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.
Unless your needs are very narrow, expect to experience a significantly lower total cost of ownership (TCO) with fully integrated ERP software in comparison to best-of-breed solutions. Using separate best-of-breed solutions can often drastically increase your overall license and implementation costs, not to mention reduce overall operating efficiencies. With a best-of-breed solution, you may not be protected from version obsolescence, which can result in additional investment later on. Additionally, support of your operations can be hindered as you manage problems across multiple vendors.
The best fit for many small to mid-sized companies is often fully integrated ERP software. However, the solution needs to fit most, if not all, of your key business requirements no small task for a single application. To overcome this obstacle, choose a partner with industry specialization who can help to ensure that your most critical business requirements are met.
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.
Avoid choosing software that limits your capabilities and your company s growth. Your software should enhance your business, not hinder it. The software you choose should have the specialized capabilities necessary to address all of the business requirements of your company and your industry, not just some of them. By choosing an ERP software solution that is specialized for your industry, you will be able to get a specific targeted solution to meet your unique business needs. The right solution will deliver improved efficiencies, reduced costs, enhanced revenues and profitability, and faster ROI. 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.
Avoid vendors who are not in sync with where your industry is going. Your vendor should be very knowledgeable with new industry standards and incorporate related processes into their standard ERP software solution to handle these requirements, such as RFID. This will save you money by eliminating the need to customize your solution to fit standardized industry requirements. Additionally, the vendor you choose for your ERP software should ensure that solution licenses are all encompassing for any unique and necessary modules, such as EDI, RFID, and chargeback management.
Plan on having a long-term relationship with your ERP software partner. Be leery of vendors who want to implement your system and run; you want the vendor to grow with you so you can continue to grow your business. 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.
Lack of commitment and support from the top is another area where companies fall short. A solid commitment from the top will flow through the organization to make implementation of your new ERP software a success.
Reluctance within the customer s business functions to accept and explore change is another common mistake that can threaten successful implementation of an ERP software system. When the company is willing to change its business processes and embrace new ideas and concepts, it is more likely to have a successful implementation and experience the long term benefits of a new system.
Not documenting your business process flows when implementation is complete is another common ERP software mistake. The most successful transition can be achieved when there is written documentation for each department. This enables the company to continue to conduct business at its maximum potential during transition and learning.
Don t assume that your employees training needs have been met by combining the implementation with the initial training provided by the vendor. This is another common misconception that can lead to failure of your new ERP software solution. It is imperative that employees continue to receive training after the software has been implemented, even with documentation that helps support employee training.
Proper and thorough testing is another common oversight when implementing ERP software. It is necessary to perform a day in the life test where users from each department of your organization do their job using real data. Walking through the complete process with a pseudo-real order while still in testing will allow you and your users to identify any errors or misunderstanding in the process flows before live deployment. 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.
Many bargain systems also provide very rigid solutions, making it difficult for you to meet the unique needs of your customers and business. In order to achieve the flexibility you need to make bargain ERP software work efficiently for you, you may need to reinvest additional money toward upgrading, or in some cases replacing, your system later thereby reducing or eliminating all together any savings that you might have originally experienced.
Use your intuition and good business judgment when comparing provider costs. Look for applications that support your ability to achieve your company s primary strategic goals. Work within your budget, but make sure you know what you re getting up front and anticipate with your ERP software provider when you can expect to start seeing a return on your investment. About the Author Founded in 1984, and with offices in North America and China, Apprise Software, Inc. is a leading provider of enterprise-wide ERP software solutions for mid-sized consumer goods distributors. Leveraging the latest technologies such as Microsoft .NET, wireless warehouse solutions, and RFID along with industry best practices, Apprise Software provides consumer goods distributors with global solutions that meet their unique business requirements while delivering reduced costs, improved efficiencies, enhanced revenues and profitability, and a quick return on investment. For more information about Apprise Software, Inc. please visit http://www.apprise.com.
Apprise Software, Inc. 745 US Highway 202-206 Bridgewater, NJ 08807 1-908-725-6000 articles@apprise.com http://www.apprise.com
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