Choosing the best ERP system
What is an ERP?
Enterprise Resource Planning (ERP) is a management software that aims to organise business activities such as accounting and finance, human resources (HR), marketing and sales, supply chain, and customer relationship management (CRM).
The most common features are as follows:
● Accounting and Finance: Tax management, forecasting, and billing
● Human Resources: Employee data, payroll, and compensation management
● Marketing and Sales: Sales forecasting, workflow management, and lead management
● Supply Chain: Production planning, procurement, and order tracking
● Customer Relationship Management: Customer data and contact management
How do you choose the best ERP software?
When selecting an ERP software, it is of the utmost importance to consider various factors to ensure that the ERP aligns with the business processes and objectives. With an overwhelming amount of ERPs in the market, it is crucial to weigh each option carefully. This section will outline the key factors and considerations to guide you in choosing the most suitable ERP system.
1. Business Requirement
● Evaluating the business processes to determine the specific needs that the ERP should address.
2. Integration Capabilities
● Users may incorporate third party applications therefore it is essential for an ERP system to have robust integration capabilities to maintain an efficient workflow and ensure the accuracy of data across all platforms.
● Managing multiple systems could lead to errors, emphasising the importance of selecting a system with integration capabilities that is compatible with the current software and tools used by the company.
3. Scalability and Adaptability
● The amount of data, transactions, and client information increases as the business grows. Consequently, the scalability and adaptability of the ERP software become vital to properly manage the significant increase in demand.
● Growth brings about change, highlighting the significance of adaptability. As businesses evolve, they may modify their operations or adopt new strategies to stay competitive or keep up with industry trends.
4. Customisation and functionality
● Businesses have different needs so understanding the level of customisation available that would allow the ERP system to properly accommodate the needs of the business is important.
● Ensure that the ERP system includes the core functionalities or features tailored to your industry if required.
5. User Interface (UI) Design
● The employees in the business most likely come from a diverse educational background hence they will not all be qualified to appropriately utilise the system without technical expertise, underlining the significance of a user-friendly and intuitive UI design.
6. Vendor Reputation and Support
● Awareness of the vendor’s reputation and customers’ reviews can provide valuable insight into the quality of the ERP system and its suitability for your business.
● The availability of reliable support channels is crucial for maintaining operational efficiency and resolving technical difficulties effectively.
7. Cost
● In addition to the upfront cost, an ERP system has long-term costs including licences, training, maintenance, and upgrades. Consider the return on investment (ROI) of implementing the ERP system.
8. Implementation Process
● Understanding the implementation process and the support available is essential to ensure it aligns with your business goals.
9. Security
● Consider the security measures to ensure the protection of your data.
● Ensure that the ERP system meets relevant industry standards and regulations, including legal requirements and best industry practices.
10. Data Migration
● Verify that the data integrity would not be compromised throughout and after the migration process. In addition, assess the support available for transitioning data from the current system to the new ERP system.
11. Performance and Reliability
● Ensure that it can handle the workload and meet performance demands. Additionally, confirm that the system has a demonstrated history of reliability and minimal downtime.
12. On-cloud vs On-premises
● Consider whether a cloud-based or on-premises ERP system would be more suitable for your business. The primary difference lies in the deployment: on premises ERP requires hardware installation, while cloud-based ERP is accessed through a web browser.
13. User Feedback and Case Studies
● Understand user experiences (UX) and satisfaction levels by examining reviews from the current users of the ERP system. Moreover, review case studies to see how the ERP system has been successfully implemented in business similar to yours.
Challenges
● High Integration Cost: Some ERPs offer affordable plans, but their high integration costs are often overlooked by users.
● Use of Third Party Software: If an ERP system does not meet specific business requirements, users might need to integrate third-party software. Over time, the cost of these integrations can exceed the expense of choosing a more comprehensive ERP system that better aligns with the business’s needs.
2. Quality
● Performance Issues: Some users experience performance issues such as slow time response and system outages as the business grows due to increased volumes of data, emphasising the importance of the scalability of an ERP system.
● High Levels of Customisation: The ERP system may require high levels of customisation to meet specific business requirements, which requires skilled personnel and time, resulting in additional costs for the business.
3. Complexity
● Require High Technical Expertise: Some ERPs require high technical expertise to use and maintain.
● Complex User Interface Design: A complex user interface in ERP systems can reduce efficiency and create a steep learning curve, leading to additional costs for the business, such as training expenses.
4. Lack of Transparency
● Request a Demo: Arranging a demo can be time-consuming, and the demonstration may be overly scripted, potentially failing to reflect the true capabilities of the system.
● Request a Quotation: The process can be time-consuming, complicating and prolonging the decision-making process.
Index
1. API Integration
● Application Programming Interface is the process through which applications communicate and share data.
2. Customisation
● Customisation refers to the adjustments a business can make to an ERP system to better meet its specific needs. This includes modifying the software’s source code or adding new modules and features that are not included in the basic version.
3. Lead management
● It is the tracking and management of potential customers through various marketing and sales techniques.
4. Procurement (Cambridge Dictionary, n.d.)
● It is the process of sourcing, purchasing and obtaining goods or services from an external source.
5. Return on investment
● It is a ratio that aims to measure the profitability of an investment.
6. User Experience (Cambridge Dictionary, n.d.)
● User experience refers to the user’s interactions and experience when using a product, system, or service.
7. User Interface Design
● It is the process of creating the visual features and interactivity of a system or software which is an essential part of the user experience.
References
1. Cambridge Dictionary (n.d.). PROCUREMENT | meaning in the Cambridge English Dictionary. In: Cambridge Dictionary. [online] Available at: https://dictionary.cambridge.org/dictionary/english/procurement.
2. Cambridge Dictionary (n.d.). USER EXPERIENCE | meaning in the Cambridge English Dictionary. In: Cambridge Dictionary. [online] Available at: https://dictionary.cambridge.org/dictionary/english/user-experience.