Answers to Frequent ERP Questions
There’s no shortage of enterprise resource planning (ERP) solutions out there, and that makes selecting the right system for your business a daunting task. Companies struggle to start their ERP search as they get lost in the confusing jargon and acronyms of the tech world.
Fortunately, all your questions can be answered by expert ERP consultants. Today, we provide our answers to five of the most common questions about ERP software.
1. Does my business need ERP?
If you’ve started your ERP research, you’ve probably come across two conflicting narratives: The ERP success stories that praise the value of digital transformation and the ERP failure stories which detail all the money lost to poor implementations. Truthfully, ERP implementations don’t always result in success. Choosing the wrong vendor, undergoing projects without following best practices and turning down the support of expert consultants are all pathways to ERP failure. However, when your operations are outdated or slow, you’re also looking at a recipe for business failure. Implementing modern technology is a must for improving operations and competing in the global marketplace.
Any business experiencing major delays or limited access to data should seriously consider an ERP implementation. Many companies rely on disjointed systems, spreadsheets, QuickBooks and other outdated methods to organize critical data. These platforms can’t process large datasets or support growth. ERP software offers a central hub of data to make information accessible. Additionally, ERP automates processes, reducing manual data entries and dramatically speeding up operations. These enhancements improve responsiveness and decision making.
Don’t think ERP is just for large enterprises. As we’ll touch on later, cloud computing is making ERP accessible for companies of every size. Bottom line: When you take a careful approach to your ERP implementation, success is right around the corner.
2. How do I select a vendor?
Don’t think the ERP vendor selection process will be nothing more than a quick Google search. Choosing the right platform is key to getting a solution that fits your specific business and user needs. First, put together a selection team that best represents your company. That means there will be key stakeholders from various departments to assure the system supports tasks and roles throughout the enterprise. Also include the C-Suite, so your executives stay informed throughout the process.
Once you have the ideal team, start nailing down your requirements for your new system. What are current problems you’re experiencing that you would like the ERP software to solve? What are key business processes that need to be supported? After you’ve prioritized your needs, start looking up potential ERP vendors. Find solutions built specifically for your industry, and begin talking to sales reps to learn more about your options. You should also read reviews and try to speak to current users of the system to gain different perspectives.
When you’ve narrowed down your ERP vendors, make appointments for in-person demonstrations. It can be easy to lose track of what’s happened at every demo, so create scorecards to mark the technical and functional performance of each solution. Create a demo script that shows which modules and tasks you’d like to see, and provide some sample data that can be used. These demos offer the best way to analyze how different vendors support your unique processes in real time. Though this may sound like a lot of steps, the ERP selection process is key to your business success. If you take the time to make the right choice, you’ll save your business a lot of time and money in the future.
Every business is going to have different requirements from their ERP software and implementation process. Your company size, number of users, business complexity, required configurations and customizations and deployment method will all contribute to the price tag. That means that each business will have to speak with sales reps about the details of their company and ERP requirements to determine the cost. Plus, you can’t forget that the total cost of ownership (TCO) goes beyond the initial implementation cost to include infrastructure costs, license fees, ongoing maintenance and more.
However, these numbers shouldn’t deter organizations from new software. Businesses that shy away from ERP after finding out how much it could cost them aren’t seeing the full picture. When implemented and utilized correctly, ERP will save you far more than it costs. Process automation speeds up operations and increases accuracy. Data analytics provides sophisticated insight into the past, present and future of your business to help you make the best decisions. Critical information is secure but also easily accessible to end users in a central hub, powering transparency and collaboration. An array of robust ERP modules and tools work together to make users more responsive to their customers, maintain data integrity and streamline processes.
All of this translates to substantial ROI, making your ERP well worth the cost. Epicor, for example, delivered 264% ROI to the composite manufacturer according to a Forrester study. But just to be sure, work with your finance department to calculate projected ROI. If your calculations aren’t adding up to the ROI you want to see, seek another vendor or reconsider your planned customizations.
4. What is the difference between cloud and on-premises?
Anyone looking to implement an ERP instance needs to make the decision between deploying their software in the cloud or on-premises. An on-premises (or on-site) solution is installed on the hard drive of the organization using the software. Cloud-deployed solutions, in contrast, store data and programs over the internet; servers are managed by the cloud provider. Though some consider on-premises deployment the safer option because data is stored on site, various reports have found that this is not necessarily the case.
As a general rule, hosting your ERP in the cloud is your best bet for software success. Increasingly, cloud ERP is becoming the go-to enterprise solution, primarily because of its ease and affordability. On-site solutions require hefty hardware and maintenance costs. Cloud systems have a low upfront cost, and though they often require monthly fees, the fees cover the cost of updates and support. The TCO, therefore, is substantially lower for cloud software. Additionally, cloud implementations and updates occur quickly and easily, unlike on-premises projects which can take several months.
Because of the ease and cost, cloud hosting is in most cases a must for first-time ERP implementations and small to mid-size companies. However, for large companies that want (and can afford) full control over their ERP software or already have an array of on-site solutions, on-premises could be the way to go.
5. What ERP features should I look for?
The answer to this question depends a lot on your industry and specific business needs. Take discrete manufacturing for example. Epicor ERP offers modules and tools that support various manufacturing verticals and processes, from automotive manufacturing and metalforming to MTS and CTO methods. Epicor cohesively connects supply chain management, financial management, inventory management and more suites and modules into one comprehensive manufacturing solution.
Though businesses have different requirements from ERP solutions, flexibility and scalability are always necessities. Your company will likely need customizations and configurations to make the software align with specific processes. Additionally, as your business grows, your ERP will require modifications to support your changing needs. Find an agile ERP solution that can be molded to fit your unique processes and provide optimal usability.
Have more ERP questions? Nobody has better answers than the consultants at Datix. Datix is an Epicor Gold Partner that has provided manufacturing and distribution software solutions for over 20 years. With ERP, CRM, eCommerce, integration solutions and much more under one roof, we’re committed to transforming your business through software.
Let Datix guide you throughout your enterprise software journey—contact our experts today!