Choosing an ERP, as we’ve discussed before, is not an easy undertaking. Previously, a blog entitled “6 Mistakes to Avoid When Implementing an ERP” was published. We’ll now be looking at those six mistakes in further depth.
To recap: Enterprise resource planning (ERP) is a type of business management software that supports the basic internal processes of a company. It allows companies to use an integrated system to manage all the pieces of their operation. Product planning, development, manufacturing processes, inventory control, customer and vendor data, materials management, sales, and marketing are all examples of what an ERP system can control and streamline.
.jpg?width=225&height=150&name=studying_(smaller).jpg)
Mistake #1: Failing to research and understand the ERP company you chose.
An ERP vendor’s job is to sell you their product. There are many different ERP companies to choose from; some are more suitable to large corporations versus small businesses and vice versa. If you do not have a general knowledge base about the ERP companies that you interview, it will be easy to let the vendor sweet-talk you into choosing them; it’s what they’re good at. They do not, however, know the ins and outs of your business’s current system, nor are they knowledgeable about the specific processes you are seeking to replace. You, therefore, should know those things before going into negotiations with an ERP company.
It is also good to have an idea of how long an ERP system will take to fully implement. Sage ERP X3 – which is only marketed to small and mid-size businesses – claims to be implementable in 45 days, whereas ERP systems marketed to big corporations could take as much as three times longer. If you have a specific time line or some other type of time constraint, you’ll need to consider this before choosing your ERP vendor.
Price is another factor that needs researching. Although it is likely to cost several million dollars to implement ERP software, there are factors that determine the exact cost – how big is your business? How complex is your business? How many server boxes will the ERP software require? How many people will be using the ERP software? How many user licenses will need to be purchased? How many consultants are you willing to pay to assist you in the implementation? Et cetera.
Inaccurate research can lead to many problems. One system integrator did a survey and found that, out of the 172 respondents, 50% spent more than they budgeted for, 60% found that implementation took longer than they forecasted, and 60% of respondents believe that they received less than half the benefits they expected from having ERP software in their business.
Failing to consider your needs – types of processes to replace, time constraints, budget constraints, etc. – and failing to have answers to the aforementioned questions before you begin shopping for and negotiating with an ERP vendor will only be to your detriment. Having done more research and gaining more knowledge will get you the right ERP system for the right price.
Contact Oates & Company today – we can help you with your research and lead you to the right ERP company.
