ERP Selection Mistakes

ERP Selection Mistakes

Don’t Make These ERP Selection Blunders 

Choosing the best enterprise resource planning (ERP) software can feel like an impossible task. Between an oversaturated software marketplace and confusing technical jargon, it’s clear to see how a business can wind up with the wrong system. The good news is ERP Selection doesn’t have to be difficult. To help you make the best decision, we’ve put together a few of the most common mistakes that companies make when choosing enterprise software. Avoid these pitfalls, and you’ll be on the right path to optimizing business processes!  

1. Not Knowing Your Business Needs 

Going into an ERP decision without a full understanding of your business’s pain points and software requirements is a recipe for disaster. You’re liable to end up with a solution that doesn’t meet your expectations or waste money on superfluous features that add no value to your processes. Before embarking on ERP selection, undergo thorough business process modeling, mapping out your current operations and detecting your inefficiencies and sources of waste. 

From this, you can determine which software functions you need to provide necessary improvements. Then, you can create your Request for Proposal (RFP), communicating the purpose of the implementation and specific business requirements. You can also design questions and checklists to use when meeting with software vendors or attending demos. These will help you focus on your ERP priorities and avoid getting sidelined by flashy, unnecessary features. With a clear understanding of your software needs, you’re one step closer to obtaining the best fit for your company.   

2. Prioritizing Cost 

In most cases, the cheapest ERP isn’t the right ERP for you. Prioritizing cost in the selection process can set you on the path to failure. The less expensive choice might not have the right functionality or modules to fully support your processes or offer desired enhancements. Cheap software often lacks the flexibility and usability necessary to align with specific operations or promote high user adoption. Worst of all, these systems are prone to errors, putting you at risk of losing data or experiencing immense downtime.  

Ultimately, the software with the lower price tag could end up resulting in hefty costs that prevent you from generating ROI. That’s why it’s more important to prioritize functionality throughout the selection process; an ERP instance that offers the necessary functionality will be worth the cost. 

Having said that, cost should still play an important role in choosing the right software. In fact, many organizations fail to budget adequately because they don’t understand the total cost of ownership (TCO). Will your ERP be hosted in the cloud or on-premises? Are you hiring consultants to implement and maintain the system? Do you require any additional modules, customizations or integrations? All these factors will contribute to the cost of your ERP. Perform a cost-benefit analysis to check that your ERP implementation will fit your budget and result in substantial ROI.  

3. Inadequate Vendor Research 

The goal is to find an ERP solution that will offer long-term business improvements, but this goal will go unfulfilled if you don’t deeply research potential vendors. Does the vendor have a record of serving businesses in your particular industry? Will their solutions work for a company of your size? Do their clients recommend their software? Make sure to check reviews and ask for references to gain a complete view of vendors.  

Additionally, you want to make the most of meetings and demos. Prepare questions that will explore each provider’s experience and industry expertise. Share ERP requirements prior to demos to receive a tailored demonstration. Create a scorecard to track every vendor’s software performance and ability to meet your business needs. Maintain consistency throughout these interactions, so you can easily compare providers.  

Wrap Up 

The vendor selection process is a critical step to transforming your business through ERP, but the wrong choice could set you back. By avoiding these three mistakes, you can rest assured that you’ve found the best fit for your organization. 

Don’t get bogged down during the ERP selection process. Reach out to one of our ERP Selection experts today!