Top Five Mistakes To Avoid When Choosing Erp Software

Top Five Mistakes to​ Avoid When Choosing ERP Software
1 .​
Not Knowing What you​ Really Need in​ ERP Software
Before diving right into choosing a​ solution,​ take the​ time to​ understand what you​ really need .​
To begin with,​ determine whether you​ need fully integrated ERP software or​ best-of-breed software .​
This will often depend on​ the​ issues you​ are trying to​ solve or​ the​ opportunities you​ are trying to​ capture,​ as​ well as​ the​ size and structure of​ your company .​
For example,​ if​ you’re a​ small to​ mid-sized company with limited budget and limited resources,​ then you’ll probably want to​ consider a​ fully integrated ERP software system .​
This type of​ system will allow you​ to​ streamline your processes and achieve improved productivity at​ a​ lower cost and with fewer resources.
Take into consideration that,​ in​ order to​ efficiently implement and use best-of-breed solutions,​ you​ will need extensive knowledge of​ both the​ business rules and the​ database constructs within each application of​ your business processes .​
This is​ due to​ the​ fact that all of​ your individual systems need to​ run in​ unison in​ order for your data to​ be consistent and accurate throughout your operations .​
If you’re not prepared to​ deal with the​ sometimes overwhelming task of​ creating your own interface between disparate systems,​ then fully integrated ERP software is​ your better choice.
Unless your needs are very narrow,​ expect to​ experience a​ significantly lower total cost of​ ownership (TCO) with fully integrated ERP software in​ comparison to​ best-of-breed solutions .​
Using separate best-of-breed solutions can often drastically increase your overall license and implementation costs,​ not to​ mention reduce overall operating efficiencies .​
With a​ best-of-breed solution,​ you​ may not be protected from version obsolescence,​ which can result in​ additional investment later on​ .​
Additionally,​ support of​ your operations can be hindered as​ you​ manage problems across multiple vendors.
the​ best fit for many small to​ mid-sized companies is​ often fully integrated ERP software .​
However,​ the​ solution needs to​ fit most,​ if​ not all,​ of​ your key business requirements – no small task for a​ single application .​
To overcome this obstacle,​ choose a​ partner with industry specialization who can help to​ ensure that your most critical business requirements are met.
2 .​
Not Recognizing the​ Uniqueness of​ Your Business
Every industry is​ unique .​
Lack of​ industry specialized capabilities within your software is​ a​ common cause of​ failure for an​ ERP software implementation .​
Often horizontal solutions that serve many different industries need to​ be significantly customized in​ order to​ fit your business model and to​ integrate with your other internal systems .​
Take caution that while initial license and maintenance fees can sometimes appear lower,​ these generic solutions can often result in​ increased costs due to​ extensive customization requirements,​ upgrades,​ ongoing maintenance,​ and longer system deployment timeframes; reducing and delaying your overall return on​ investment.
Avoid choosing software that limits your capabilities and your company’s growth .​
Your software should enhance your business,​ not hinder it .​
The software you​ choose should have the​ specialized capabilities necessary to​ address all of​ the​ business requirements of​ your company and your industry,​ not just some of​ them .​
For an​ industry tailored solution,​ find a​ provider who offers specialized software for your industry and therefore will be able to​ provide the​ most beneficial solution for your business needs .​
Your solution should be specifically tailored for your business and industry and your provider should know your industry as​ well as​ you​ do; enabling them to​ make recommendations .​
By choosing an​ ERP software solution that is​ specialized for your industry,​ you​ will be able to​ get a​ specific targeted solution to​ meet your unique business needs .​
The right solution will deliver improved efficiencies,​ reduced costs,​ enhanced revenues and profitability,​ and faster ROI.
3 .​
Not Choosing the​ Most Qualified ERP Software Vendor
When shopping for ERP software,​ choosing the​ right vendor can make the​ difference between a​ successful implementation and ending up with one that falls short on​ satisfying your business needs .​
One of​ the​ most common mistakes in​ vendor selection is​ choosing an​ ERP software vendor who doesn’t know your business .​
Decision makers are often under the​ misconception that choosing software by a​ big name provider will equal a​ big return on​ investment (ROI) .​
However,​ most big name providers are often too big to​ offer specialized industry knowledge for any specific industry .​
Avoid putting yourself in​ a​ situation where you​ have to​ teach your ERP software partner your business .​
Choosing a​ partner who already has an​ in-depth understanding of​ your industry will help you​ achieve more rapid deployment,​ be more cost effective,​ and be more efficient with the​ use of​ your ERP software solution .​
In many cases,​ resellers will have to​ learn your business and then retrofit a​ customized solution to​ meet your specific needs,​ which ultimately costs you​ more money .​
Find a​ partner who is​ using best practices,​ not just generic business process flows,​ in​ your industry.
