How To Avoid The Most Common Pitfalls of ERP Software Selection
An Enterprise Resource Planning, or ERP Software system is a critical inclusion in many a business as it delivers vital information about the intricate workings of the business from multiple sources to a centralised hub where the data is analysed. When the ERP software is working well, smooth sailing ensues within the business, however, when there are problems with the ERP software it becomes very difficult to extract accurate information or a reliable overview of the business. Here are some of the most common downfalls that companies encounter during the assessment and selection period of purchasing a new ERP system.
1. Relying Solely on The ERP Software Consultant’s Sales Demo to Evaluate the ERP System
When assessing multiple ERP systems, it becomes quite difficult to effectively compare what has been presented as each consultant will produce a demo based on his or her interpretation of what they understand to be required. A good idea would be to outline expectations from the demo ahead of time, requesting the various scenarios that have already been identified as critical in an ERP system, and thereby allowing the consultants to demonstrate their products on a level playing field, as it were. The ‘script’ should enable the recipient to determine how accurately each ERP system addresses the requirements of the business, and how the various features can benefit the business.
2. Lack of Systems Strategy
When embarking on the acquisition of an ERP Software system a business needs to have a very clearly defined vision of what the end goal is; what exactly is it that they are wanting to accomplish by implementing ERP software? In addition to this, it is important to understand the difference between realistic and unrealistic expectations. A systems strategy will structure and drive the assessment of the benefits of an ERP solution, and the subsequent ERP implementation. This will include the financial and strategic benefits, as well as more intangible benefits such as the ability to accurately and quickly access to data in order to ensure timely decisions are made, as well as weighing up what financial impact the various options are likely to have.
For these reasons and more, it is vital that there is a clear understanding of the benefits of an ERP solution as this will ensure that the strategy remains on track, while simultaneously informing your decisions during the ERP software selection process and beyond.
3. Not Comprehensively or Accurately Specifying Requirements
If there is not enough time invested in plotting, documenting and capturing what the requirements of the ERP software will be for the specific business at hand, there is a possibility that a poorly matched system may be selected. In the world of ERP software, it is always best to retain a specific industry in mind and make every effort to source ERP software that caters for this in order to avoid selecting an ERP solution that works perfectly for one industry but lacks functionality that is critical for another. It is worth spending the extra time on the planning and workflow stages in order to achieve the best ERP platform possible.
Most ERP systems will do the majority of what is needed as standard, so it’s advisable to spend the allocated investigative time as productively as possible, focusing on requirements that fall outside of the standard features set. Focus should be given to the requirements that promote the best interests of the business, those that give the business a competitive advantage, are specific to the industry on hand, or the features that the current ERP System is not satisfactorily managing.
4. Not Obtaining Commitment or ‘Buy-In’ from All Relevant Decision Makers
Following on from point 3, often one department will make a decision and begin a project without pausing to first ensure that all relevant parties are on the same page, usually based on a requirement that is raised, and superficially agreed upon, during a meeting, for example. Despite it being easy to see why this could go wrong it is a surprisingly common pitfall of selecting an ERP system as too often the assumption is made that the requirements are straight forward, with priorities being common to all departments. This, however, is a dangerous assumption to make as the Technical department’s ‘wish list’ will be very different from that of the Marketing team, for example. When discrepancies in the vision are discovered mid-way through the project it will usually set things back drastically in terms of time and money already invested in the project. Ensure that decision-makers and key employees are all in agreement
5. Lack of Focus on the Vendor’s Ability to Deliver
A common pitfall is to focus entirely on the ERP software and its ability to enhance and aid current workflow, viewing this as an isolated project. This is only part of the selection process as it is equally important to involve reference sites visits and or calls, assess the experience and calibre of the consultants who will be involved in the implementation of the ERP software, and also to assess the implementation time frame and methodology that has been presented. All of these factors play a crucial role in executing a comprehensive ERP system selection process.
6. Focusing on Financial Cost as Opposed to the Benefit to the Business
There is the saying, ‘if you pay peanuts, you get monkeys’, and this is certainly true when assessing and purchasing an ERP software system. Although it is only natural to want the ERP system implementation to conclude on time and within budget, this is not always a realistic expectation – some room for flexibility must always be allowed in order to obtain the best possible end result. Wherever possible, vendors will attempt to retain a competitive edge, however, focusing purely on cost savings often results in the sacrifice of what is ultimately necessary functionality, leading to frustration on both the business and vendor’s part in the future. This approach does not take the ability of the ERP system to deliver the expected business benefits into account, often resulting in a system that does not function optimally. It would always be a better idea to retain 100% of the required functionality in order to obtain the best end result, even if this means a small degree of flexibility in terms of budget. It is also important to make allowances for the expenses incurred during the implantation phase which includes maintenance, training and the amount of time required to get the new software implementation off the ground successfully.
Introducing a new ERP system is always a big decision for a business, however, if there are open lines of communication between the customer and vendor, and thorough planning takes place, the process need not be a hugely stressful one. By being aware and mindful of the above mentioned pitfalls it is entirely possible to select a well suited ERP system for the business that will take it to the next level of productivity, and ultimately success.
Learn more about the Omni ERP Software Solution to see how we can help your business.
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