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ERP Comparison Tips For Finding Your Ideal System

ERP Comparison – Finding Your “Best-Fit” Software

An ERP comparison is usually one of the first tasks that people take on when looking for a new ERP solution. But what is it that you should be comparing? Is it the feature set? Is it the pricing? Is it the support offerings? There are a lot of various components to choosing the best ERP software system. In your ERP comparison, is it possible to find the best-fit software for your feature needs, but totally fail on the software company’s availability to deliver or support. You may find the software that is the right price, but may not meet your functional needs.

Finding the right software in an ERP comparison is like finding the right spouse. There will be a lot of courting and a lot of flirting, but there are many factors that can affect the relationship. You can think that they are the perfect one for you and yet there is the potential that a few years from now, you will be looking all over again. Carrying the analogy further, if you can find the right one who not only fits your requirements and is committed to not only your short-term happiness, but also is fully committed to making the relationship work, then you will have a successful marriage.

This is so true of an ERP software vendor’s relationship with the client. If in your ERP comparison activities you find the vendor who is truly committed to your success and the success of the mutual relationship, then you will have someone you can work with even when times are difficult. This should be your underlying focus of the ERP comparison activities.
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Key ERP Comparison Factors

There are a number of things that you should evaluate in your ERP comparison, however here are some of the top evaluation criteria you should consider:

1. What is the platform and what is the support for this platform, both from the vendor and from your staff?
When we are talking about platform, we are really referring to the operating system and the database that you will be using with this system. If you are looking at Windows for the operating system and MS SQL server, you are looking at a very common platform with many options for getting support. If you are looking at UNIX and Oracle as your operating system and database platform, then you are again choosing wisely.

However, if you do not have the internal support for the platform you are choosing then your training costs will be increased. But don’t let this be the only consideration. If you need to do extra training to get the right solution for your needs, then do so. If you can get a solution that your IT department can support immediately, and it fits your other ERP Comparison requirements, then make that choice. The main point is that you want to find a solution that fits overall.

Now, you have another platform consideration option to factor into your ERP comparison. Cloud computing. There are more and more ERP vendors who are offering a hosted solution. But keep in mind that this may only be a hosted server, or it may be a true multi-tenant environment where upgrades are easily maintained. This will require little if any internal IT support so it could be a less expensive solution to support. It could also have a negative impact on IT moral since you would be taking responsibilities away from them. The key solution here is to make sure that IT is involved from the beginning of the ERP Comparison when it comes to platform discussions. Early decisions on the platform often determine potential vendor candidates.

2. How do the prospective systems meet your functional requirements?
When most people perform an ERP comparison, they look at the functional requirements. For example: “Does the system offer the ability to issue A/P laser checks?” or “Can the system freeze stock levels for inventory processing?”. These are just a couple of the potentially hundreds of functional requirements with which you will be screening the erp software candidates.

A good way to establish requirements in your ERP comparison is to focus on the uniqueness of your business and ensure that the system supports those specialized functions. Too often people spend a lot of time and effort on documenting the trivial… “Can the system issues a/p checks?” or “can the system do double entry accounting?” Okay, that was an oversimplification, but you should see what we are driving at. The questions to the software providers should be along the lines of “Can the system support a third-party logistics integration?” or “Does the system support lean manufacturing in project based company?” The more focused on your specialized business you can write these questions, the better the differences between the various systems in your ERP Comparison will be demonstrated.

3. How well does the vendor’s support meet your needs?
As mentioned earlier, an ERP comparison and selection is like getting married. And the support agreement is your assurance that when times are difficult, that the vendor will be there to support you. Make sure you consider the potential problems that you may encounter. Will you need 24 hour support? If you are a global company with people working around the clock, you may need it. If you are a single location with 9-5 hours, then a standard 12 hour support may work for you.

Find out the type of support representatives that they have and the levels of training. Understand the levels of support escalation. Get and read the service level agreement documents. All of these will give you an understanding of how well you will be supported.

Find out about upgrades, patches and other software enhancements. What is the standard release cycle? Is it yearly, bi-yearly, or quarterly? What will be needed from your team to make sure the system is at the latest revision? If you get too far behind in patches and upgrades, you may fall out of the support agreement terms. Understand what you are getting into.

4. How true is the vendor’s management commitment to your success?
This is a bit subjective, but during your ERP comparison, meet with the provider’s service management. Find out how committed they are to you as an individual client to ensure that you are successful. Find out how easy it is to engage the service division’s management with an escalation should you have a support issue.

You want to make sure that the vendor isn’t just moving licenses, but rather has a desire to make you successful.

5. Does the price fit your budget? (short and long-term)
Pricing is always a sticking point. Make sure that you negotiate and negotiate well. During the negotiation phase of an ERP Comparison, the vendors are often expecting to drop the prices by double-digit percentages. Don’t leave money on the table. At the same time, realize that there is a final number that they are willing to come to and if you are asking for more than that, they won’t budge.

Don’t forget to factor in the costs of hardware and network upgrades into your budget. These can have a significant impact on your budget. Too often people only focus on the software costs and do not factor in the hardware and upgrades.

