How to Ensure Your Next ERP System Supports Your Business Needs?

Enterprise Resource Planning (ERP) systems form the backbone of modern businesses. Today’s business environment has been severely affected by disruptions in supply chain as well as other traditional business operations due to employees working from home in the pandemic. For this reason, ERP integration -in light of the agility and honed business processes that it provides- has helped companies not only survive but thrive in the competitive market. 

Therefore, selecting the right ERP software system is a major decision that requires thorough planning and research, considering how complex the decision can be due to the risk of unnecessary costs, incomplete requirements gathering, employee bias, generic vendor demos, overall interruptions within business productivity, etc.

Here are some tips on selecting the right ERP system for your enterprise’s database management and successfully avoid these problems: 

1. Business Process Review (BPR)

The foremost task that a business should undertake for ERP software selection is a Business Process Review (BPR) and Needs Assessment Analysis (NAA). This can be done by your in-house IT team or by engaging a professional services firm, and will help determine the requirements for specific business and end-user aspects. 

Some of its primary benefits include: 

• Allows you to create and share with your vendor a solution presentation relevant to your business, removing the need of generic software demo

• Determine hard and soft costs to your business by calculating the financial impact of each business process 

• Adds convenience to determining ROI based on the amount of effort to address and cover the inefficiencies and gaps within your current system 

Some other generic benefits include:

• Increased Efficiency

• Alerts and Reports on Requirements at Key Stages of Workflow

• Reduced Overhead Costs

2. Identify the Right ERP Technology Platform 

With varied options in ERP solutions, choosing the most suitable one for your business becomes a complex task. Although technology platforms are an integral part of ERP software, each offering has its pros and cons. From cloud-based to on-premise to managed services, evaluating the ERP system that best suits your enterprise is crucial for proper selection. 

• With the advent of innovative software companies such as Oracle and their services of efficient big data solutions, such as Oracle Cloud Infrastructure and SOA Suite, cloud-based ERP systems have become more popular in modern business cultures.

• The outsourcing of servers and backups is done by employing the Managed Services option of ERP. Based on a rental model, it tends to be utilized by larger companies to monitor and regulate capital costs. 

• The traditional method of purchasing the ERP system for it to be installed on company-owned servers is known as the On-Premise ERP solution. 

Although the IT department is responsible for the smooth functioning of all business processes, that doesn’t imply that the ERP system operates in a vacuum. The importance of understanding how well the new ERP system will be able to integrate with the rest of the IT infrastructure is emphasized due to the number of various elements that ERP applications interacts with, such as databases, SaaS apps, legacy applications as well as industry specific apps such as quality management in the manufacturing process. 

3. Analyze Total Cost of Ownership

Depending on the changes in the business environment, a period of five to seven years is usually meant to mark the time for reassessing ERP requirements for most companies.

That’s not to say that it stands true for all companies, as some go on to maintain the same ERP system for even a decade or more. Therefore, understanding the Total Cost of Ownership (or TCO) is quite an important factor in the decision of selecting an ERP system. 

With several ERP software publishers offering subscription-based price models, the total future costs stand a chance of increasing sufficiently, despite the total initial investment being much lower. Accordingly, you need to determine the TCO for over 5, 7 and 10 years under a subscription pricing model, and compare it to other pricing models such as leasing.

4. Identify Potential Benefits 

Assess the primary functional areas of your company to determine the impact an ERP system will have on all stakeholders (from customers to vendors and employees). This should thereby be done in a quantitative, qualitative and financial manner to truly grasp the measurable benefits. It is recommended to perform an NAA for validating and confirming the investment that is needed to maximize a return.  

5. Train Your Employees

Since employees have a thorough understanding of the requirements of performing daily tasks and responsibilities smoothly, it becomes necessary to not underestimate their role in the decision making process when it comes to picking a new ERP system as it will inevitably have a deep impact on your personnel. Empowering them in the selection process will assist in achieving the commitment needed during the implementation process to attain success. 

Similarly, your employees need to be accordingly trained after completing the process of implementing and testing the new ERP system. This can be done by hiring a team of experts that can provide the necessary on-site training so that your employees can use the new system efficiently and effectively.

After the ERP system has been implemented and tested, you need to train your employees so they are able to use the new system efficiently and effectively. You should hire a team of experts to provide the necessary on-site ERP employee training and help all your employees fully understand and become proficient with the software. Your IT team should definitely be provided with more extensive training so that they are able to handle any technical issues that may occur in the future.

6. Selecting the Right Partner
   
   Engaging a professional service firm which specializes in the ERP system which best fits your company will help expedite the implementation of the solution. You will need to determine the services and expertise offered by the business partner beyond the ERP system since many technologies impact your entire IT infrastructure. You should partner with a professional service firms which offers a one stop shop approach which includes CRM solutions, Enterprise Content Management, Infrastructure solutions, and Web solutions to name a few. The professional service firm can help you determine the best platforms across multiple offerings which best supports the ERP system you selected and can work directly with vendors and publishers on your behalf when needed.

7. Conduct a Demo

Many organizations go through the entire vendor selection process and then bring the winning bidder in to conduct a demo that shows employees what the new system will look like. A better approach is to bring in a vendor or two to perform a demo at the beginning of the process, so that employees can envision the possibilities of the new system when there’s still an opportunity for feedback and, from a political perspective, it doesn’t come across as a fait accompli that is being forced on employees without advance notification.

 

Conclusion

Selecting a new ERP software for your company can be a daunting and time consuming task. By partnering with a professional service firm like Tangenz, a trusted Oracle partner, that has industry experience and knowledge in Oracle ERP Cloud system, you’ll minimize the impact of your company and employees while maximizing efficiency gains and return on investment.