What is the Best ERP?
The ‘best ERP’ is the one that meets the needs of your business. Not the first search result on Google, or the highest reviewed system on G2 or Gartner. Not the best-known ERP. Identifying which one is best for your business needs is traditionally a slow and manual process. Unless you conduct a thorough ERP evaluation, you will never understand which ERP system is best for your business’ bespoke needs, and why. If that is something you want to understand, read on.
According to Gartner, ERP implementations failure rates can exceed 75%
Whether you are buying an ERP system for manufacturing, eCommerce, distribution, or education, finding the right ERP (Enterprise Resource Planning) system can be daunting, especially when multiple stakeholders are involved. Here, we will explain how to find the best ERP for your business with ease.
What Is Enterprise Resource Planning (ERP) Software?
ERP systems help businesses manage an expansive range of business functions such as accounting, invoicing, payroll, warehousing, logistics, human capital management, and other additional industry-specific applications. Your company needs should dictate your selection.
Many companies underestimate the necessary process of doing their due diligence in choosing the right ERP system. Organizations often settle for the less-than-perfect option, working around the system’s shortcomings. Well known ERP disasters indicate that this ends up costing more in wasted time and workarounds.
When the perfect match is made, ERP should be a positive force for business transformation and give your organization a critical competitive edge.
Enterprise ERP Trends for 2024
The End of “Traditional” ERP (Enterprise Resource Planning)?
Finance applications and microservices will challenge Traditional ERP
ERP will be put to the test by finance applications and microservices. Big vendors like Oracle and SAP will need to be nimble to avoid becoming roadkill on the highway of change, in order to keep up with companies who embrace digital transformation and now expect much more than what a “traditional” can deliver. ERP vendors have already adopted digital technologies like automation, blockchain, and cognitive tools into their products—but that won’t stop competitors from competing. As new players enter the ERP space with specialized applications and microservices that sit on top of—and integrate with—ERP platforms, anticipate a change in the landscape. Adopting Cloud-based ERP will help companies stay ahead. Deloitte states;
Finance is entering a golden age of technology. As cloud becomes the norm for ERP, finance applications and microservices will proliferate. You’ll be able to drastically reduce the complexity and cost of technology, without sacrificing functionality.
7 Steps to Choosing the Best ERP Vendor in 2024
1. Determine a business case for the ERP system
Research and define and document your current business processes, pain points, and strengths. Think ahead and consider what processes in your organization will look like in the future. What is the reason a new ERP is needed? What are the problems a new ERP will solve? This work will help you outline requirements later ensure you are solving the right problem with an ERP system.
2. Identify and collaborate with key stakeholders to gather requirements
Identify the key stakeholders who need to contribute the the ERP evaluation requirements. Finding an ERP system that works for the organization requires collaboration with these key players to ensure high user adoption later. Skipping this step may cause you to miss a key requirement or functionality that key departments need. Including these voices in the technology evaluation process will deliver high user adoption of the ERP solution after implementation.
3. Collaborate with key stakeholders to define and rank your ERP requirements and evaluation criteria
Understanding your business needs is a crucial step in the process of selecting the right ERP system. Ensure that the identification of these needs (in the form of requirements) is a collaborative process between critical decision-makers. Thinking about your current business processes will help you work out exactly what the organization needs from a new ERP system, how it will fit into the company and what technical and functional requirements are needed to carry out your day-to-day operations of the business.
The idea at this stage is to build a clear picture of how your business currently operates, and how those operations could be improved.
Ensure that all relevant stakeholders collaborate to do this, and that each requirement is well-written and clear. Later you will use these requirements so that potential software vendors can demonstrate their product’s capabilities within the context of your business needs. Consider how a potential ERP software solution will work within your company’s current infrastructure.
Key Considerations for ERP requirements;
- What are your business goals for the next year?
- What areas of the business are growing, and what areas are shrinking?
- How could the right ERP benefit our company?
- Do we have the right budget for our needs?
- What does a successful implementation look like for our business?
