What to Look For and What to Ask
Hunting for an ERP solution? If you answered “yes,” you’re setting your business up for success in today’s digital economy.
The digital economy is a global network of economic interactions occurring through digital technologies, but, according to Mary K. Pratt at TechTarget, it’s more than just using computers to automate tasks once done manually or with analog devices. Pratt writes: “[T]he digital economy highlights the opportunity and the need for organizations and individuals to use technologies to execute those tasks better, faster, and often differently than before.”
One example of such technologies is an ERP system. An ERP solution integrates all a business’s data, departments, and applications (e.g., sales, financials, CRM, etc.) into one platform—allowing employees to access the same, accurate information at the same time. If the system is cloud based, this information is available anytime, from anywhere.
To choose an ERP solution that fills your needs, you must first ask a few questions. For example: “Am I searching for an ERP system because of the digital economy? Or because my business is operating on a legacy IT system? Or both?”
It is important to have a solid “why” behind your decision to research ERP solutions. It is also important to understand just how large scale an ERP implementation is in terms of time and financial resources. So, you should ask: “What is the ERP implementation lifecycle?”
Another important question is, “Do we have an ERP strategy in place?” If the answer is “no,” then the following information will be a guide to help point you in the right direction.
Identifying Your Organizational Framework
The first step of your ERP strategy is to identify your organizational framework. This framework is composed of two parts: your IT environment and your “political” structure.
Let’s start with the IT environment.
Assuming you’re replacing a legacy ERP solution or multiple disconnected systems, you’ve probably been facing some challenges—such as no single source of truth, limited access to organizational data, reliance on manual workarounds, lack of communication, and expensive IT maintenance costs. Implementing a modern ERP system eliminates these pain points, and you benefit from improved collaboration, automated business processes, a 360° view of the entire organization, and more.
These benefits are obviously selling points from the IT perspective, but, in terms of your “political” structure, they need to appeal to your entire organization. Organizational support, from the top down, is essential to ensuring a successful ERP implementation.
A CIO article on ERP system selection notes:
Every organization experiences power struggles and political issues borne of the differing mandates and pressures its various groups work under. A classic example? The tussle between IT security practitioners and “shadow IT,” in which lines of business deploy technology without explicit IT approval. Then there is basic human nature around change, with some individuals trying to drive evolutionary shifts in the business, while others prove more resistant to change, worrying that new technologies will disrupt their everyday work routines, or even take away their job[s].
Resolve these concerns by communicating the ERP implementation plan to your team members before starting. Describe the features and benefits it will provide and say that you and your leadership team are fully backing the plan.
Understanding Your Main Functional Requirements
Before contemplating the many cloud ERP systems on the market, it’s important to think through your main functional requirements. Assemble a project team, made up of team members from across the organization, and, together, determine:
- What specific challenges do we need to solve?
- Do we want a system with general or industry-specific functionality?
- What do we expect the ERP system to provide (e.g., advanced financial management features, a fast implementation, easy integration to third-party systems, high usability, vendor support, etc.)?
To help answer the last question, prioritize your functional requirements into levels of necessity.
- Highly Desirable
- Not Needed Now but Important for the Future
- Not Essential but Nice to Have
Your Budget and Available Resources
Of course, implementing one of the many available cloud ERP solutions that could fulfill your required functions is only possible if you find a system that lands within your budget. Look at how the vendors price their ERP software. Do they charge per user, or do they charge for the features and resources you actually use? (Charging by user limits the system’s effectiveness and employee access to accurate information.)
It’s also critical that you know what resources (such as capital and staffing) you have available for implementing and then operating the proposed ERP system. Without establishing a budget that matches your resources, you’ll encounter problems down the road.
Scalability, Total Cost, and Future ROI
Researching an ERP system’s total cost of ownership (TCO) will help you set a budget. Calculate TCO by adding up the system’s purchase, implementation, and ongoing infrastructure/people costs over a five-year period. Ask each ERP vendor for these numbers. If any of them attempt to evade your question, take note. Evasive behavior may indicate that a vendor is not for you.
An ERP system’s scalability (or lack thereof) is another indicator of suitability. Because your business will change over time, the ERP software must be able to manage your current and future needs. It should also have a proven track record of keeping up with developments and innovations in the ERP industry.
Technical and User Support
Finally, because you’ll need different levels of support throughout the sales process, the ERP implementation, and the future operations of the ERP platform, you must choose a trustworthy vendor.
Analyst Brian Sommer of Vital Analysis released a whitepaper on this very topic: Partner or Predator?. In it, he writes, “Great cultures can be found in yogurt, acidophilus milk, and some firms. Unfortunately, great cultures don’t always exist in technology firms that you’ve come to rely upon. And, if you do business with a technology firm with a bad culture, it could be a very expensive, frustrating, long-term decision.”
He says the answer for software buyers is to “find the vendors that will treat them fairly and transparently”—vendors that do not exhibit predatory behaviors. Such behaviors include focusing on short-term needs, forging a better relationship with your wallet than with you, and using long, confusing contracts.
How REDA powered by Acumatica Can Help
REDA software powered by Acumatica passionately pursues being a vendor you can trust. We have created the ERP industry’s first Customer Bill of Rights, which promises an easy and understandable End User Licensing Agreement (EULA), an open platform for rapid integrations, consumption-based (not user-based) licensing, sustainable pricing, ERP implementations without hidden fees, and more.
Acumatica is an award-winning ERP system. Born in the cloud, our software helps businesses transform with cutting-edge technology and best-in-class functionality, which are necessary for success in today’s digital economy.
If you’re wondering how to choose an ERP system that you can afford, that supports you from the get-go (and throughout the entire process), that will grow with you and provide a return on investment—Acumatica can help. Contact our team of experts today. They can answer questions or set up a demonstration to show what Acumatica can do for you.