Mistakes When Choosing ERP Software

CHOOSING ERP SOFTWARE -- The right Enterprise Resource Planning system can integrate key business functions, boosting the bottom line. The wrong ERP application can drain your IT budget. The difference between the two can be as simple as knowing which questions to ask as you research the options. Many companies are apprehensive when faced with the need for selecting ERP software. It is an important decision, critical to the company’s future performance, and most selection teams have little or no experience to draw on. Similar feelings accompany the need to select CRM software and when selecting accounting software or some other similar business-critical information system.


Selecting ERP systems takes time and effort, as does the implementation process. Be prepared to assign sufficient resources to the task. Map out your selection process, allocate the necessary resources, select the project team, and manage the project through to completion. Traditional project management processes—proven tools for managing a special task (as opposed to a continuing activity)—apply to a system selection and implementation project whether it is an ERP system project, selecting CRM, or another system selection and implementation task.


There are some mistakes when choosing erp software :

1.  Not Knowing What You Really Need in ERP Software

Before diving right into choosing a solution, take the time to understand what you really need. To begin with, determine whether you need fully integrated ERP software or best-of-breed software. This will often depend on the issues you are trying to solve or the opportunities you are trying to capture, as well as the size and structure of your company. For example, if you're a small to mid-sized company with limited budget and limited resources, then you'll probably want to consider a fully integrated ERP software system. This type of system will allow you to streamline your processes and achieve improved productivity at a lower cost and with fewer resources.

2. Not Recognizing the Uniqueness of Your Business

Every industry is unique. Lack of industry specialized capabilities within your software is a common cause of failure for an ERP software implementation. Often "horizontal" solutions that serve many different industries need to be significantly customized in order to fit your business model and to integrate with your other internal systems. Take caution that while initial license and maintenance fees can sometimes appear lower, these generic solutions can often result in increased costs due to extensive customization requirements, upgrades, ongoing maintenance, and longer system deployment timeframes; reducing and delaying your overall return on investment.

3.  Not Choosing the Most Qualified ERP Software Vendor

When shopping for ERP software, choosing the right vendor can make the difference between a successful implementation and ending up with one that falls short on satisfying your business needs. One of the most common mistakes in vendor selection is choosing an ERP software vendor who doesn't know your business. Decision makers are often under the misconception that choosing software by a "big name" provider will equal a big return on investment (ROI). However, most big name providers are often too big to offer specialized industry knowledge for any specific industry. Avoid putting yourself in a situation where you have to teach your ERP software partner your business.

Choosing a partner who already has an in-depth understanding of your industry will help you achieve more rapid deployment, be more cost effective, and be more efficient with the use of your ERP software solution. In many cases, resellers will have to learn your business and then retrofit a customized solution to meet your specific needs, which ultimately costs you more money. Find a partner who is using best practices, not just generic business process flows, in your industry.

4.  Not Giving ERP Software Implementation the Attention It Needs

A common problem during ERP software implementation is the lack of a committed Project Manager on the customer's part. The majority of successful implementations occur when the customer's Project Manager dedicates 80-90% of their time to the implementation project. The role of the Project Manager is to streamline the process and keep things in check. When you're investing your money and time into implementing a system that will enhance the performance of your business, isn't it worth dedicating someone to making sure it's done right?

Lack of commitment and support from the top is another area where companies fall short. The President or other top executive of the company should be involved. This does not by any means refer to them leading the day-to-day activities of the project, that's what the dedicated Project Manager is for, but more so to their being involved in status meetings. A solid commitment from the top will flow through the organization to make implementation of your new ERP software a success.

5.  Not Investing in ERP Software for the Long-Term
When choosing ERP software, be realistic about your expectations and perceptions of cost - you're making an investment to improve or enhance your business. So, while hard dollars spent are important, the key is choosing the right ERP software and the right partner who will provide you with a fast and effective implementation, high ROI, and low TCO after implementation.
While human nature tends to lead us down the path to the bargain deal - we often do this at home, not just at work - with ERP software, what appears to be the lowest cost solution often results in the greatest long term cost. When securing proposals, if you find a vendor's quote to be far below that of other vendors you are considering, chances are the deal is too good to be true.

Not all ERPs are created equal. A clue to a product’s relative strengths is its origin. Some ERP vendors began by developing manufacturing software; others entered the field via a robust human resources package, or a data warehouse solution. The Oracle Accelerate program leverages the company’s broad spectrum of world-class business applications to deliver a comprehensive, modular ERP package.(#Apprise).