Must have ERP requirements
When you and your team are clear and aligned on what your business needs are, the next step is to define and rank your must-have ERP requirements list, the non-negotiables that the ERP system must have, including but not limited to;
- Functional requirements
- Integrations with current enterprise software infrastructure
Nice to have ERP requirements
When you have defined your must-haves, you can then take a look at your nice-to-have requirements. This may include;
- User Experience
- White labeling and branding
- Mobile platform
Consider how a potential ERP software solution will work within your company’s current infrastructure. When you begin the process, make the list as long as possible, and then rank and define the list according to needs. Collaborate to gather and rank these requirements and identify must have integrations. You need to be aware of these requirements so that when you engage solution vendors, you understand the cost of any potential third party integrations.
Ranking ERP requirements
This ranked list will act as your guide when you begin researching options and demoing products.
When ranking this list, it’s important to consider;
- What can we afford?
- What sort of accessibility do you need the solution to have?
- Does the vendor provide an implementation plan and support?
- What are the shortcomings of the current solution?
- What technical features do we need the solution to have?
- What workflows must the new software incorporate?
- What problems should the new solution solve?
4. Search the market for ERP vendors that meet your selection criteria
The next phase in the software selection process involves actually starting the search for new software. Your key stakeholders should be involved in the search for potential software vendors that might meet your evaluation criteria/requirements. Look for vendors that offer solutions that meet your requirements and that have the ability to solve the company’s identified problems. Even though looking at a long list of vendors and comparing them to your needs is long and tedious, it is necessary to find the right solution for the business needs. You can use a technology evaluation platform like Olive to automate this process, rather than risk human error in spreadsheets, and wasting time searching through emails.
5. Compare ERP vendors to your requirements
Through the traditional RPF Process, or by inviting vendors to respond directly to your requirements in Olive you can compare vendor responses to the needs of the business. Often when comparing vendors, you may create a scoring system or scorecard in spreadsheets to quantify how well each vendor measures up to each other and the project requirements. Once they respond you should have a few shortlisted vendors that you can invite to demo. Compare the remaining vendors to your selection criteria to see which best fits the needs of the business.
Be aware of bias during this stage. Software sales reps will always try to bias the decision in their company’s favor, so it’s essential to be aware of this when reviewing vendors. Hidden costs and risks associated with purchasing their software may arise after the deals are signed. At this point, you must do your due diligence to uncover “hidden costs” associated with ERP systems, including implementation costs, hardware upgrades, backfilling your project team resources, software maintenance, limits to the number of users, etc.
6. Develop an ERP Implementation project rollout plan
Remember that vendors are trying to make a sale, so make sure you dig deep into implementation duration estimates with them. Develop an implementation project rollout plan that includes activities required to install the software, along with necessary actions to ensure that the solution is tested, actually works, and is accepted by end-users. Do this before you choose a vendor, so you understand the resource cost involved for project success. This plan should include everything from business process and workflow design to data migration, multiple test iterations, and critical organizational change management activities.
7. Measure the benefits against the costs of the new ERP system
Your client or organization might be looking for an ERP system to reduce costs, increase revenue, or scale for growth. Measure the benefits against the system’s costs so you can understand the full potential of the new ERP system.
Removing Bias from the ERP selection process
There are more than just a few “Best ERP solutions” on the market, and one of the 70+ niche solutions may be much better for your company’s requirements. Don’t choose based on a brand name or what your competitors have. Consider the options that are going to best meet your unique business requirements and sources of competitive advantage.
Asking colleagues, employees, and other contacts what they use or recommend for a company like yours will deliver a biased result. No matter how confident they are, they cannot know your organization’s individual needs or be able to consider and rank those needs against your business objectives. Many will research on the internet or hire an ERP consultant when looking for the best ERP solution. Keep in mind that many vendors pay to participate in some of these well-known software evaluation spaces. The only way to know your choice is the best, is to evaluate all options agains your company’s needs.
Selecting the Right ERP Software can be a Collaborative and Innovative Process, Free of Bias.
Using Olive, companies can ensure they identify and manage all stakeholder’s needs, ensuring everyone has a voice in the decision. Olive’s collaboration and agility speed up the requirements gathering and ranking process and helps you quickly evaluate ERP vendors against your companies evaluation criteria. Olive gets you out of emails, and spreadsheets and allows you to drill deep into your specific requirements in collaboration with department heads.
Olive is a software evaluation platform that’s efficient and free of bias, revolutionizing the process of buying and selling technology.