Four Key Stages to Selecting ERP Software

Selecting new business software is a daunting task. It’s also a labour intensive one (if done correctly), though it will be time well spent as your business is likely to reap the benefits of new ERP for a decade, or more, to come. That said, failing to plan is akin to planning to fail so you’re best to prepare for your ERP selection by following these four key pre-purchase stages.

1) Appoint a Panel

Depending on which functionality you want to systemise, you will potentially appoint different people to your selection panel. In any case there should be at least one C-Level executive, if not two, who should become project sponsors. The CFO is typically always involved since finance is the “beating heart” of your ERP software. The buck stops with the finance department, so your Head of Finance must have confidence in the system. You may also like to have your Head of IT involved. The system integrity will be of utmost importance and your IT department should be heavily involved in the selection and potentially the implementation of your chosen ERP.

After this, you might consider bringing in a cross-department team of people based on the functionality you want to systemise. For example, if you are considering bringing customer relationship management (CRM) into the software fold, you will want someone from the sales team involved. If you are bringing your operations on-platform, you’ll want your Ops people involved. Interestingly, it might not always be the heads of departments you want to include in this instance, as “Heads Of” are not always the end users of the system. Both from a “user buy-in” perspective and from an “end user” perspective, someone senior on these teams who can lead those below might be the best choice for your selection panel.

2) Decide Upon Functionality

Not all ERP is equal.

Some will have better functionality than others. Some are better suited to certain industries than others. Some offer modules, whilst others offer a full suite of software. Take SAP ByD for example by comparison to NetSuite. With the former you buy all the software functionality regardless of how much you implement. The latter offers a modular approach so you can tailor your functionality to your budget and consume the software as you go. SAP ByD is less customisable and more “unyielding” which is great for sectors where compliance is of the utmost importance (such as manufacturing) but not so good for other types of business who might need more flexibility (such as a services business). NetSuite, on the other hand, was built for flexibility and the ability to integrate, configure and customise. To that end, if you are in a sector with more fluidity in terms of business process, this might be a good choice for you.

Once you know which functions you need to bring into your software system you can start to investigate the market and rule certain vendors out or in.

3) Determine the Key Project Facts – such as Budget and Timeline

Your budget might be determined by something like total cost of ownership over a specified period (usually five years or longer). Or it might be determined by your finance team based upon the anticipated ROI. You might be budgeting from your capital expenditure, or your operating expenditure. Either way, it is crucial that you decide upon your budget for the overall project.

Remember you will likely have ongoing annual subscriptions costs, as well as a one-off implementation price to pay for professional services. Your year 1 costs are likely to multiplied three-fold once all the upfront costs are considered, so make sure you factor this in.

You will also need to determine your timeline. Is this an urgent purchase? Is there some kind of compelling event, (a merger or acquisition, a move to new premises or a cash injection of funding) driving the decision?

Take a view on how much time you can dedicate to a project. Remember that your time will likely be increased by a factor of 2:1 in line with your implementation partner so make sure you are planning enough time and resource against the project to give yourself the best chance of success.

[CLICK HERE to read more about the upfront and recurring costs of software]

4) Go to Market to Select your Partner

Armed with the information above, the vendors you approach as part of your review process should be able to give you a clear steer on the features, and cost of their software and the time and budget required for implementation services. You can use this information to help make your shortlist since, as long as, you are not losing out on critical functionality, time and budget should be key drivers in your decision making.

Selecting the right vendor to work with is more of an art than a science. As with any purchase, big vendors don’t always make for the best choice. You might feel more at home with a smaller “boutique” partner whose values are aligned with yours, or whose culture gels with yours.

Your chosen partner should take time to understand your business and what is driving the project then give you advice on the best way to implement based upon your needs.

[CLICK HERE to learn more about what to expect during the software sales process]

Oracle NetSuite has helpfully compiled a list of useful questions to ask yourself and your chosen software partner. You can access it here

CloudTamers has been implementing NetSuite in the UK since 2008. With over 60+ implementations under our belts, we know our software-onions! To find out more about how CloudTamers or NetSuite can help your business become more streamlined and more profitable, get in touch.

Written by Emma Stewart – Sales & Marketing Director at CloudTamers Ltd

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