Selecting the Right ERP Software

This morning I replied to a business professional that wants details on the features of Dynamics software. His firm is looking to purchase a new ERP system, and so he is looking for information to help him make the best decision. Well, his motives are good, but his approach is not so good.

Today's ERP solutions are broad spectrum products with a variety of modules useful in different industries. For example, while GL, AR and AP are all that is needed in most professional offices, and the Microsoft Dynamics products have good modules for this, the software products also have sales order processing, inventory management, manufacturing modules, project accounting modules, field service, et cetera. These additional modules enhance the abilities of the product but may not provide any value to a shopper.

To wade through all of the features of the maufacturing modules, for example, can confuse someone that is only looking for GL, AR and AP. Asking a broad spectrum question can provide TMI (Too Much Information).

The first thing a firm shopping for new ERP software needs to do is to make a list of the features they need. Once this list is compiled and complete, it can be submitted to various vendors who can respond and show the firm if and how their specific ERP product can address the requirements.

The list of requirements needs to include several groups of information...

Functions and Features

One of the most important list of requirements is the functions and features your firm requires in the software. Some products, for example, have basic invoicing while others have invoicing tied to inventory management. Some products have manufacturing, but can the manufacturing module handle batch operations or simply discrete?

Start by making a list of basic features: GL, Receivables, Payables, Project Accounting, Purchase Orders, et ecetera. Then ask the individuals in each department to make a list of the features they need to do their jobs correctly.

Now, some people will get carried away and list hundreds of things they would like in a package, but those are functions that are not necessarily requirements. Once the list of functions is compiled (and you might get lists from several different people for the same module), circulate the complete list back through the group and ask each person to rank the importance of the features. Use a scale like 1 to 5 where 5's MUST be included and 1's could be left out. Average the responses from each contributor and you have a list of the most important features down to "things people would like to have."

Envirionment

You need to inform vendors about the environment in which your new software needs to work. For example, are you planning to deploy into the cloud or simply use the product in-house? Do you need the ability to dial-in remotely and how many people need to do this?

If the software needs to interface with other products from other vendors, make sure to specify the product and the level of integration needed. For example, radio and TV stations have special software that schedule playlists of songs and advertisements. These products sometimes bill and need to pass the receivable to the accounting product while others need to pass information for invoicing to the accounting software.

Vendor and Software Support Options

ERP software is much more sophisticated than some of the over-the-counter accounting products that can be purchased in the mall or local computer store. Getting an ERP package installed properly requires a vendor that can support your business and help you get the product implemented.

Some vendors have expertise in manufacturing while others do not. Some are great with project accounting while other are not. Larger vendors will have consultants with different skills and may be able to support many different types of businesses.

Talk to the vendors. Ask them if they have the expertise to support your implementation. Some will have these skills on staff while others can bring in specialists. Don't be afraid of specialists. They typically will not work for a partner that cannot provide basic support after the implementation and call them when they are needed.

Talk to your vendor about the software product's future growth plan. Make sure the product plans to be around for the next 5-10 years. It will cost more to implement most ERP packages than the software costs and you don't want to be forced into making that investment every 3-4 years.

In Summary

Identify your needs and pre-define the questions you need your ERP vendors to answer for you. Do not be afraid to ask any questions that apply to your needs. After all, it is your business and you do not want to make an expensive mistake.

-- Richard L. Whaley, Senior Business Consultant, Author, Publisher; Accolade Publications, Inc. Notable books by Author Richard L. Whaley published by Accolade Publications, Inc., include: Confessions of a Dynamics GP Consultant (with Author Leslie Vail); Information Flow and Posting for Dynamics GP; The Dynamics GP Power User Handbook; and Creating Reports with SSRS.

• < Prev
• Next >