ERP Software

ERP software selection, Part II

There may be more cost-effective and lower-risk alternatives to buying ERP software in order to improve a business, but none will have such a high Return On Investment. A business that has made the right choice in ERP software selection will see the largest dollar amount in costs cut as well as the highest dollar amount in increased profits.

There are really two approaches that could be taken by a company seeking the right software, and both are equally good. Whether a business needs to run a meticulous and painstaking selection process or whether it can take a less demanding, more cost-effective approach depends on a few variables.

First of all, how much knowledge about ERP software do the business leaders bring to the table? If management is already well informed, the search doesn’t have to start at the very simplest point. A company can go right to a few of the top vendors selling the type of ERP that will fulfill its requirements. It is good time to note that due to the state of the global economy, businesses should take a good look at a vendor’s financial solvency before making that final selection.

The same goes for the level of complexity of the business needs. A company with standard business operational needs will not need to be as scrupulous in searching out just the right software.  Many vendors have excellent ERP software on the market capable of taking on typical processes. A company whose requirements are complicated, on the other hand, will likely find only one or two products which can support all of its necessities.

The third variable has to do with finances.  How much can a business afford to lose in time and money, if the project fails?  In other words, what is the risk to project ratio, -how much risk can a project absorb?

Implementing ERP software is risky. It is not a simple task; it is not comparable to buying other types of software. These applications typically have a very long implementation period. In many cases, they require significant integration, configuration, and customization before they will run properly. In fact, it is not unusual for it to take nine to twelve months before ERP is completely operational. It goes without saying that very few companies are able to handle an all-at-once deployment of software whose purpose is to revamp the way the entire business is run. So, most businesses have to select ERP software that allows for stages to be rolled-out one at a time. This is not without risks. In the meantime the business is running –business as usual- partly with the old system while adjusting to the new.

Written by :

Amy Cruz