How to evaluate an ERP software system

by Alex Forsyth Developer

When it comes to evaluating and choosing the right ERP software to efficiently manage your business processes, you need to consider a lot of things.

Evaluating or selecting a new Enterprise Resource Planning or ERP software solution for your business needs may need a lot of considerations and aspects. There is a myriad of factors to consider to make sure you are choosing the perfect ERP solution for your business needs and functions.

Rolling out the wrong or inadequate ERP software system can simply mean that not only the initial outlay is wasted but can turn things frustrating for the users when it comes to managing the business processes and the entire workflow. Choosing an outdated software with limited operational capabilities can hamper the business performance and can make everything within your business unnecessarily complicated. Also, a wrong selection of the ERP solution can result in increased cost of ownership, software and service failures, and a software integration that is not simply fit for your business purposes. On the other hand, evaluating and selecting the right ERP software solution can deliver -

Operational efficiency
Reduced complexities
Exceeding collaboration between the departments
Enhanced and real-time customer service
Integrated software system
Gain key analytical insights that can facilitate business growth and more new innovative business opportunities.

Things to consider to evaluate the right ERP software system for your business are shared by an expert Odoo ERP consultant below.

You will definitely want to integrate the best ERP solution into your business to leverage automated business operations, streamlined workflow, increased productivity, and enhanced business efficiency and performance. And here are the tips that can help you to evaluate and select the right ERP for your business.

Determine your business requirements:

The very first and foremost thing you need to consider is your own set of unique business requirements. You need to also consider the present and the future state of your business. According to a recent survey, it was found that one of the key challenges most businesses are facing these days is managing the growth expectations. Hence, this needs to focus on things like what is the business headed to and what are the plans for the growth of the business. Your choice of ERP solution must support your business processes and goals as your industry advances and evolves. Consider things like your business processes, the technologies your current system is using, staffing resources, etc. With the preparation of the documentation of your business requirements, you can give a kick-start to your ERP evaluation and selection process.

Evaluate ERP deployment flexibility:

Assessing the ERP deployment options provided by the ERP partner is one of the most crucial aspects to take into consideration during the ERP evaluation process. Remember, you have multiple ERP software deployment models to choose from including the cloud-based deployment model, and standalone or on-premise deployment model. However, both these models have their own set of strengths and limitations. While the cloud-based deployment model offered as the SaaS solution, these are highly recommended for their high scalability and flexibility options. However, the final selection will always depend on the business requirements. Also, there are some hybrid ERP deployment models as well offered by some ERP vendors that can help businesses to leverage the advantages of both the cloud and on-premise models.

Should you go for upgrading your current software system or get a completely new ERP system implemented into your business:

Now, once you are clear with your business requirements and are done with your consultative meeting for determining the system requirements for the ERP software, the next crucial step is to take into account is to know whether your business really needs a new ERP software or a major upgradation of the existing software system will be enough.

As already mentioned, ERP software implementation is one of the most crucial and major business transformation processes, which needs significant resources and time. Therefore, if you have an ERP system already integrated into your business, determine the laggings in your existing system first and if those can be fixed with some major upgrades then go for that if not then choose a new ERP as per your business needs. Evaluating the requirement for a new ERP software or upgradation of the current system is one of the most crucial considerations of the entire ERP evaluation process. This is because if just an upgrade can resolve your business issues and enhance your business performance then you will save time, effort, and money required for implementing the new one.

However, this is not easy to determine. And this is because you won't have to just consider the current gaps but will also need to anticipate the future scope and gaps that may arise in the future. In most cases, replacing the older system with a new and modern one is recommended. And that's because technologies are evolving at a rapid pace. While you may fix the operational issues and gaps in your current software for the time being, this may eventually become unworthy and obsolete in the future. Also, mostly the older systems are outdated and do not include the advanced and latest features and functionalities like SaaS deployment options, specialised add-ons, agility, cloud ERP, etc. Hence, while upgrading the existing system can be faster and cheaper for the time being, in the long run this option may not be a smart decision for your upcoming business requirements.

Ensure complete support of the senior management:

An ERP software system that has been evaluated and selected without any ongoing buy-in from the senior management team can face complications like scepticism and roadblocks. While much of the software solution can roll out at the organisation's lower levels, senior management or senior executives are mostly the ultimate ERP evaluators that ensure success. Involving the upper management of your business in the ERP evaluation and selection process will ensure an ongoing commitment to the ERP selected.

Establish a project roadmap:

A transparent and clear roadmap is necessary not only to ensure a streamlined and smooth ERP implementation process but to also calm down the anxieties of the stakeholders. Using the detailed implementation roadmap, the stakeholders will be kept informed about all the potential advantages of the implementation, the costs involved, expected ROIs, and the implementation timeline. Hence, by creating a detailed and clear project roadmap at the time of evaluating the ERP, businesses can ensure to keep up with their commitments towards the stakeholders and can stay prepared for any potential bottleneck that may be experienced at any time during the ERP implementation stages.

Estimate the TCO or Total Cost of Ownership:

There will be always some additional expenses that will be left unconsidered or unaccounted for during the initial stages of the implementation process. However, it is necessary to consider and take into account these additional expenses to get an idea about the entire project cost. Some of the crucial factors to consider to determine the TCO or the complete estimated cost of the project are the hardware requirements, consultation fees, cost of training, future system upgrade cost, etc. Also, you will need the help of your ERP implementation partner for post-implementation services, so include those expenses as well.

Consider peer references:

Since ERP software evaluation and selection is all about comparing the various ERP solutions available in the market and then choosing the best one for your business requirements, it can be helpful if you can get some suggestions or recommendations from your peers or friends with prior experience. Peers or friends who have recently implemented ERP solutions into their business systems can give you the best and the most genuine reviews about the ERP solutions from their personal experiences. They can also tell you about the challenges they faced during implementation and the best practices to overcome the same to ensure a seamless ERP implementation process.

The ERP evaluation process for every organisation may be different and may vary with the varied business requirements. While there are ample ERP systems available in the market today, considering these few things stated above can help you to evaluate, select, and successfully implement the best-suited ERP into your business.

Alex Forsyth is a highly proficient and experienced ERP consultant associated with the most reliable and renowned Odoo ERP implementation company in Australia, Envertis Software Solutions. The author has written this article to help you evaluate ERP software based on your requirements, business areas, and operations.