Communicating the benefits and setting up company policy helps make change effective. Here are some questions to think about regarding change management:
- Do we have support from the C-level executives?
- What level of training will employees need after the implementation? Is it included in the budget and timeline?
- What type of change “style” are we planning to use? Big Bang (change to the new system in a day)? Phase (change by phases)? Pilot (change one part of company to test the new system)?
- How many and which stakeholders will be involved in the change, and are they in the communication loop regarding the plan?
Question #5: How do we get started?
After you have answered questions about your issues, goals, scope, and change management, it’s time to find the right ERP software to help you achieve your goals. Below is a list of questions to help you get started on finding the solution that will be the right fit for your company:
- How many users will be using the software?
- What ERP software do other companies in our industry use and why?
- What ERP software do our vendors use or recommend?
- Do we prefer Best-of-Breed or Best-of-Suite?
- How involved do we want to be on the IT side? Would a cloud or SaaS solution be better for our needs?
After thoroughly answering these five questions, you will have a much clearer idea of which ERP solution would benefit your organization.
To find out more about choosing the right ERP software for your business, read our article, Choosing an ERP: What’s right for your business? For guidance in establishing a budget for your ERP project, check out our resource, How much does Dynamics NAV Really Cost?
If you’re considering a new ERP solution, ArcherPoint has expertise not only in ERP, but in business analysis. We can help you take a look at your issues and challenges and suggest a solution that fits within your budget and other criteria. Contact us today!