That covers up-front costs. In your ERP comparison, make sure you understand the long-term costs, including software license renewals, support renewals, and if there are any limits to the amount of price increase on the contracts. You likely negotiated a good up-front cost, but what about the ongoing costs?

Other ERP Comparison Considerations

There are other ERP comparison considerations to think about, but many are subjective and really up to you to evaluate, such as how well do you feel you work with the vendor? ERP suppliers who are easy to work with often are easy to work with in the implementation. Get a feel for the company culture. Does it fit with your company’s values and attitudes? Sometimes a company with a more easy-going attitude will not work well with a rigid ERP provider. Understand the personality of the company you will be married to for at least the next 7 to 10 years or more.

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Manufacturing ERP Fundamentals

What is Manufacturing ERP?

Manufacturing ERP (Enterprise Resource Planning) software is a much more complicated system than standard ERP systems. Before we talk about software though we need to understand that Manufacturing ERP also consists of the business processes that it takes to run a manufacturing operation. Unlike distribution or service businesses, there is a complete set of processes that enable the create of value from raw materials. These materials are supported by a supply chain which also needs to be managed.

Setting the software aside, there are inventory processes, shop floor processes, design processes, procurement processes, quality control measures and processes, and order management processes that need to be properly managed in the manufacturing ERP system. Many people have tried to solve the issues related to all of these processes by applying a new software solution to manage the process and have failed.

A blend of people, technology and process factors needs to be evaluated and optimized. If any of these three areas are missing or weak then the overall manufacturing process will not succeed. What will make you successful is improving the processes before you apply a manufacturing erp software solution.
Manufacturing ERP

When evaluating Manufacturing ERP software, it is important that the functional requirements for each of the three factors needs to be evaluated. How will the people be managed and evaluated in the Manufacturing ERP system? How will controls on the machinery and other technology be managed in the manufacturing ERP system? How will the technology enable efficient operations?

A trend in manufacturing over the last decade has been to apply Lean Manufacturing principles. Essentially, you want to remove waste from a process before automating it. If you do not, you will make the inefficiencies operate faster, creating more in-balances in supply and demand. It really doesn’t matter what you produce in terms of products, or what you utilize as your input raw materials. Lean principles balance out your supply and demand and in doing so, create better throughput. With the advent of Lean Manufacturing principles, many ERP software systems have incorporated a lean thinking into their systems.

Using a combination of Lean principles and common sense, you can work at creating operational efficiencies that will help when you apply any manufacturing erp software system to help manage the business processes. Bottom line: don’t automate a mess.

Manufacturing ERP Software

Looking at Manufacturing ERP Software, you need to evaluate how well it manages the manufacturing business functions (such as creating purchase orders, the business processes (such as managing the demand planning process), and how well it manages the data (as in providing efficient access and ease of reporting). That being said, all systems typically have a set of financial modules, a collection of inventory modules, manufacturing modules, and sales and order modules. These various modules each have certain functionalities that help you run the core business.

The differentiation between these various systems is in how well they accommodate the niche business that you are in. If you are a process manufacturer making blends then there is a certain set of Manufacturing ERP systems that work best for you. If you are a machine shop, then another class of Manufacturing ERP solutions work for you. If you are a complex or project based manufacturer, then you will look for different software than others. The good news is that there are ERP vendors that specialize in these different niche areas and others.

Understanding the class of software you want to evaluate is key to creating a short list of vendors. Keep in mind that there is a class of ERP software that fits in as a generalist niche solution. In other words, these software do all aspects of manufacturing fairly well, but do not have a specialty in any certain industry. Often these manufacturing ERP solutions will rely on their value added reseller chain to create add-on modules to fit certain industries. For example, there may be a generalist solution that has a set of 3rd party modules (written in the native toolset) that provides the process manufacturing functionality.

Things to look for in Manufacturing ERP solutions

When you evaluate Manufacturing ERP software, it can seem overwhelming. There are hundreds of manufacturing ERP software vendors all looking to be the next system at your company. If you step back and look at the industry that you belong to and evaluate the systems based on those that are successful in your industry, you will have taken the first step.

Second, you need to look at those systems that support all areas of your business. If you have unusual requirements make the vendor demonstrate how they will handle these unique functions. Many vendors claim to support various business processes, but when you make them show them in detail, there will be a clear distinction between those that can and those that only think they can handle your requirements.

Thirdly, you should evaluate the standard functions, but do not spend too much time on those things. Being able to cut a check or create a debit memo are pretty standard these days. Rather, have the vendor spend time showing you how they will handle your unique Return Merchandise process or your specialized Quality Management requirements. There is a consulting joke about the fact that “you as a customer are unique just like everyone else.” This is both true and false at the same time. Every business thinks it is unique on the whole. But the reality is that you probably do a majority of the things that most other businesses do. However, there is probably 20 percent of the things you do that make you special and make you successful. You want to make sure that these are the things that you drill down on with the vendors to ensure that you can continue to be special in those areas.

Taken step-by-step or with an area-by-area focus, Manufacturing ERP systems can be selected and implemented with great success.

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Manufacturing ERP