ERP implementation can sometimes be expensive, time consuming and not always produce predictable results. In 2013, the average cost of an ERP project was $2.8 million, according to a survey by Panorama Consulting. Companies exceeded their budgets by 54% and took 16 months to complete their implementations. Despite these dismal numbers, a good ERP system is worth considering, and when you choose the right one for the job and implement it well, it can be an investment that pays off down the road.
There is no shortage of ERP options on the market. Some ERP vendors cater to large enterprise organizations, while others focus on small to medium-sized businesses. Others offer scalable cloud-based ERP solutions. No matter the type, size or price, all of them offer basic accounting features. What separates one from another are the additional business management features that may suit your business’ unique processes.
CFO.com offers a number of helpful tips for choosing the right ERP system.
1. Evaluate first – Before you start shopping, look at your current system (or lack thereof) and identify its strengths and weaknesses. From there, set clearly defined goals your company wants to achieve. Perform a gap analysis and do not settle for less than 80% of the features you want out of the box. The rest you can get with customizations and 3rd-party add-ons.
2. Automation – Look for an ERP system that can automate the processes that you routinely perform. Do not be shy about asking a vendor to demonstrate that automation when they show you a demo of the product.
3. Smart business intelligence – It may sound redundant, but too many business intelligent systems are over-complicated and fail to provide applicable data. Make sure the one you choose is easy to use and relevant to your needs.
4. Governance, risk management and compliance – A comprehensive ERP system will help you ensure your business complies with standards and regulations and can assess the potential risk of ventures and investments.
5. Do not fear the cloud – The cloud is not for everyone, but do not let fear be the deciding factor that causes you to avoid it. According to Panorama, 46% of businesses that utilized cloud ERP saw savings of 41% or higher. Whether you dive into the cloud completely or use a hybrid model, it definitely has its benefits in certain situations. At the very least, consider all of your options and then decide if the cloud works for your organization.
6. Next-gen ERP – The new ERP is flexible, easy to use and works well in cross-platform environments. That means you should be able to access it in the office, on a laptop in a hotel room or even on a smartphone on a train. It should also include social media features and integration with other business management software.
No ERP software will have everything you want out of the box. Just look for the one that has most of what you want and that is flexible and scalable so that it can grow and evolve along with your organization.