Enterprise Resource Planning (ERP) software is constantly changing as new technology is discovered. Each year brings with it new features, new models and new deployment options. The abundance of ERP options, while useful considering the many types of business needs, can be overwhelming when choosing a new ERP system. In order to choose the best ERP platform for your company, you must consider the following tips.
Look at the Entire ERP Lifecycle
ERP investments have a long life, typically 15 to 20 years. In order to determine which ERP system is best, we must explore each and every phase of the ERP lifecycle. We have to consider what drives people to actually acquire the ERP system, what leads to success during the deployment, and then we have to consider what IT leaders need to do to administer and maintain the system.
The first consideration is the reason for implementation. Our data indicates two common themes that appear in the majority of ERP implementations. The first is the need for improved reporting. The second is to support executive initiatives. Other common concerns include industry-specific initiatives and the need to accommodate future growth of the business. In many cases, this growth comes from international expansion and acquisition. All of these issues point to the importance of the data model underlying the product and how the product affords both integration and the expansion of the business.
It is also crucial to consider implementation challenges. Our analysis indicates that every ERP implementation experiences similar problems, particularly:
- Managing change for end users. Ultimately, if users don’t end up actually using the ERP solution, the project is a failure. Effectively managing change depends on a variety of things. A good user interface is important, but so is the ability to support actual business processes.
- Documenting business processes. This practice becomes particularly important as the business changes and has to update the ERP system. Business process documentation can come in the form of detailed process guides, or it can be executed implicitly in the application through effective support for workflow and process automation.
- Managing the transition from implementation to operation. Technology and working with appropriate partners both contribute to success. ERP is more than an application – it’s a long-term relationship with solution providers.
The final consideration is the actual operation of the ERP platform following implementation. The most important consideration is that business owners can drive ongoing improvements. Other important issues, not surprisingly, include executive sponsorship and, again, end-user training.
So, what makes a great ERP system?
Obviously, an appropriate system has to be able to meet the base requirements of the enterprise. A manufacturing company, for example, must have the appropriate manufacturing modules. The best products, however, have features that address the problems that we see at each stage of the ERP project. We finally get to the answer to the question we posed at the beginning. What makes the best ERP platform? What are the truly differentiating features?
- Data Integration. The ability to incorporate data from across the business.
- Workflow. The ability to create and manage business processes.
- Financial Consolidation. Functionality to incorporate data from different operating units and from different countries. These capabilities are key to both supporting executive projects and to supporting enterprise growth.
- Budgeting. This presents a challenge for many ERP platforms. Budgeting processes require business leaders to review actual data and to make commitments on future spend and performance. Since this data isn’t just a record of an actual transaction, it can really stress rigid data models.
- Data Management. Finally, a system should encourage clean data. Dirty data frustrates reporting, business growth, end users, and executives!