Think Ahead When Considering an ERP Solution

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While enterprise resource planning (ERP) systems are at the core of a company’s financial, human resources, supply chain and manufacturing systems, if they are not integrated correctly or their functionality is not fully leveraged, they can easily reduce efficiencies and impede day-to-day business operations – in other words, defeat the purpose for which the system was originally designed and integrated. For companies to derive true value from ERP systems means that those considering a new ERP system, must carefully evaluate and consider the system's requirements according to the needs of the whole organization — from project management to sales to human resources to manufacturing and distribution — in addition to assessing the technology, functionality, and reference lists.

When companies are initially established, they often use simple financial and process systems that typically combine paper documents with electronic spreadsheets. As the organization grows, firms ordinarily purchase off-the-shelf software that includes options for managing payroll, accounting, and possibly asset management. Most companies quickly outgrow these basic packages, and like Alice tumbling down the rabbit hole, suddenly discover that they’re saddled with a jumbled mixture of data and processes managed by a tangle of file cabinets, electronic spreadsheets, and a single, centralized, but disconnected, general ledger system. The single unifying integration point is informal e-mails used to pass around spreadsheets and random orders, inquiries, and reports.

At this point, most organizations recognize that this disconnected infrastructure inhibits growth and causes costs to spiral out-of-control, and they consider implementing an ERP system. Those companies transitioning to an ERP system for the first time is often the catalyst for rapid growth and improved profits. The key to making this transition successful is for companies to carefully consider various ERP options and how their capabilities map back to the needs of the organization. With the hundreds of ERP systems available today, companies have only a single chance to make the right decision—the wrong decision can potentially sink them. During the selection process, companies should carefully consider these additional factors in addition to checking a systems features and functionality:

Vendor Strength
ERP software providers need financial and human resource functionality to not only support current releases but also to invest in new technologies and capabilities through research and development, craft new releases and develop next generation products.

Partner Strength
Even though many ERP solutions are robust with extensive features and capabilities, no ERP vendor can do everything. Take a close look at their partner ecosystem from resellers and system implementers to independent software/solution vendors and process/business consultants. The strength of this ecosystem is a good indicator of the independent commitment to the ERP solution since partners have to make their own judgments about the value and viability of a particular software package.

Integration Approach
Other software can compliment ERP solutions. Understanding how an ERP solution integrates to a diverse range of products not only helps mid-sized firms with current infrastructure needs but also provides insight into how a vendor is looking forward to address application directions. A vendor may also provide some of these complimentary solutions; this strengthens consideration of its ERP package.

Industry Capability
Some industries need specific functionality to supplement core ERP capabilities. Awareness of how an ERP vendor addresses your industry’s specific needs is crucial.

Globalization Capability
Even if a mid-sized business is not competing globally today, it is comforting to know an ERP system has language and country localization capabilities with dedicated resources working to stay current. If a business expands beyond its borders, an ERP solution in place with globalization features simplifies international expansion.

Technology Pace
Even when economies struggle, technology moves forward. Since ERP systems were first rolled out, computing has evolved from mainframes to client-server to the Web. Mid-sized businesses need an ERP vendor with a track record of aggressively embracing new technologies with pathways for moving customers forward.

Technology Choice
Mid-sized businesses need flexibility not only in their daily operations, but also in meeting their technology needs. ERP vendors should support a broad range of platforms, so any mid-sized firm can optimize its infrastructure selection.

Ownership Costs
Understanding the total cost of ownership, from initial deployment to ongoing maintenance, training, staffing, and hardware needs, helps mid-sized firms make a cost-effective selection decision.

User Organization
Strong, functioning independent user groups are important for an ERP product line’s health and future. With user groups, customers provide a collective voice to a vendor, which helps drive product futures and improvements to current code.

Choosing an ERP system is a great opportunity for any mid-sized company to deploy a new platform for growth and success. Mid-sized firms need to make their ERP selection with careful consideration, taking into account where they are today, where they want to be in the future, and the changing technology landscape. A well-developed ERP decision brings enormous opportunity to any mid-sized business interested in growth and profitability, regardless of location and industry.

by Green Beacon Solutions, Vermont Microsoft Dynamics GP Partner

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