Evaluation of ERP software is a very challenging and tedious task. Organizations are very cautious because the ERP they chose has a long term impact on the organization and organizational productivity. A wrong choice can easily land an organization in a mess which they will find difficult to come out of. As people say 'ERP is like a marriage'; Once you start to use an ERP and have your Business Data on the ERP for some time, it will not be an easy task to switch over to another ERP. The heavy investments (more in terms of organizational resources than the money) and the complexities associated with the implementation make moving to another ERP an extremely tough decision. So there must be a diligent process for evaluating ERP software. The evaluation process of ERP software should be properly defined and directed. An ERP selection process will typically involve the following:
1. ERP selection team: At the time of ERP selection, most of the companies follow the process established by Chief Information Officer or IT Manager. In addition to CIO or IT Supervisor, the ERP selection groups must also consist of functional heads, top management agents and real users. A knowledgeable and developed team can definitely assess different suppliers for their strengths and weaknesses and make a much better choice.
Scope of ERP Software application: A good ERP package should have functionalities to meet today as well as future needs of the organization. Full scope of the ERP software should outline practical expectations of all business division such as Sales, Stock, Financing, Procurement etc. It is very tough to get an ERP Software which matches your needs 100%. Generally a 70% fit is considered in shape enough. Though throughout the demos you might feel that a software meets your requirements 100% but that doesn't take place in real. First of all because Organizations are not extremely clear of the Requirements at the beginning phase. Secondly it is extremely tough examine an ERP functionality in a demonstration which normally lasts about an hour. For that matter even if you had a demo long lasting 4 hours you will not be able to comprehend an ERP in that information which you typically require. A typical ERP software application will have the following performances:
- Accounting/ Finance
- Distribution
- Manufacturing
- HRIS
- Material Management
- Procurement
- Customer Relationship Management
- Graphical Dashboards now called as Management Dashboards
- Some Reporting tool (Either integrated or third party ones).
- And other market particular modules like could be a Transport Module, Fixed Deposit Management etc.
There are several ERP packages available in the market, each having its own strengths and weaknesses. Every plan has its own concept, architecture and set of functionalities. Organization require to recognize ideal supplier by examining many factors such as the item's features, customization intricacies, implementation success rate, expense, client referrals, post application assistance, regional and Worldwide presence and variety of setups. ERP must likewise support multiple places, several business, multi currencies and numerous languages( if required).
TCO Analysis: When examining expenses, besides the ERP Package cost also consist of expense of future upgrades, implementation costs, personalization expenses, Supporting software license expenses( OS/Database and so on) and hardware costs and so on. Also consider the costs that you will incur over a 5 year window atleast. This will allow a fair comparison of a number of ERP plans, in addition to specify the long term ROI. Organization must also clarify with ERP vendor for any unpredicted and hidden costs that might arise in the due course.
2. Combination with other Applications/Equipment: Apart from ERP, companies use several software application applications. An ERP may likewise be required to integrate with these applications like Mail server, Participation systems, Production Devices, Weigh scales, Bar Coding devices etc for exchanging information. Organizations must talk about these problems with ERP vendors throughout the examination stage itself. These interfacing also might need interaction of the ERP supplier with the manufacturer of these machines/applications to inspect if they will have the ability to provide the info to ERP vendor in some computer legible format.
3. User Friendliness: An easy to use user interface of ERP software increases the user acceptance rate. During ERP demo organizations need to check how easy to use the system is. They ought to inspect the navigation structure, clicks required to open a function, drill down options in reports, Visual alternatives etc.
4. Longevity of ERP Application partner: ERP Execution and assistance are a long drawn processes. Organizations might require frequent support and aid throughout the lifecycle of ERP. This is where the longevity of the execution partner plays an important function. It is essential to the check business background of the ERP application Partner. Some concerns that company should look for about the vendor are:.
How many years has the business been actively participated in the software organization?
Recognize their core business; ERP service should be one of their core companies and not one of their smaller companies. Individuals typically tend to hive off their smaller sized companies as the Economies of Scales do not validate for them to be in ERP organization. In such a circumstance you could typically be left in the lurch. So you need to have some Source Code plans like Escrow or some exit route for you if a Partner or the ERP vendor himself decides to shut store.
When was the ERP product introduced in the market and what is the existing release version?
Inspect the customer list pertinent to your organization and the consumer testimonials.
Ask for Client references. Attempt and visit their Client website though it may not be possible for time restrictions along with the unwillingness of Clients to showcase their ERP to a third party. Plus for Clients such site gos to are often an annoyance. Insist atleast on a Consumer Recommendation from the ERP vendor.
You need to remember that choice of the right implementation partner is maybe more important than the selection of the Product. Almost all Products will be basically excellent and will have functionality conference a reasonable amount of your requirements. It's the Partner's method of application that can make the important difference. Some ERP companies likewise implement themselves as opposed to a Partner approach. Both approaches have their merits and demerits.
When you remain in search of ERP Software, the most important point to keep constantly in mind is that the software you are looking will end up being a lifeline of your company. Its a tool that will directly affect the long term performance and efficiency of your business. So selecting that need to certainly deserve a substantial amount of attention from the right set of people in your company.
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