What must be checked when evaluating ERP software?
Selecting the right Enterprise Resource Planning (ERP) system for your business is mission critical. You need to select ERP software that is capable of effectively managing your business processes, handling your accounting processes, and supporting your data requirements. And, because most companies run their ERP software for 10 to 20 years, it is vital that you assess the software’s ability to meet your short-term need as and your future needs.
The key is to use an evaluation methodology that covers your company’s needs across the 6 Dimensions of Vendor Fit. Each of these dimensions, as described below, is a category of multiple requirements that the decision-making body should analyze.
1. Vendor viability and stability
Examine the vendor’s financial strength and analyze any corporate risks or concerns related to solvency, merger or acquisition activity, executive stability, and clarity of vision. Conduct a financial review by analyzing vendor financial statements and credit agency rating reports.
2. Software development roadmap
Ideally, your ERP vendor should address both your current and future requirements. Do they support markets that you are expanding to or new business models? Is their technology roadmap aligned with your own innovation plans? Assess the vendor’s research and development (R&D) investments and product development roadmap relative to your company’s plans.
3. Functionality
The purpose of this dimension of analysis is to assess how well the system can support your business’ administrative and operational functional needs. How well does the software support your business process and data requirements? Can it support your sales pricing models? Your inventory management processes? Your revenue recognition accounting needs?
4. Technology
It is important to assess the underlying technology. Is the system well-developed to minimize bugs and performance issues? Can functionality be extended to deliver last-mile enhancements? How well can the system be interfaced or integrated to other systems? In summary, you should assess a multitude of technical aspects relative to development, performance, workflow and automation, privacy, security, integration, disaster recovery, and provisioning and infrastructure needs.
5. Supportability
An ERP system is only as good as the available talent. How easy is it to acquire the talent you need to support implementation and internal staffing? How accessible are training and support?
6. User Experience
Even when all other criteria are met, the User Experience can make or break the successful adoption of a new ERP system. Will users be able to easily navigate the system? Access help? You should separately define criteria related to the user interface, navigation, help features, personalization, dashboards, analytics, search, and other self-service capabilities.
