Things to look for while purchasing an ERP

Introduction:-

Enterprise Resource Planning (ERP) is a business management software that allows an organization to leverage a suite of integrated applications by streamlining and automating processes, creating a leaner, more accurate and an efficient operation along with providing complete visibility into core business processes. Think of an ERP system as the brain of your company's technology system. In the human body, the brain controls all areas of your body by telling them what to do and ensuring they all work together. The human body is unable to function without a brain & an organization cannot function without a proper ERP system.

First, we will discuss about assessing whether you are ready for an ERP or not? For the same, ask yourself following questions:

• Are you ready to invest that amount in ERP for which most of the benefits will arise in future?
• Do you have that technical staff, or is there need to hire some?
• Do you have all the Set-out policies & procedures in place which will guide the whole ERP?
• If you have multiple locations, are all the locations ready to accept the change?
• Changeover will give you multiple hiccups in terms of resistance from employees, running parallel system for some time, data migration, cut off procedures, etc.

If answers to all the answers above are affirmative, then only you can consider yourself ready for smooth implementation.

Now the Second step is:

Things to look for while Purchasing an ERP:

Whether it’s a new addition to your business or a legacy system that your business has grown or aged out of, harnessing an ERP tool can work wonders to integrate all parts of your business, automate business processes and streamline how work gets done. At the same time, purchasing an ERP tool is a daunting task. With all the variety in the marketplace and the level of change a new ERP has the potential to introduce; it can be difficult to know whether it’s the right strategic move and whether the time is right for a new ERP. To help you reach a decision, as summarized above, following are the things to be considered before going on an ERP purchasing journey:-

I. Flexibility and Coverage as per your business requirements:-

In today’s marketplace, there is a solution for everyone. The world’s most popular ERP providers now have variations of their products built specifically for different industries and business models, each with hosts of add-on modules, “configurable” to a degree that can create a bespoke solution meeting your specific business needs.

Long story short, in the world of ERP, there are many, many options, so it is always worthwhile to explore fully what is available and not get sucked in by solutions you’ve seen work for others, or the first solution you see can meet your business’ needs. Develop a clear and comprehensive list of your requirements for your ERP. Reach a solid consensus as to which requirements are absolutely “must have”. The next priority tier includes things that are not mandatory but there is general agreement that including them will benefit the company.

II. Involvement of end-user & cross-functional users throughout the implementation process:-

Transitioning to a new ERP is a tremendous opportunity for a business. It opens up the possibility to transform and modernize the way it operates (i.e. rethink how work gets done today in a digital world), making things monumentally easier for its employees across various channels. , it is vital to get all the business stakeholders, the end users into the same rooms & you will then be able to see what are the areas that are a challenge and which specific areas of the business need to be taken care of. Thus, the ERP system should be user-friendly & hence before embarking on an ERP purchasing journey, consider what it means for the people that will be most affected and make an effort from the very beginning to get everyone on board.

III. Security & Accessibility:-

Normally, it would be better if an ERP has the following features:-
a. Cloud based access:-
You can reduce your risk and hardware costs by moving your ERP to the cloud (24 * 7 access from any location). Embrace the future of information systems with a modern ERP hosted in a secure cloud. Moving your ERP applications to the cloud allows you to scale, extend and upgrade quickly. It also increases visibility and accessibility even further, taking full advantage of an ERP system’s capabilities.
b. Mobile responsive:-
ERP can be accessed from PC, Laptop, Mac book, Tablet or Mobile Phone.
c. Easy to Use:-
Intuitive user-interface gets users started with very little training.
d. Secure:-
In today’s era of technology, data integrity & confidentiality play a vital role & hence an ERP must contain a high-end encryption, role based-security along with Audit Trail.
Further, the ERP service providers themselves also should not have any access to the system after they have implemented an ERP for your organization.

IV. Gain a Professional Partner:-

When you upgrade to an ERP system, you also gain the partnership of your ERP implementation provider and all the support – from implementation and training to software support to community membership – that they have to offer. A quality consultant is a critical factor – after all. Partner with a consulting company that has long term customers. Every industry has its own set of challenges and every business is unique. By teaming up with an ERP supplier who specializes in your industry, providing an industry-specific solution (rather than a general solution), while embracing and accommodating your uniqueness, you are guaranteed to benefit from the experience and insights of a team of experts who speak your language and understand your business needs. This saves a great deal of time and effort, reduces the amount of customization, and results in a quicker, easier implementation.

V. Post-implementation Support, Education & Training:-

In order to maximize the benefits of your ERP investment, it is imperative to provide your team with adequate support and training. The typical workforce spans three generations, with varying degrees of technological comfort and rates of learning. One cannot expect true competency to be achieved through onsite training alone. Ongoing vendor support, as well as easy-to-access online training materials and tutorials, are essential to ensuring that your users are able to learn and adopt the new system at their own pace.
Also, ERP system should be effectively be able to be compliant with all the aspects of regulatory & other compliances which keep on getting amended frequently.

Vi. Preventing Application Erosion:-

General belief is that software loses its value over time – and quite often it does. However, the main reason for this, often has nothing to do with the application itself, but with its underutilization, due to staff churn or “forgetting” what is available. Your vendor should have the capacity to provide ongoing information on what is available, or coming in a future release; ERP audits; as well as refresher training to ensure that your ERP is continuously used to its full potential. Of course the system also needs to have the built-in agility to deal with various changes in your company and the market place. The only way to truly gauge the agility of an ERP system is by its own success over time, so opt for an ERP system with a strong track record.

Conclusion:

“As your business grows and changes, your system should make it easy to adapt,". Whether you're talking about a new country, new regulations, new product lines or new processes, an ERP system should make it seamless to grow your business. ERP selection and implementation processes are not for the faint of heart. Choosing the right Enterprise Resource Planning system can be complicated, and often there is a lot at stake. You want to make the best possible choice for your business & hence purchasing a good ERP system can help you achieve your goal to drastically change the way of functioning of your business.

If you wish you to know how your organization will benefit through implementing an ERP, you can reach us on the below mentioned mail IDs:-


CA Prashant Taparia
Partner | E-mail ID: prashant.taparia@masd.co.in

Poojan Joshi
Associate Consultant | E-mail ID: poojan.joshi@masd.co.in