Choose the Right ERP System

The time is now, your business needs to make a big decision to choose the right ERP system. Startups to mature corporations need ERP systems to function smoothly. In fact, the decision to choose the right ERP system from the start pays dividends. The market for ERP systems is scattered, and there are many big players in the industry. The incumbents, such as, SAP, have a stronghold in the industry due to switching, implementation, and user training costs. Also, implementation time and budget constraints are a major factor in your ERP decision. Furthermore, complex contracts, user agreements, and technical system work add to the list of reasons to avoid or delay choosing the right ERP. Don’t let this stop you.

DJR Jeeves Consulting will help you choose the right ERP system. Here is a guide on the 3 most important factors for your ERP decision cost, customization, and customer service.  But First, I will discuss what an ERP should do and list the vendors in the industry.

What is ERP?

An ERP (Enterprise Resource Planning) system is a one stop shop software for your entire business. As a result, ERP’s are used across all industries and sectors. There are almost too many ERP systems to choose from. The ERP system that you choose will be the source system for almost all of your departments including finance & accounting, , sales & marketing, and supply chain & manufacturing, and human resources.

With that being said, get all of your stakeholders together in one room, or many rooms on one VTC and vet through all of your options. While I was performing research for this article I found a great resource. There’s a catch though. It will cost you an arm, a leg, and $3,480.00 for a 1 user pdf.  If you’re a hardcore CFO, this article will serve you well. If you need help choosing the right ERP you can always contact me.

ERP Vendors

Quick Considerations

  1. Keep in mind the current size of your organization and your expected growth horizon over 5, 10, 20 years, and beyond.
  2. There are limited talent pools of skilled developers and end users for each ERP software.
  3. Don’t upgrade just to upgrade. You need valid reasons with financial support and business justifications. Doing nothing is an option.

ERP System Cost

A wise person once told me to look beyond the obvious costs. Typically, there is a conflicting dichotomy between the the ERP implementation team and the organization. The implementation team gets paid by the hour, so they slack. Meanwhile, the organization is shelling out cash with no return on investment and a nonfunctioning software. Luckily, NetSuite offers a flat rate implementation. Here are some costs that will impact your decision. Create a financial model to compare the costs of each ERP system.

  • Discontinuation- Sunset your old ERP if you have one
  • Implementation- Data migrations, infrastructure, and installs
  • User Licenses or Fees- Cost per User, Annual Fee, or Usage Fee
  • Service Fees- Fix a bug or future functionality enhancements
  • Training- New users need to be confident with the software

Lastly, don’t forget the opportunity cost. Your time and money can be used on a different strategic investment with a higher ROI.

ERP System Software Customization

Every company operates differently. Therefore, every ERP will provide different functionality. Dive deep into your business and examine status quo versus future state. Determine which functionality is critical to your business. You can categorize functionality into 3 categories not needed, must haves, and would be nice.  Use these categories on an X axis with the ERP system on the Y for ease of comparison.

Integration with existing legacy systems is always an interesting topic that arises during ERP discussions. Remember, very specific customizations may result in your company’s inability to take part in future upgrades. Furthermore, as your company grows, the legacy system will need to get replaced at some point. Note that fewer system integrations will result in a more seamless ERP implementation.

Ideal Customer Support

One last consideration to take in account before you call it deal is customer service. You must form a contractual agreement on the expected service level that your ERP provider will meet. Who are you going to call when the inevitable problems arise? Do you have to pay for customer service? Top notch ERP systems have exceptional customer service. You want to have an easy to reach, knowledgeable, and trustworthy account manager.

While this is not a comprehensive guide, I hope that this guide provides you with a solid foundation to start your ERP solution search.  Take time, be cautious, and make sure that your investment will have a positive return! Above all, choose the right ERP system.

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DJR Jeeves Consulting (908) 472-4418

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