Article -> Article Details
Title | Top Five Mistakes To Avoid When Choosing ERP Software |
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Category | Computers --> Software |
Meta Keywords | It Company In Vadodara, Mobile App Development Services, Mobile App Development Company, Digital Marketing Services, Digital Marketing Company, Online Marketing Services |
Owner | cuttingedgeinfotech |
Description | |
1. Not Knowing What You Really Need in ERP Software Before diving right into choosing a
solution, take the time to understand what you really need. To begin with,
determine whether you need fully integrated ERP software or best-of-breed
software. This will often depend on the issues you are trying to solve or the
opportunities you are trying to capture, as well as the size and structure of
your company. For example, if you’re a small to mid-sized company with limited
budget and limited resources, then you’ll probably want to consider a fully
integrated ERP software system. This type of system will allow you to
streamline your processes and achieve improved productivity at a lower cost and
with fewer resources. Take into consideration that, in
order to efficiently implement and use best-of-breed solutions, you will need
extensive knowledge of both the business rules and the database constructs
within each application of your business processes. This is due to the fact
that all of your individual systems need to run in unison in order for your
data to be consistent and accurate throughout your operations. If you’re not
prepared to deal with the sometimes overwhelming task of creating your own interface
between disparate systems, then fully integrated ERP software is your better
choice. Unless your needs are very narrow,
expect to experience a significantly lower total cost of ownership (TCO) with
fully integrated ERP software in comparison to best-of-breed solutions. Using
separate best-of-breed solutions can often drastically increase your overall
license and implementation costs, not to mention reduce overall operating
efficiencies. With a best-of-breed solution, you may not be protected from
version obsolescence, which can result in additional investment later on.
Additionally, support of your operations can be hindered as you manage problems
across multiple vendors. The best fit for many small to
mid-sized companies is often fully integrated ERP software. However, the
solution needs to fit most, if not all, of your key business requirements – no
small task for a single application. To overcome this obstacle, choose a
partner with industry specialization who can help to ensure that your most
critical business requirements are met. 2. Not Recognizing the Uniqueness of Your Business Every industry is unique. Lack of
industry specialized capabilities within your software is a common cause of
failure for an ERP software implementation. Often “horizontal” solutions that
serve many different industries need to be significantly customized in order to
fit your business model and to integrate with your other internal systems. Take
caution that while initial license and maintenance fees can sometimes appear
lower, these generic solutions can often result in increased costs due to
extensive customization requirements, upgrades, ongoing maintenance, and longer
system deployment timeframes; reducing and delaying your overall return on
investment. Avoid choosing software that limits
your capabilities and your company’s growth. Your software should enhance your
business, not hinder it. The software you choose should have the specialized
capabilities necessary to address all of the business requirements of your
company and your industry, not just some of them. For an industry tailored
solution, find a provider who offers specialized software for your industry and
therefore will be able to provide the most beneficial solution for your business
needs. Your solution should be specifically tailored for your business and
industry and your provider should know your industry as well as you do;
enabling them to make recommendations. By choosing an ERP software solution
that is specialized for your industry, you will be able to get a specific
targeted solution to meet your unique business needs. The right solution will
deliver improved efficiencies, reduced costs, enhanced revenues and
profitability, and faster ROI. 3. Not Choosing the Most Qualified ERP Software Vendor When shopping for ERP software,
choosing the right vendor can make the difference between a successful
implementation and ending up with one that falls short on satisfying your
business needs. One of the most common mistakes in vendor selection is choosing
an ERP software vendor who doesn’t know your business. Decision makers are
often under the misconception that choosing software by a “big name” provider
will equal a big return on investment (ROI). However, most big name providers are
often too big to offer specialized industry knowledge for any specific
industry. Avoid putting yourself in a situation where you have to teach your
ERP software partner your business. Choosing a partner who already has an
in-depth understanding of your industry will help you achieve more rapid
deployment, be more cost effective, and be more efficient with the use of your
ERP software solution. In many cases, resellers will have to learn your
business and then retrofit a customized solution to meet your specific needs,
which ultimately costs you more money. Find a partner who is using best
practices, not just generic business process flows, in your industry. Avoid vendors who are not in sync
with where your industry is going. Instead, look for a partner who both knows
your industry and knows where your industry’s future is headed. Your vendor
should be very knowledgeable with new industry standards and incorporate
related processes into their standard ERP software solution to handle these
requirements, such as RFID. This will save you money by eliminating the need to
customize your solution to fit standardized industry requirements.
Additionally, the vendor you choose for your ERP software should ensure that
solution licenses are all encompassing for any unique and necessary modules,
such as EDI, RFID, and chargeback management. Plan on having a long-term
relationship with your ERP software partner. Be leery of vendors who want to
implement your system and run; you want the vendor to grow with you so you can
continue to grow your business. Responsive product support, ongoing product
releases, and user forums such as on-line bulletin boards and user conferences
are all essential business tools and services that your vendor should offer if
they are looking to build lasting relationships. 4. Not Giving ERP Software Implementation the Attention It
Needs A common problem during ERP software
implementation is the lack of a committed Project Manager on the customer’s
part. The majority of successful implementations occur when the customer’s
Project Manager dedicates 80-90% of their time to the implementation project.
The role of the Project Manager is to streamline the process and keep things in
check. When you’re investing your money and time into implementing a system
that will enhance the performance of your business, isn’t it worth dedicating
someone to making sure it’s done right? Lack of commitment and support from
the top is another area where companies fall short. The President or other top
executive of the company should be involved. This does not by any means refer
to them leading the day-to-day activities of the project, that’s what the
dedicated Project Manager is for, but more so to their being involved in status
meetings. A solid commitment from the top will flow through the organization to
make implementation of your new ERP software a success. Not documenting your business process
flows when implementation is complete is another common ERP software mistake.
The most successful transition can be achieved when there is written
documentation for each department. This enables the company to continue to
conduct business at its maximum potential during transition and learning. And,
in the event that an employee leaves or changes positions within the company,
the next person stepping into the position can learn the job more quickly and
do the job more efficiently if there’s documentation at hand that serves as
instant training. Don’t assume that your employees’
training needs have been met by combining the implementation with the initial
training provided by the vendor. This is another common misconception that can
lead to failure of your new ERP software solution. It is imperative that
employees continue to receive training after the software has been implemented,
even with documentation that helps support employee training. Once the new
system is live, users should have continued follow up training, whether it be
every 4, 6, or even 8 months. This will enable your company to identify any
implementation areas that may not have been needed at the time of deployment,
but which have become necessary later on. Proper and thorough testing is
another common oversight when implementing ERP software. It is necessary to
perform “a day in the life” test where users from each department of your
organization do their job using real data. Walking through the complete process
with a pseudo-real order while still in testing will allow you and your users
to identify any errors or misunderstanding in the process flows before live
deployment. In many cases, problems will be discovered during this testing
process that may require some minor modifications before going live. In order
to minimize errors after deployment and maximize the potential of your new ERP
software, it is crucial to test all of your data, procedures and processes
before launch. 5. Not Investing in ERP Software for the Long-Term When choosing ERP software, be
realistic about your expectations and perceptions of cost - you’re making an
investment to improve or enhance your business. So, while hard dollars spent
are important, the key is choosing the right ERP software and the right partner
who will provide you with a fast and effective implementation, high ROI, and
low TCO after implementation. While human nature tends to lead us down the path
to the bargain deal - we often do this at home, not just at work - with ERP
software, what appears to be the lowest cost solution often results in the
greatest long term cost. When securing proposals, if you find a vendor’s quote
to be far below that of other vendors you are considering, chances are the deal
is too good to be true. |