10 Tips to Save Time & Money Searching for ERP Software
- Define Your Requirements in Detail
- Establish Responsibility and Authority
- Include All Appropriate Stakeholders in the Process
- Don’t Shop on Price Alone
- Look for Modern Technology and Open Architecture
- Get the Right Fit
- Find a Software Partner, Not a Solution
- Do Not Make Assumptions
- Consider Data Conversion
- Check References
1. Define Your Requirements in Detail
This essential first step is usually neglected. Before you even begin to look for and evaluate software, you should document in significant detail what you want out of the software. Make sure you do your homework before looking for a new system and categorize items as “must-have”, “important”, and “wish-list”. Ideally, you should incorporate this process as part of a strategic plan that addresses overall organizational goals – for today and in the future.
2. Establish Responsibility and Authority
When you decide to start searching for software, you will want to task one person with the responsibility for managing the selection process and speaking with vendors. This Project Manager must be given the authority to work with other employees in defining needs and evaluating proposed solutions. However, you don’t want to wait too long to involve the final decision-makers in the search. By only presenting information to decision-makers at the very end of the sales process, you risk wasting time repeating steps to get everyone up-to-speed.
3. Include All Appropriate Stakeholders in the Process
When defining the requirements of a new system, be sure to get detailed input from all areas of the business, including key employees. For example, in a distribution company, the new solution has no chance of success if it does not address the critical needs of the warehouse staff – no matter how good the general ledger or accounts payable features. Not only will this help in making the right choice, but getting buy-in from the actual end-users will also greatly smooth the implementation process. However, to avoid personal objections stalling the process, it’s important that the Project Manager is empowered to say “no” where appropriate.
4. Don’t Shop on Price Alone
It’s important to get a “good deal”, and to minimize the amount of money you spend on an appropriate solution. But spending any amount on a poor solution is far worse than over-spending on a good solution. If you’re comparing ERP software vendors across the same tier, you will find that the license fees are very similar. Where there can sometimes be a significant difference in pricing is when it comes to estimates of service costs, such as implementation and training.
Vendors frequently like to low-ball the service costs, or some vendors will provide a fixed quote for the implementation. This is a tactic used to keep down the overall cost on the proposal but charging a fixed price may lead to gaps in the implementation process, which will ultimately reduce the success of a new system. And keep in mind that trying to manually perform implementation tasks without the vendor’s help (such as data migration), may save you money initially, but it means you will have to assign an employee away from their regular responsibilities and can cause headaches if you run into issues.
5. Look for Modern Technology and Open Architecture
It’s a new system, so make sure it uses modern technology. Avoid systems that use old development languages such as COBOL, or don’t provide a true Windows interface. They should use a standard, widely used and open, database – such as Microsoft SQL-Server – to store information, not some proprietary file structure. You will also want to work with a vendor who is constantly updating and improving their system to keep up with the changing needs of your industry – such as wholesale and distribution.
Be sure that you will be able to get at your key business data using industry-standard tools (like Excel). No matter how good a system is at processing transactions and storing information, a basic, non-customized ‘out-of-the-box’ solution is not going to give you all the reports and management information that you’ll need as your business grows.
6. Get the Right Fit
You may be in an industry where an inexpensive off-the-shelf package will meet most of your needs. If that solution addresses both current – and future – requirements, then that may be your right fit. If not, then you will need to consider an industry-specific solution – for example, one designed for pharmaceutical distribution companies – which may cost more but does meet all your requirements. Sometimes, you can also achieve this fit with an off-the-shelf package configured to meet your individual needs with the addition of specific components. The final option for getting the right fit is a solution that you can customize.
If you determine that an off-the-shelf solution doesn’t fit look for a solution that facilitates either the easy addition of appropriate components or specific customization – rather than building a solution from the ground up. Make sure the system is upgradeable with all custom capabilities. Look for a vendor with a large user base and a successful track record of upgrading customized installations, and find out the upgrade costs – including your customized portion – upfront.
7. Find a Software Partner, Not a Solution
Successful salespeople are likeable and personable, but you want to make sure that you’re more than just a number on their list. You will want to find an ERP software vendor that can become your trusted technology partner – so that you can continue to work closely together long after the initial sale.
8. Do Not Make Assumptions
If a feature is important, and it’s part of a proposed software package, it should be easy to see in action as part of a demonstration. If a salesperson tells you that your requirement is a standard feature but they aren’t able to provide a demo because the “demo data is not set up to show this”, ask them to return at a later date with appropriate data. Software demos are used to verify that the system can handle your needs – so make sure you spend the time with vendors before a demo, fully discussing your requirements.
9. Consider Data Conversion
Even though you’re getting a new or upgraded system you’ll still need to access data originally stored and processed with your previous software. The old data must be incorporated correctly into the new software. This will be of varying degrees of importance to you. For example, you may need to access sales account information, where thousands of transactions provide your clients’ previous buying patterns. Make sure you find out from each software vendor if they can migrate your old data – and as a bonus, look for a vendor that can help you “clean-up” any bad data as part of this process.
10. Check References
Checking references is the best way to get a true feel for how a system works and how a vendor treats its customers. Each software vendor should be able to provide you with multiple references in similar industries to do an accurate comparison. Ideally, your software provider should be able to understand and appreciate your overall business requirements.
The 10 tips detailed above will help you make a successful strategic decision when searching for ERP software by helping to provide a structured and planned approach. It will simplify the selection process, shorten your decision cycle, and save you time and money.