Not all investments are created equal. There’s a difference between, say, the pack of gum you impulse-buy in line at the grocery store and that tattoo you hopefully did not impulse-buy.
When it comes to ERP selection, the stakes couldn’t be higher: It’s a premium, multiyear financial commitment that could determine the fate of your business. You’ll need to do some research—lots of it—before rolling the dice on an ERP.
Gartner segments the ERP selection process into the following steps (full content available to clients):
- Determine the criteria that are important to you in an ERP application.
- Rank the criteria based on their relative importance.
- Score the prospective vendors’ ability to comply with each criterion.
- Evaluate the results, compare the applications and select the best overall fit for the organization.
By asking vendors about pricing, support, product capabilities and more, companies can sufficiently evaluate ERP software and confidently invest in a system that fits the unique needs of their business while avoiding implementation failure. We’ll dive into all this and more below.
Here’s what we’ll cover:
Get the Most Out of Vendor Demos With Our Scorecard
A great way to record this information is with the Software Advice Vendor Demo Scorecard. This customizable spreadsheet helps businesses grade vendors based on key criteria such as product features, training, support, specifications, integrations and pricing.
Use it as a foundational guide for conversations with vendors, and record notes within the document to provide context for each criterion.
Simply download the scorecard and open it in Excel; fill in your desired features, integrations and vendors under consideration; and grade to your heart’s content. Doing so will ensure that you have the complete picture for each software offering, while providing a side-by-side look at the features and functionality most important to your business.
Select the Best ERP System by Asking These 6 Questions
Paying attention to the answers vendors give to these six questions will guide you toward selecting a system that will support you now and grow with you in the future.
1. What are the defining features and functionality of the software?
Once you’ve determined the functionality requirements for your business, you can assess whether a given vendor meets your most important criteria.
- How integration-friendly is the software?
- Are there any routine tasks or processes that can be automated?
- What types of data analytics does the system allow you to report on?
- What do those reports look like?
- What security features will help keep your data protected?
These are the defining features and processes that’ll make your business go, and it’s critical that you take stock of any industry- or workflow-specific specifications that will maximize your ERP’s efficiency.
2. How does the system architecture leverage emerging technologies?
A strong architectural infrastructure must be able to harness and employ future-forward technologies in a way that makes sense to the user. Manifestations of this in an ERP include:
- An intuitive user interface.
- Support for multiple deployment options.
- The freedom to customize the software to address specific business needs.
- The ability to integrate third-party applications.
- The implementation of recent innovations such as artificial intelligence and machine learning.
Having these technologies baked into the underlying system architecture is not only advantageous to the user in the short term—it also bodes well for the longevity of the software and the vendor’s desire to stay on the cutting edge of the ERP market.
Given how rapidly technology evolves, your new software could be outdated by the time implementation is complete. Getting more mileage out of your investment can only be a good thing.
3. How much will it cost to secure and maintain access to desired capabilities?
It’s no secret that ERP software can veer a little toward the pricey side, at least in the early stages of the buying process. But you know what’s even worse? Not anticipating how much it’ll cost and incurring unexpected expenses.
Keep these three types of costs in mind when calculating the projected total cost of the ERP buying and implementation process:
- Initial costs. These are the investments in the procurement and implementation process—any upfront spending incurred before the go-live date. Typically, an on-premise ERP system will have higher initial costs, given its reliance on hardware and larger-scale setup procedures.
- Ongoing costs. When calculating an estimate from a vendor, it’s critical to include not only the initial costs for procurement and implementation, but also the ongoing costs incurred throughout the life of the software. This can range from technical support and maintenance to integrations to subscription fees and everything in between.
- Avoided costs. The most commonly overlooked element of the buying process is the avoided cost—i.e., any expense, recurring or nonrecurring, from applications that will no longer be used once the ERP is implemented. The far-reaching, cross-departmental functionality of an ERP system means you might not need that clunky old inventory management software, which is an equally important consideration when calculating the total cost of your ERP initiative.
4. What services are available to support implementation and deployment?
The implementation and deployment of an ERP system—with all its disparate applications and a mountain of data—isn’t easy stuff. It’s why many vendors offer professional services to assist in the training, assistance and general support from the time of purchase onward.
SMBs with limited IT staff or expertise should carefully consider the array of support offerings among vendors, as well as their response time and overall attentiveness throughout the selection process.
With ERP software especially, it’s imperative that you tie up all loose ends prior to implementation and have help at the ready if things don’t go as planned.
5. What does your current and projected market presence look like?
The financial health of a software vendor is just as important as the software itself. A healthy organization means more stability and reliability—which means more resources for investment in both their product and their clients.
A strong financial foundation is also a great indicator in the general viability of the software itself; a thriving company on an upward trajectory is usually in that position because of its:
- High-quality product offering.
- Loyal customer base.
- Optimism about the future financial health of the organization.
You want an ERP built to last, and that requires a vendor that will remain viable throughout the life of your system.
6. What long-term strategies are in place to improve your products and services?
In that same vein, a vendor’s future offerings are just as critical as its current slate. What will the software look like a year from now? Five years? Ten years?
Given the rapid evolution of the ERP market, an organization’s vision for the future viability of its product is paramount.
A healthy software vendor should have plans that are both narrow and broad in scope, such as:
- A roadmap for specific product enhancements.
- Plans to implement emerging technologies.
- Strategies to maintain long-term competitiveness within the ERP market.
Next Steps Before Talking to a Vendor
Whether you’re ready to get the ball rolling or still in the exploratory phase of your search, there are more things you can do before you even talk to a vendor.
- For starters, check out our ERP product page for a comprehensive listing of ERP software vendors, complete with user reviews and all the relevant information you need. You can even filter systems by industry, size, price and rating to narrow your search.
- Give us a call at (844) 689-4876 for a free 15-minute consultation. Our software advisors are here to help you find the right ERP solution, and can suggest a list of products that best fit the needs of your business.