In accounting, ERP is the acronym for enterprise resource planning software. ERP could be described as a database software package that supports all of a business’s processes and operations including manufacturing, marketing, financial, human resources, and so on. In other words, the goal of ERP is to have one integrated system for the entire company.
The integration of all of a company’s information from all departments, processes, operations, etc. requires that an ERP system be very sophisticated. This in turn requires a company to commit considerable resources for planning, training, and implementing an ERP system.
|7 Steps to Evaluating ERP Software Before The Purchase|
Although there are subtle aspects of evaluation unique to ERP software, the main factors for consideration are universal to almost all major software purchases. Once software is implemented, evaluation of its effectiveness is important, but many businesses fail in their ERP implementation because they did not properly evaluate the software before purchasing it.
In no particular order, the following are several tips for pre-evaluation of ERP software.
- Know the vendor – This does not mean that you must have known the vendor before you started looking for the right software. It means that you should find out as much as you can about them. How successful have they actually been? Find actual quantitative and qualitative data that you can use to compare them to other vendors. Do not rely on the data they give you, because they may only report data that makes them look good.
- Avoid fly-by-night ERP software vendors – Once you know your vendor, you should know how reputable they are and if they seem like a company that is in it for the long haul. Nothing is worse than being two years into the implementation of major software only to find out that the vendor is gone, leaving nothing, not even the source code, behind.
- Attend conferences and talk with other customers – A great way to find out about customer relationship software‘s success and failures is to talk to actual customers. Not everyone is going to blog about the horror stories of their ERP software. In some cases, that may actually hurt their business, but if you meet them face-to-face and have tea with them, it is amazing what details might emerge.
- Test the system – When it actually comes to using the software, you need to test it. Most companies will provide some type of trial access or demo. It may be available during or after the vendor’s presentation. Whenever it takes place, make sure the right people are there to test it. In other words, while IT department employees should definitely be present, they are not the ones who will be using the software. Get it in the hands of employees who will actually use it and see how well they work with it.
- Be prepared to negotiate – Many vendors send sales people to your business not just to be courteous but to also feel you out and get an idea of how much money they can squeeze out of you. This is natural and should not offend you, but it should make you conscious of the fact that you can work with them to get the best price and best packages included in your POS software deal.
- Consider your current systems – What will it take to get your ERP software working with the rest of your systems, and how willing is the vendor to help you make it happen?
- Think long term – When you make a big purchase, you need to be prepared and willing to work with the manufacturing software and vendor you choose for several years. If something about it irritates you from the beginning, imagine that irritation after five years. Do not settle for a solution that is only partially right for your business or that will not be scalable as your business grows. Consider where you want your business to be 5, 10, or even 15 years later.