Study Finds Companies Struggle with ERP System Selection

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A great enterprise resource planning (ERP) system is like a great cup of coffee – not too expensive, well-balanced in flavor, tasty with no additions but also great with cream and sugar, and always fresh and hot.


Alright, so accounting software might not quite compare to coffee. However, for potential buyers there are almost as many options for ERP systems as there are choices of coffee in a big city. For a growing company, choosing and implementing a new ERP system is a crucial step towards healthy expansion. Although this is a common project for almost any business, the needs of each organization are unique. Is a company looking to integrate its CRM database with its sales data? Maybe a better tracking system is needed to follow inventory as it moves from procurement to distribution. Not only does a good ERP system need to fulfill many functions, it should work well with the particular users and resources of the company. In many smaller businesses, it is typical for the “Accounting Department” to consist of one or two individuals, each with their own skill set and technical background.   How can a company ensure that its particular employees will be able to effectively learn the new accounting software?


The process of choosing a new ERP system will be different for each company. It may be helpful to understand certain trends among those searching for a new business solution.  Software Advice, a company that specializes in offering expert guidance to help companies choose the right ERP software for their needs, released a study of 250 random companies that called for advice in choosing the best ERP system. Forrest Burnson, a market research associate at Software Advice, writes that “when selecting a solution, buyers should take into account not only their current needs, but what their needs will be five or ten years down the road, as well as whether they’ll be able to integrate existing and future data in the new system.” The outlook offered by the study may offer businesses a more quantitative perspective on these questions, as well as exposing what pitfalls they might face in choosing a new ERP system.


Certain findings of this study were unsurprising. For example, 59% of the companies cited improved integration as a reason for buying a new ERP system. Given that 44% of those in the study were currently using multiple systems to fulfill the different tasks of an ERP solution, this could be expected. It is revealing, however, that among current ERP users, more than half still listed improved integration as a reason for buying. New ERP shoppers beware: a system that claims to fulfill all your needs may not live up to its promises.


The study also asked potential buyers about their ideal timeframe for implementation. An impressive 77% of the companies wanted to completely implement a new solution within 6 months, and 41% wanted to implement within 3 months. Do these companies have a realistic timeline in place? Burnson writes, “for current ERP users, the process of data migration, customization and training can be extremely time-consuming. In fact, it may actually be more difficult for a firm with an ERP system already in place to switch to a new one than for another firm to implement an ERP system for the first time.” For many of these organizations, it may help them to consult a company that specializes in such business solutions, like The Resource Group, to get a more accurate idea of how long their switch might take.


Many buyers with current ERP systems had additional reasons for seeking a replacement.  Almost one quarter of the companies cited a lack of technical support for their current ERP system as a reason for wanting to implement a new one. In addition, 19% of the current ERP users said that they wanted a change because their current system was too expensive for their needs. Given the cost and resources needed to implement a new solution, issues with ongoing expenses and technical support could be deeply detrimental.


As this study shows, a company’s decision regarding a new ERP solution will have long-lasting impact on the organization. Unfortunately, it is not uncommon for businesses to become dissatisfied with their choice for a new system. Don’t let your company become bogged down in an overly long implementation, inadequate technical support, or an overpriced ERP system! Consult a business solutions firm like The Resource Group for guidance on selecting the best software for your organization.

by The Resource Group


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