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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.

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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Small Business ERP

Finding the right Small Business ERP for your company

Small Business ERP is a unique category of enterprise software. It typically needs to have all the functionality of large corporate ERP software, but it needs to have as few clicks and screens as possible to ensure that the users are not overburdened with a lot of time spent entering data. The size of the business does not necessarily change the functionality required in the software. Rather, the small company often has a need for higher efficiency since they cannot afford the manpower to maintain the system.

When you look at ERP software, there are three tiers of applications. Tier 1 is large multi-national software solutions, such as Oracle, SAP, and JD Edwards. Tier 2 is the mid-market level. These applications are suitable to businesses in the range of 50M to 250M. This is the sweet spot of the market. Like any bell curve, the mid-market has both the most customers, as well as the most product offerings. The last tier is the Tier 3 offerings which is the small business ERP category. These are systems suitable for 1 person startups to about the $50M level, although some of these products become inefficient if they have more than 20 users on the system. So while they claim to be Small Business ERP offerings, they are for the smallest of companies.

Things to look for in Small Business ERP

When evaluating small business ERP solutions, it is important that you properly screen the potential software candidates to ensure you get a software that fits your business. If you don’t you will run into many different issues. Here are some tips:

1. Make sure that the small business ERP software you are looking at fits into your niche.
2. Make sure that the data entry is simple and efficient
3. Make sure that the database platform can be managed by you or your staff
4. Look at the support offerings of the small business ERP provider to ensure that it is tailored to your needs
5. Determine that the small business ERP reseller provides enough training to properly get your staff up and running

Let’s discuss these points. First you need to make sure that the software you are looking at fits within the business model or industry that you work within. A retail store should not use a software designed for distributor. See what other customers that the software provider has worked with in the past and ask for specific examples of companies in your industry.

You need to make sure that the users do not become slaves to the system. Make sure that the data entry screens are simple, efficient and do not require a lot of bouncing around to other screens to input simple things such as invoices or purchase orders.

The heart of the system is the database. You need to make sure that the database does not require a full time system admin to maintain it. It should be designed to be self maintaining and easily managed. Learn a little bit of the technical requirements from the Small Business ERP solution provider. You do not want to be in the situation where you need to bring in a specialized database administrator if later something goes wrong.

Small Business ERP should have support designed for you the small business owner. You should easily be able to call in and immediately speak to a rep for support. You don’t want to have to wait for days to get answers. Be careful of small systems with small support staffs. Especially be wary where the system is developed and maintained by one or two people. Yes, they are also a small business, but it will be a big problem when they are not available to assist you.

Lastly, you and your staff need to have enough training to properly operate the application. Do not skimp on this point. You need more training than you think. In fact, it would be good to plan on training to go live and at least one other training session a month after go-live to answer any questions and resolve any problems from a lack of knowledge. You won’t become experts on the system in a day, so plan on future training sessions.

The future of Small Business ERP

The future of Small Business ERP seems to be one of two paths. There are those systems that will continue to be operating on a small network of computers and do quite well on them, such as Quickbooks or DBA Software. The other path is that of small business ERP companies such as Netsuite, who are leading the charge to bring small business ERP to the cloud. This means that you will have access to the application through a browser and no installed software will exist on your site. You are licensing access to a system that stores your data remotely and operates via an internet connection.

People often are concerned with this model as your data lives somewhere else. The fact of the matter is it is probably safer there than on a computer sitting in your back room. The data center security policies and the high-levels of authentication that are enforced by cloud computing providers truly lock down your data and its accessibility. Whereas your server in your back room is often open to anyone who happens to wonder by. This seems to be riskier. Nonetheless, whichever path you choose, you can be assured that the small business ERP industry is continuing to grow and develop.

