Choosing an ERP software solution is a major undertaking

Even after you have pinned down your business ERP software solution in terms of flexibility, adaptability and cost there are decisions to make on which modules to buy and how it will all hang together.

As a key member of many ERP system and software selection teams, I discovered that all ERP software solutions have one thing in common.

Whether or not it is manufacturing business software such as IFS, or ERP distribution software, or CRM, or ERP accounting software, the software package is only as good as the buy in from the people that are going to use it.

The same rules apply if your organization is looking at deploying cloud technology as an ERP software solution. It can be less of a solution and more of an additional set of problems if the end users are not on board.

Get the people involved

Find out how every employee feels about a new software system – do they think it will add value or are they resistant to change?

Even if the ERP system and software selection is the responsibility of the IT department, having the whole company on board and working as a cohesive unit means that people will make it a success whatever the chosen solution.

If there are any doubts, however, step back from the software selection activities and focus on developing a sound ERP strategy.

Why is an ERP strategy so important?

In order to create an ERP software solution that generates meaningful output, every person and process in the organization should be included in the development of an ERP strategy. It is important to have this in place before defining the system set up parameters or you may not end up with the solution you wanted.

Here is a for instance. In the 1990s I worked with consulting engineering companies that implemented an excellent ERP software system called BST MIS. In the "flat file" days, there were fixed parameters for project definition and matrix reporting. It was critical to get it right first time because the company’s revenues and financial reporting hinged on accurate project set up. Project budgets, timelines, resources and billing rates were front-end loaded into the project management system and revenues were generated by charging people’s time and expenses to projects.

After an implementation was complete, it was typical for managers to question the accuracy of financial reports if they saw numbers that were radically different from their projections. They always blamed the software but the software was seldom the root cause of inaccurate reports.

More often than not it was because the company hadn’t mapped out a sound ERP strategy to get everyone on board before they selected and implemented an ERP software solution.

An enterprise wide integrated process can be a hard concept to grasp for some companies. Typically these organizations had no process in place to ensure that every department and project manager used the appropriate project charge out rates, or that they dealt with cost overruns in a timely manner, or that everyone observed the same cut offs.

It used to take me months to get a company back on track and fix the data. The saying “there’s no time to do it right but there’s always time to do it over” is so true but these days I am committed to helping people do it right the first time.

With the advent of 3GL, 4GL and 5GL mapping out an ERP software system is more of a challenge. From high end, big company ERP software applications such as SAP ERP right down to small business ERP, everything is flexible and user defined.

Things were more straightforward in the fixed field systems of the past. You would set up a department number in a field labeled “department number”.

These days when you ask the ERP software company “What would this field be used for?” the mostly likely answer is “What do you want it to be used for?”

Not to worry - when you have taken the time to get your ERP software solution mapped out and you know exactly how every person and process fits into the plan, you will be able to answer that question with complete authority.

But if you are completely new to the concept of enterprise resource planning, start by taking a test drive on an open ERP system. There are a number of web ERP software companies such as Compiere that offer free trials without having to download software. This is the way to get comfortable with the look and feel of an ERP program before you make any final decisions on an ERP software solution.

What do you think is the best or worst ERP software solution? Please take a few minutes to share your opinion, or make a comment, or ask a question of the ERP community here.

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