How To Navigate The ERP Purchase Decision-Making Process

The following steps are designed to give organizations a better understanding of the functions needed for the business software to perform, establish its infrastructure requirements and achieve ROI quickly.

When purchasing a strategic software solution such as a new enterprise resource planning (ERP) solution, making the right decision is vital. The following steps are designed to give organizations a better understanding of the functions needed for the business software to perform, establish its infrastructure requirements and achieve ROI quickly.

Assess functionality needs - Start by evaluating the business challenges and individual pain points that you need to address and determine the business value your organization needs to extract from the software. What problems should it solve, or what opportunities should it create for your business? For a CEO, you might be focusing on growing revenue from existing customers, attracting new customers or supporting your move to a new market. For a COO or factory floor manager, you might be challenged with improving throughput on the factory floor, reducing inventory levels or coordinating supply and demand to prevent stock outs. At a very early stage of your decision-making process, you will want to compile a list of cross-functional requirements to use to reach out to software vendors that have solutions that match these requirements.

If replacing legacy software, make sure to keep in mind future business goals, as opposed to simply writing a list of the shortcomings of the old software. Where do you want to be in three to five years and what does your ERP solution need to support in the future is almost more important than what the system does not do for you today. Manufacturers in the past few years have undergone a significant transformation to address market challenges. For many manufacturers, this has meant moving from a very standard manufacturing model such as make-to-order, make-to-stock or engineer-to-order to a “mixed mode” model which can put added pressure on ERP solutions to support multiple manufacturing models within a single solution. Another key question to ask is: How you want to deploy the solution? Legacy systems traditionally are on-premises solutions. Today, you have a choice in deployment including traditional on-premises, hosted, “true cloud” or some hybrid of any or all of these options.

Have an open dialogue with software vendors - The beginning stages of any software decision should involve an open and honest discussion with the software vendor about the organization’s business ambitions. This is where vendors show their strengths as a true partner — suggesting the options that will best accommodate the company’s overall business strategy.

Understand the end game, not just cost of ownership - New software requires a considerable business investment, however, it’s important to measure ROI, not just cost. Consider the up-front purchase budget alongside other key considerations such as the benefits the organization can expect to gain from that software, as well as the long term maintenance costs.

Today’s next-generation enterprise software solutions, for example, have the ability to save businesses valuable time by reducing the amount of administrative tasks that employees have to complete, automating processes and streamlining workflows. This results in a more agile business, that is more responsive and competitive.

Supporting the new software – Be sure to understand the capabilities of your company’s IT department. Will the team need help throughout the entire implementation process and beyond, or will they just need a training session before managing the deployment themselves?

Many software vendors include support and upgrades in their sales package, but be sure the vendor is prepared to provide the level of service needed. Having this information and working with a vendor that understands the needs of the organization will help when deciding what software/support bundle is best suited for your company.

Research the software vendor – It is vital that companies check credentials and do the necessary research to make sure they work with a software vendor that cares about the business requirements, not just about where the next sale is coming from.

Reputable software vendors will consult with the company on different options available and offer honest opinions on how to use technology to improve the business. This is especially important when purchasing an ERP solution, which is a whole package, not just one small element of a business’s technology.

Choosing new software is a complex task and can also be a confusing experience. Once implemented, continuous evaluation will ensure the new software is supporting the business strategy and, ultimately, enabling business growth.

Dave Lechleitner is Sr. Manager of Product Marketing (Manufacturing) at Epicor Software Corporation.

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