ERP Evaluation Tips – 10 Questions You Need To Ask

Your enterprise resource planning (ERP) solution is a strategic asset to your organization. Your ERP system should not only enable your employees to make better decisions, work more efficiently, and reduce costs, but it should also enable you to plan and manage long-term profitable growth. Choosing your new solution, such as Microsoft Dynamics, wisely is imperative to your future success.

To help you with your ERP evaluation process, we’ve put together 10 questions you should be asking in order for you to make the best solution selection. In this blog post, we will feature the first 4 questions.

1.  Does the ERP solution go beyond simple accounting? Many solutions offer deep financial reporting, inventory management, and budgeting capabilities. However, does the solution offer a unified solution that goes beyond basic ERP functions to deliver a complete and timely picture of your business? For example does the solution offer:

• integrated business intelligence (BI) and reporting tools
• collaboration and communication tools that span business processes
• anytime, anywhere access to enable increased employee productivity

2.  What are the strengths and weaknesses of each solution you are evaluating? The old cliché ‘better the devil you know’ can be applied to ERP also. Do the due diligence and take the time to research to find out how many customers the vendor has, how stable the company is, and if they have experience in your industry. Dig deeper and ask for product roadmaps, learn more about the breadth of offerings and how the system will grow and adapt as your business evolves.

3.  Does the solution offer ease of use? There’s a few different ways ease of use should be considered.

• The individual user experience – A good business management solution should be easy for your people to understand and use. This will eliminate extensive training time and costs and accelerate adoption.
• Applicability across the business – Benefits can be amplified when a business management solution extends to all parts of the operation. Consistent, end-to-end ease of use helps everyone communicate and collaborate better, meet deadlines, and make the best decisions.
• Seamless integration with other systems – An ERP system might be easy to use but the benefit can be lost if it isn’t compatible with other systems you use. Ensure the business management solution works with other systems and technology that your company already uses.

4.  Does the solution enable forward-looking insight? A business system that collects and maintains accurate historical information about your organization’s performance and financial results is helpful. A business management solution includes embedded BI and analytical tools that help you dissect your historical information and reassemble it in new ways is what will drive your business forward, quickly solve problems, and trim costs.

5.  Does the solution offer deployment flexibility? Running your ERP system in the cloud offers several benefits including low startup costs, easier deployment and shorter time to benefit. On-premise solutions offer the advantage of physical control over your data, greater flexibility to customize and easier integration to other software you may be running. Having a choice allows you to use the best deployment option for your organization – cloud, on-premise or a hybrid of the two.

6.  What is the Total Cost of Ownership? Whether you deploy on-premise or in the cloud, you need to think beyond the cost of just the software today. The true cost of ownership includes implementation, customization, management services, regular training, and hardware for an on-premise solution or additional bandwidth for cloud-based options.

7.  Does the solution reduce risk? Your business faces many different types of risk. Consider the following:

• Core business risk – Operating a business has many moving parts. The right solution helps you tend to business by providing integrated, end-to-end visibility across your operation; delivering timely, relevant information that keeps you on top of the details, and streamlining your business processes for peak performance.
• The risk of the unexpected – Unexpected developments like economic downturns or disruptive new technologies are a risk to your business. You need to spot and counter these risks. The right business solution delivers critical information and provides built-in business intelligence tools to help your team minimize the risks created by unanticipated events.
• Change-related risk – Sticking with your underperforming software or outdated legacy systems limits business potential. But moving to a new business management solution may involve risks of its own. How stable is the vendor? Will they be around for the long term? How user-friendly is their solution?

8.  Does the solution have a long-term technology vision? The investment in a new ERP solution is not short-term. You need to know that the vendor you partner with has a long-term vision for incorporating new technology and rolling out new releases. You want to know that they plan to continually improve interoperability and enhance the underlying technology platform.

9.  Does the solution support and drive growth? You’re in the market for a new business management solution because the tools you’re now using just aren’t suited for the growth you’re planning or already achieving. Avoid these headaches with a solution that supports and drives growth. Insist on:

• More control – If your growth strategy includes starting or acquiring new operations, you want a business solution that can be quickly and easily extended to include them. International operations? Look for a solution that supports multiple languages and currencies. And be sure to choose a solution that addresses all your business processes, from order entry to customer credit policies.
• Increased productivity – Make sure you can do more with less: add new business without comparable payroll increases. Actions like these improve productivity and the cash flow to fund growth.
• Deeper insight – Give your people, wherever they’re located, convenient, 24/7 access to accurate, consistent, timely information. This supports the collaborative, informed decisions that drive growth.

10.  Does the solution help you plan for your future? An ERP solution is a long term investment. You need a solution that is flexible enough to accommodate evolving business processes and new initiatives in your organization and is scalable enough to include additional users. You should be able to phase in new ERP functionality as you need it.

Purchasing a new ERP solution is a large undertaking. Hopefully you have found these questions useful in your evaluation process.