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How to Have a Successful Selection Project

What to do right in a Business Software Selection Project

An ERP selection project (or any business software selection project) is a difficult endeavor. There are many things that need to be managed. There have been projects that seem to go well and then suddenly things end up on the wrong track. The critical thing about an ERP Selection project or any business software selection is that it lays the ground work for the implementation project. So if it is done correctly, you will have a higher chance of success in your implementation. If you have a weak selection project, then you are likely to have an equally weak implementation.

Things to ensure success on your Selection Project

There are several things you can do to ensure success on your selection project. Firstly is to gain top management’s support for this project. If the project is not a high priority at the top, then it will never succeed. This is one of the most important things that needs to be in place for a project to be successful. Good project management dictates that you have support for the selection project before undertaking the project. If the staff see that management doesn’t really care, then they will not care. However if people realize that management has made this a priority, they will shift their work to accommodate this new project.

The next thing that will help to ensure success is to have well defined expectations. This means that you need to map out the goals that you want to achieve with the new system. Often people will define their requirements for the system, but they have no higher goal. What is driving this need for a change? What is the expected successful outcome. Any successful project begins with the end in mind, but an ERP selection project is driven by the overriding goal of a successful out come resulting in significant positive changes. This goal will get you through the difficult times. Without it, the project is destined to achieve mediocre results and will likely take longer and be more difficult.

A focused timeline will also aid to the success. If you can define and manage to a set timeline and stick to it, the selection project will move at a reasonable pace. If you do not set a timeline and manage to it, the project will move at the pace of the vendors and will likely flounder. Again, this goes back to the management support. It needs to be a driven project. A selection project that is treated like just additional work will not be successful.

Focused and available resources are also key to the successful ERP selection project. Typically there are two teams, which may overlap. First is an executive steering committee that will decide on key things such as issues that arise where departments are competing with one another, or issues where time and budget are involved. This team is usually composed of senior management and at least has people empowered to make strategic decisions. Second is a functional team that represents the various areas of the business. Accounting, Quality Control, Manufacturing operations, Purchasing, Order Management, Inventory Control, etc. are all key areas that should be represented in the functional team.

This team needs to have the time to dedicate to the project. Companies that are truly committed to the success of the selection project often will move key people out of their jobs and give them full time responsibilities to the project. This is often very difficult and creates a short term gap in the various departments. But usually the remaining staff rise to the challenge and the leader from the department will provide invaluable insight into how the software system should function. The best people to assign to the project are the people you can least afford to remove from their jobs. They are the movers and shakers of the company and they make things happen in their departments. But this personality is exactly what you need on your selection project. They will give insight and a sense of drive to the project that will ultimately make it and the company a success.

Another key area to keep in your area of focus is the acceptance of change. Change management is one of the critical things you can do to ensure that the implementation is a success. But why talk about this in the selection project? Because the selection is where the change management process begins. If you can communicate your goals and visions for the project and get people enrolled into the idea of a change to their working environment, and make them excited about the change, then you are on your way to being successful. Change management boils down to effective communication. If you can over communicate the needs, the reasons for the projects and the successful vision, then you will gain the trust and support of those who will likely be doing more work in the short term to make the selection project a success. This includes those who are not directly involved, but will ultimately be users of the system. You need to make sure that everyone is involved.

This ties in with the last success factor and that is the communications plan. A plan needs to be drawn up to help communicate the goals of the project, the status of the project, they impact the project will have on users and even communicating bad news. Be sure to build into the project the communication plan. For example, at initiation, communicate the goals and desires of the project to the employee community. Along the way, communicate the status of the project. Make people feel involved or at the very least they are not being kept in the dark about the project.

What a Successful Selection Project looks like

If you have done the above mentioned items well, then a selection project will look like and will be a success. There are many aspects to a selection project, including people, processes, and the technology. Managing all of these factors well will result in your success. But communication and support are critical. You can not over communicate too much. Be sure that you have support and that everyone understands why you are undertaking the project. If you do this, you are on your way to choosing the right software and ensuring a successful outcome to your implementation, all thanks to the good work you put in on the ERP selection project.

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