ERP systems are dominating the market today. Despite their popularity, many of us are still unsure about why to implement one in a business. This article explores the reasons for implementing an ERP system and how it can improve a business by replacing traditional systems with new ERP systems.
ERP stands for Enterprise Resource Planning, and it integrates the different yet valuable aspects of a business into one system, regardless of whether the company is a start-up or an enterprise. The changing pattern of business, expanded territory, and ownership concerns prompted the need for a more robust ERP management system.
Why implement an ERP system? Businesses have identified various sectors that make up a company, regardless of its size. The functional areas of an ERP system include accounting, project management, manufacturing, customer relationship management (integrated with ERP), human resource management, and business intelligence. A survey of 650 people showed that over 90% of users want accounting management in their ERP software, and project management was the second-most desired feature. Manufacturing is automated through ERP, allowing better tracking of products and services. ERP also acts as a business assistant by forecasting results.
Business Needs & Requirements:
Consider what the ERP system needs to do by having a designated internal team gather feedback from different areas of the business on desired features and creating a business requirements analysis document that outlines the ROI and metrics to measure it.
- Does the ERP system cater to my business segment (e.g. e-commerce, professional services)?
- Does the ERP system meet all the specifications in the company's requirements document?
ERP Functions and Features:
Look for an intuitive interface and dashboard with KPIs and report creation, as well as advanced BI, data mining, and data security. The ERP should also be able to integrate with existing systems and be customizable.
- Is the user interface user-friendly and consistent across all modules?
- Can additional features/modules be added as the business expands?
- Is the ERP software accessible through a mobile app?
- Does the ERP system have business intelligence tools for report creation and data analysis?
- System Usability:
System usability is important for an ERP system because it directly affects the user experience and adoption of the system. A usable ERP system is user-friendly, intuitive, and efficient, which results in higher user satisfaction, improved productivity, and reduced errors.
- Is the ERP well-designed? Is it easy to navigate, have clear and concise interfaces, and provides users with the information they need when they need it?
- Will my team be able to easily adopt and leverage its capabilities, leading to better outcomes for the business?
- Accelerated System Integration:
The ERP should integrate with existing systems and have connectors for real-time data synchronization.
- How will existing data be transferred to the ERP system?
- What software will connect legacy systems and data to the ERP system?
- Does the ERP system integrate with other business systems?
- Ease Of Implementation:
The timeline varies based on the deployment model, with cloud-based ERP having the fastest implementation as the vendor handles it. The implementation will involve migration and data cleansing and require rigorous testing.
- How long will the implementation take?
- Who are the vendor's implementation partners and what is their area of expertise?
- Are testing tools included with the software?
Vendor Industry Expertise:
Consider the vendor's expertise and successful history in your industry, as well as references and financial viability.
- How knowledgeable is the vendor about my industry?
- How long has the vendor been in operation?
- How many successful implementations does the vendor have and how many are in my business segment?
- Can the vendor provide customer references?
Technology & Innovation:
Advanced technologies such as cloud, AI, machine learning, IoT devices, blockchain, and augmented reality can improve ERP systems.
- How scalable is the software and can new features be added as the business grows?
- Does the ERP system utilize AI and machine learning for advanced data processing, personalization, and process improvements?
- Does the ERP system support IoT, blockchain, and augmented reality?
Find out how the vendor plans to improve, add to, and support their product, and the frequency of updates and patches.
- What new features are in the pipeline and when will they be released?
- Does the vendor have a set schedule for updates and is there an extra cost to upgrade to new features?
Customization & Scalability:
Customization may become important as the business grows and may guide the cloud deployment model selected.
- Is the ERP system customizable?
- What support is available for customization (APIs, etc.)?