ERP System Selection – Critical Ingredients for Systems Documentation

Selecting an ERP system is a daunting task. However, there is a recipe to ensure success when choosing a new ERP, or enterprise resource planning, software system. One of the critical ingredients in that recipe is system requirements.

When done correctly, documenting system requirements can provide many benefits. For example, it can maintain structure and objectivity within the project, as well as the visibility you need to maintain momentum and gain the sponsorship you need for project completion. It also can help you identify the scope of the new ERP system. In addition, proper systems documentation can help you identify any special needs that your organization is facing, as well as help you make sure that you realize the return on investment you're looking for in a new system.

So, what do system requirements look like? I tend to think of them as an outline, or a list of the functions that you want the new system to support. Some of these ERP system functions may include general ledger, accounts payable, accounts receivable, or fixed assets. Perhaps you have a fixed assets system already in place that you're kind of happy with, but you're not completely sure. I would recommend that you include it on the outline. The same thing goes for HR management and payroll, maybe you have a payroll service provider, but you're interested in seeing what it would look like to consolidate that function in a new ERP solution.

Once you’ve started the outline, the next thing you want to do is define the details for each function. For an example, let’s use inventory control. Let’s say you want a new ERP system that can handle multiple warehouse locations, or a solution that can accommodate FIFO costing versus average costing. These are examples of the line items you would put within those requirements.

Once you do that for each line item, it’s time to prioritize them. Assign a value, like "must have," "nice to have," or "of interest." Another way is to assign a numerical value from one to five.

When system requirements are done correctly, it's going to set the stage for evaluating vendors, software demonstrations, testing the new system, training your staff as well as onboarding new staff. It will also provide an audit trail that your auditors may be interested in seeing, especially when they learn that you've implemented a new ERP system.

Learn more about ERP system requirements by contacting a partner like The Resource Group.

by Gary Volland, The Resource Group