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Now more and more technologies are being developed to streamline workflows and daily business tasks, one of which is Enterprise Resource Planning (ERP) or ERP Softwares.
It is a complete and integrated system that manages all aspects of a production or distribution based business, aligning financial management, human resources, supply chain management, and manufacturing or distribution with the core accounting functions.
At its core, an ERP system is a resource for data centralization, workflow management, and tracking. ERP systems record information, which can then be assessed by all departments to decide whether the right process is involved with a particular task.
This feature helps ensure that each employee can handle tasks with the same process, and have the same data to use as a point of reference.
An ERP system will provide companies with the tools they need to make business activities smooth across all departments. This system makes it easy to track all aspects of your business processes, including production, finance, distribution and back office.
Choosing an ERP solution certainly requires a serious commitment considering deployment time, money, and resources. Unfortunately, companies tend to make decisions like this based solely on budget and in a hurry. Worse, the quick decisions they take will often lead to obstacles in the future.
So that this does not happen, know five tips for choosing the right ERP system for your company’s needs.
1. Perform process review and analysis
Since ERP is an important business initiative, you must first define and document your business processes, problem points, and current strengths. Analyze all aspects that your business needs now and in the future that can be addressed with an ERP system.
Taking all those aspects into account. You will find it easier to choose an ERP system that is expected to meet business goals and objectives.
2. Evaluation of technical suitability
It is important to understand how a potential software solution will align with your current infrastructure. So don’t forget integration. An ERP system that doesn’t work with your old and/or critical office systems is not a solution, it’s just an unused or unusable expensive software.
Make sure the ERP can adapt to your flow so you don’t have to retool your business with other software.
When deciding which ERP to choose for your business, it is highly recommended that you check the compatibility of the existing systems and software with the ERP first. It is critical that you have a software environment that is technically unified so that data can be shared and transmitted across applications.
3. Track the potential business benefits of the new system
If you don’t measure it, chances are you won’t achieve it. ERP projects are no different. It’s likely that companies see ERP as a way to reduce costs, increase revenue, or scale growth, and you must estimate and measure the benefits against these metrics if you want to realize ERP’s full potential.
Feel free to seek references from colleagues, employees and other contacts what they use or recommend for companies like yours. Do some research on the internet or hire an ERP consultant if necessary. However, don’t assume you have all the answers if you don’t have experience with ERP. Find another source of independent ERP advice to validate what you hear from a software sales representative.
Be sure to uncover the “hidden costs” associated with ERP, including implementation costs, hardware upgrades, project team resourcing, software maintenance and more. Be sure to budget for the ERP costs, along with all of those components. This is useful for minimizing cost overruns for ERP system procurement.
5. Develop a realistic implementation plan
While you’re still in the sales cycle, you should take an estimate of the vendor’s deployment duration. It is necessary to develop a comprehensive project plan that includes not only the activities required to install the software, but also the activities required to ensure that the solution is fully functional, tested and accepted by the end user. This plan should be developed prior to the ERP system selection and implementation decision.