How To Choose ERP Software For Your Business

An enterprise resource planning (ERP) system is common across various industries and is used in different applications. Useful for small and big businesses, an ERP allows you to streamline and manage your daily operations, from compliance to project management.

Unfortunately, with the countless ERP options in the market, choosing the right one for your business can be a bit overwhelming. While most businesses feel that all ERP systems are the same, they vary widely in terms of costs, features, or functionalities.

If you want an ERP that connects business processes efficiently and helps you meet your unique business goals, make sure to keep the following in mind to know how to choose the best ERP software for your business.

Here are 11 essentials reasons about how to choose ERP Software:

1. Know Your Goals

One of the first things you should do when choosing ERP software for your business is to be clear with your goals. Defining your objectives requires a thorough audit of your company and its processes. You also need to consider your future plans for diversification or expansion.

Depending on the type of business you’re running, your goals may involve the following:

  • Speed up delivery days
  • Reduce warehouse costs
  • Optimize inventory levels
  • Improve cash flow
  • Boost customer satisfaction

As you define your business goals, it’s crucial to get some representatives involved in the process. They may include your IT staff, department heads, and end-users. The input of your stakeholders isn’t only crucial to choose a suitable ERP, but it can also make a difference to achieve a smooth operation and prompt installation.

2. Determine Your Unique ERP Needs

Now that you know your goals for your ERP, it’s time to determine why your business needs ERP software. More often than not, most businesses select an ERP based on the price, popularity, or hype in the market. However, you should avoid this approach as much as possible. The reason behind it is that your business may get stuck with unnecessary customization, highly integrated solutions, and costly systems.

To prevent that, you should opt for ERP software that comes with industry-specific features that suit your company’s needs. In this way, you’ll be able to find some opportunities to lessen overhead expenses, collect reporting requirements, and increase workflow efficiencies. This approach may also help you enjoy a better return on investment (ROI) and other long-term benefits.

3. Set Your Budget

Implementing an ERP in your business requires a major investment. The costs may include software licensing fees, hardware, maintenance, and training.

While an ERP can provide your business with several benefits, such as improved customer satisfaction, reduced wastage, and increased efficiency, it’s vital to set a budget for this kind of investment. Defining your goals and setting a realistic budget will help you find the right ERP to implement in your business.

4. Know The Type Of ERP Software To Consider

There are different types of ERP solutions available in the market these days. If you don’t know what’s best for your business, here are some of the options you can choose from:

  • Software as a Service (SaaS) – The software provider monitors and maintains this kind of software. You’ll only get a license when you need to use it for a particular period. With a stable internet connection, this ERP solution can be accessed wherever you are and whenever you want.
  • Hosted Software – You have to maintain this ERP software on servers that might be owned or rented. You may connect it to the internet, so you can easily monitor everything.
  • On-Premise Software – It’s controlled and installed in its own physical location hardware. Typically, it’s maintained by the vendor.

5. Search For ERP Vendors

At present, there are numerous ERP vendors you can rely on. However, not all of them may benefit your business. So, make sure to filter your preferred vendors to save yourself from endless phone calls and many online brochures.

Luckily, there are several key considerations that will let you narrow the field and save you time. These include the following:

  • Industry Experience – Have a background check of your preferred vendor. Determine if they’ve been in the industry for years and know what level of expertise they have. Although there’s nothing wrong with working with a new ERP vendor, settling with the most reliable and highly experienced one is always wise.
  • Reputation – Make sure that your chosen ERP vendor has a strong reputation for dependability and quality. To know whether or not a vendor is reputable, be sure to read online reviews about them. Such reviews will give you an idea of their service quality and other client’s experience.
  • Technology – When it comes to ERP, it’s critical to choose a vendor with state-of-the-art technology. In today’s business world, advanced technology can help your business a lot. So, if your preferred vendor still uses the old technology, it’s best to settle with a vendor that uses up-to-date technology.

6. Compare The Price Quotes

After shopping around for the best possible ERP vendors, it’s time to request estimates to make your final decision on the budget you’ve set. Remember to ask for detailed quotes with the specification of training, implementation, concurrent user numbers, software licenses, and some related fees.

The cost breakdown must be included in the software license agreement (SLA). Other than that, stay updated with the government grants so that you won’t miss out on any potential funding for your business. The good thing about some ERP vendors is that they offer support for free to help businesses prepare for the grant application.

7. Take Advantage Of The Demo Versions

Searching for an ERP system is much easier when you’ve tried the demo version. Therefore, if ERP vendors offer demo versions, don’t hesitate to take advantage of them.

By using demo versions, you’ll know how the ERP works and whether or not the interface is easy to use, convenient, and transparent. It’ll also enable you to check if the ERP allows you to perform all your business processes more efficiently.

Taking advantage of demo versions may also allow you to meet the vendor’s representative to implement the software. This can be your chance to ask more specific questions and meet the team with whom you’ll work closely in the long run.

8. Consider Software Features And Functionalities

When selecting ERP software, another thing that you should take into consideration is the features and modules that your business requires. Many ERP systems can do various things, so ensure that the system you choose is well-optimized for the functionality you need. Besides, you want the features of your chosen ERP system to work for your business and not the opposite.

For instance, if you prioritize your financial services highly, ensure that your ERP has robust accounting process features, such as accounts receivable and accounts payable modules. Some modules for aspects like supply chain management and inventory are great to have, but only if the software meets your company’s critical needs first.

Making a comparison of the features and functionalities of several ERP systems is one of the ways to get a better idea of the ROI you’ll get. This process may also help you break down the pros and cons of every system. Plus, you’ll know what value they can add to your business and what they can do to improve your organization.

9. Check The Compatibility And Integration With Your Current System

ERP software uses a single platform to streamline, manage, and automate business processes. Due to this, you should either integrate your preferred ERP software into your current system or replace it overall for better data flow.

If your chosen ERP software doesn’t integrate with other systems, it could result in an increase in labor costs, data migration issues, and hindrance in business processes. Therefore, it’ll become useless for your company. That’s why businesses should choose an ERP system that’s compatible and easy to integrate with their current systems for hassle-free data transmissions.

10. Consider ROI And Not Just Cost

When looking for an ERP system, you don’t only have to consider the price and investment alone. You also have to think of the ROI you’ll earn. Always remember that the best and most comprehensive ERP system offers efficiencies and business profits.

However, suppose you go for less-suited ERP systems that are cheaper and relatively economical. In that case, you might want to do more customization as per your business requirements that can automatically increase the cost. 

11. Choose The Right Implementation Partner

There are instances that purchasing the license for ERP software is never enough. Most businesses, particularly small and medium-sized companies, lack the necessary resources, knowledge, expertise, and time to ensure a smooth rollout.

With this in mind, you might want to work with reliable managed service providers to help you with the implementation process of your chosen ERP. These providers will help you get started with your ERP software by providing your business with a skilled team.

Bottom Line

By following the steps carefully from the very beginning, you’ll never have a hard time with the ERP selection process. Plus, you can be assured that you’ll find the right ERP software that will benefit and help your business grow in the long run. So, even if it’s a daunting process, your time, effort, and investment will be all worth it.

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