Selection of right ERP holds key to success
HOW to select the ERP brand perhaps become difficult today. Most of the time budget was the main criteria for elimination round and then companies used to see the live customer list of ERP vendor. We can very well say that the ERP buying decision is like any other procurement decision.
For example, when a buyer purchases bearing, normally he analyzes quality, cost, service and response time to choose the particular vendor. All these parameters were applied in ERP buying also. In fact, a few ERP vendors have come up with industry specific solutions, which, in the true sense, Is more of a marketing strategy than an operations specificity. Secondly, because of the very competitive environment and market saturation, ERP vendors have decreased their prices and hence the SME segment is also aspiring for such world-class solutions.
While selecting the ERP brand, the focus should be the availability of the best practices or the world-class practices in the software. If we examine closely, we find various ERP products are strong in various functional modules. This strength could be in terms of availability of various planning opinions, tight control on orphan processes, excellent functions flow, easy and user-friendly reporting, graphical presentation, automatic routing through world-class valued added processes.
The problem is how to know which ERP is strong where and how that will synergize the client's business results. To solve the first question, to some extent, we can refer literature in the form of reports and articles. The commercial presentation of the ERP vendor and later discussions may help further. The commercial presentation of ERP vendor and later discussions may help further. The main question is which strength one should look for. This problem has to be handled with a detailed case study of the organization. From the strategic point of view, the organization has to understand the vital processes for the revenue impact as well as the bottomline. Thus efforts should be directed to find the thrust area with proper reasoning. Accordingly, one can match the requirement with the strengths of ERP to proceed further. It is also observed that some clients go for multiple ERP products to get equipped with all the strengths available.
ERP packages have different architectures, concepts and sets of functionality and they are designed to address a variety of user requirement. The marketing literature from ERP vendors will no doubt give the impression that their tool is just as good as any other. Such literature is valuable for giving the reader an overview of functionality and a glimpse at the differentiator for that vendor's offering. But, if you compare the literature or listen to a vendor's presentation, it would be very difficult to evaluate which package is the best or which would be most suitable for your organization.
So if you go by what is written in the product brochure or what the salespeople say, you will find it very difficult to make a decision and might end up with the wrong choice. So package selection is something that should be done on a systematic and scientific manner.
While studying the history of ERP packages and finds out how each package evolved, it becomes evident that every ERP package grew out of the experience or opportunity of a group of people working in a specific business who created systems that could deal with certain business segments. It is generally accepted that most ERP packages are stronger in certain areas than in others and each one is trying hard to add functionality in areas where they have been lacking.
So after the decision to go for an ERP package is taken, the company needs to develop the selection criteria that will permit evaluation of all the available packages on the same scale. To choose the best system, the company should identify the system that meets the business needs, matches the business profile and identifies with the business practices of the company. It is impossible to get a system that will perform, exactly as the company does business, but the aim should be to get the system that has the least number of differences.
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An effective ERP system gives the solid foundation to the supply chain which enables information; material and money
Organizations must realize that after the implementation of an effective ERP system all of its process becomes more efficient.
THE latest reports shows that majority of the midsize organizations are using ERP to support a variety of business issues.
We can very well say that the ERP buying decision is like any other procurement decision.