Avoid vendors who are not in​ sync with where your industry is​ going .​
Instead,​ look for a​ partner who both knows your industry and knows where your industry’s future is​ headed .​
Your vendor should be very knowledgeable with new industry standards and incorporate related processes into their standard ERP software solution to​ handle these requirements,​ such as​ RFID .​
This will save you​ money by eliminating the​ need to​ customize your solution to​ fit standardized industry requirements .​
Additionally,​ the​ vendor you​ choose for your ERP software should ensure that solution licenses are all encompassing for any unique and necessary modules,​ such as​ EDI,​ RFID,​ and chargeback management.
Plan on​ having a​ long-term relationship with your ERP software partner .​
Be leery of​ vendors who want to​ implement your system and run; you​ want the​ vendor to​ grow with you​ so you​ can continue to​ grow your business .​
Responsive product support,​ ongoing product releases,​ and user forums such as​ on-line bulletin boards and user conferences are all essential business tools and services that your vendor should offer if​ they are looking to​ build lasting relationships.
4 .​
Not Giving ERP Software Implementation the​ Attention It Needs
a​ common problem during ERP software implementation is​ the​ lack of​ a​ committed Project Manager on​ the​ customer’s part .​
The majority of​ successful implementations occur when the​ customer’s Project Manager dedicates 80-90% of​ their time to​ the​ implementation project .​
The role of​ the​ Project Manager is​ to​ streamline the​ process and keep things in​ check .​
When you’re investing your money and time into implementing a​ system that will enhance the​ performance of​ your business,​ isn’t it​ worth dedicating someone to​ making sure it’s done right?
Lack of​ commitment and support from the​ top is​ another area where companies fall short .​
The President or​ other top executive of​ the​ company should be involved .​
This does not by any means refer to​ them leading the​ day-to-day activities of​ the​ project,​ that’s what the​ dedicated Project Manager is​ for,​ but more so to​ their being involved in​ status meetings .​
a​ solid commitment from the​ top will flow through the​ organization to​ make implementation of​ your new ERP software a​ success.
Not documenting your business process flows when implementation is​ complete is​ another common ERP software mistake .​
The most successful transition can be achieved when there is​ written documentation for each department .​
This enables the​ company to​ continue to​ conduct business at​ its maximum potential during transition and learning .​
And,​ in​ the​ event that an​ employee leaves or​ changes positions within the​ company,​ the​ next person stepping into the​ position can learn the​ job more quickly and do the​ job more efficiently if​ there’s documentation at​ hand that serves as​ instant training.
Don’t assume that your employees’ training needs have been met by combining the​ implementation with the​ initial training provided by the​ vendor .​
This is​ another common misconception that can lead to​ failure of​ your new ERP software solution .​
It is​ imperative that employees continue to​ receive training after the​ software has been implemented,​ even with documentation that helps support employee training .​
Once the​ new system is​ live,​ users should have continued follow up training,​ whether it​ be every 4,​ 6,​ or​ even 8 months .​
This will enable your company to​ identify any implementation areas that may not have been needed at​ the​ time of​ deployment,​ but which have become necessary later on.
Proper and thorough testing is​ another common oversight when implementing ERP software .​
It is​ necessary to​ perform a​ day in​ the​ life test where users from each department of​ your organization do their job using real data .​
Walking through the​ complete process with a​ pseudo-real order while still in​ testing will allow you​ and your users to​ identify any errors or​ misunderstanding in​ the​ process flows before live deployment .​
In many cases,​ problems will be discovered during this testing process that may require some minor modifications before going live .​
In order to​ minimize errors after deployment and maximize the​ potential of​ your new ERP software,​ it​ is​ crucial to​ test all of​ your data,​ procedures and processes before launch.
5 .​
Not Investing in​ ERP Software for the​ Long-Term
When choosing ERP software,​ be realistic about your expectations and perceptions of​ cost - you’re making an​ investment to​ improve or​ enhance your business .​
So,​ while hard dollars spent are important,​ the​ key is​ choosing the​ right ERP software and the​ right partner who will provide you​ with a​ fast and effective implementation,​ high ROI,​ and low TCO after implementation .​
While human nature tends to​ lead us down the​ path to​ the​ bargain deal - we often do this at​ home,​ not just at​ work - with ERP software,​ what appears to​ be the​ lowest cost solution often results in​ the​ greatest long term cost .​
When securing proposals,​ if​ you​ find a​ vendor’s quote to​ be far below that of​ other vendors you​ are considering,​ chances are the​ deal is​ too good to​ be true.
Use your intuition and good business judgment when comparing provider costs .​
Look for applications that support your ability to​ achieve your company’s primary strategic goals .​
Work within your budget,​ but make sure you​ know what you’re getting up front and anticipate with your provider when you​ can expect to​ start seeing a​ return on​ your investment .​
Hasty decisions in​ favor of​ the​ lowest cost ERP software provider or​ solution may leave you​ plagued later with hidden costs,​ and delay or​ eliminate any ROI for your business.

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