If you’re seeking an Enterprise Resource Planning (ERP) solution for your organization, you’re making a smart move for many reasons. ERPs simplify running business operations—such as finance, customer demands, and inventory management—by centralizing them in one place.
About 95% of businesses using an ERP report substantial improvements in their operations post-implementation.¹ In fact, 28% of organizations achieved ROI within 12 months, and over 30% credit ERP solutions for enhancing their responsiveness to customer demands.
However, the harsh reality is that half of initial ERP implementations fail, often due to inadequate planning. You can avoid this by carefully picking the right vendor and partner.
ERP Evaluation Process: Choose the Right ERP Solution for Your Business
Here’s an evaluation process to help ease into the ERP system selection process, ensuring you make the right decision and avoid a failed implementation.
1. Be Sure of What Your Business Needs
Knowing your business needs is essential before starting the ERP selection process. Start by closely examining how things are currently running in your company. Think about every department—finance, HR, sales, inventory, etc. Which processes are working well? Where are the bottlenecks? Which tasks are still being done manually, and which could be automated? Understanding these details will help you determine what you need from an ERP system.
Next, think about what you want to achieve with the new system. Maybe you want to improve your financial tracking, make managing inventory easier, or gain better insights into customer behavior. Write down these goals and rank them in order of importance. Finally, involve people from different parts of your business in this process. Their input is crucial because they’ll use the system daily.
By the end of this step, you should have a clear, documented list of your business objectives and needs. This list will serve as the foundation for evaluating ERP systems and ensuring that the one you choose aligns with your strategic business goals.
2. Define Your Specific ERP Requirements
With a clear understanding of your business needs, the next step is to turn those needs into specific business requirements for the ERP platform. Start by listing the features you need. Do you need a system that can handle financial management, customer relationship management (CRM), or supply chain management? Maybe you need industry-specific integration capabilities, like tools for manufacturing or retail.
For example, if improving financial reporting is a key objective, you’ll need robust financial management features, including real-time reporting, automated compliance, and budgeting tools. If enhancing customer service is a goal, CRM capabilities that integrate seamlessly with your sales and marketing efforts will be critical.
You should also think about the technical side of things. Do you want a cloud-based system that you can access from anywhere, or would an on-premises system hosted on your company’s servers be better? Is the new system compatible with your existing systems? Additionally, consider future growth—can this ERP platform grow with your company as it expands? And, of course, keep your budget in mind. Effective ERP systems can be a significant investment, so you must know what you’re willing to spend on the initial purchase and long-term costs like maintenance and training.
It’s important to have a realistic budget considering the upfront costs and the total cost of ownership (TCO) over the system’s life. Clearly defining your requirements creates a solid framework for evaluating potential ERP software.
3. Research and Shortlist Potential ERP Solutions
With your functional requirements in hand, you can start looking at the ERP platforms available on the market. Start by researching and comparing ERP vendors, especially those who have experience in your industry. Some well-known names include SAP, Oracle, Microsoft Dynamics, and NetSuite.
Ask these vendors to give you a demo of their product. During these demos, see how well the software meets your needs. Is it easy to use? Does it have all the features you need? Also, check out what other customers are saying. Read reviews, success stories, or case studies, ask for references, and talk to businesses similar to yours to see their experience with the ERP platform. Based on what you find out, create a shortlist of a few systems that seem the best fit for your business.
4. Evaluate ERP Software for Fitting
With your shortlist in hand, it’s time to conduct a detailed evaluation of each ERP platform to determine the best fit for your business. A good way to do this is by developing a scoring system. List all the criteria that matter to you—like ease of use, functionality, cost, and customer support—and score each ERP software based on how well it meets these selection criteria.
Arrange for more detailed demos or even trials of the ERP systems on your shortlist. Replicate your business processes within the system to see how it handles your day-to-day operations. Make sure to involve people across your company in these trials; their feedback is invaluable.
In addition to testing functionality, assess each ERP vendor’s level of support services. Implementation is a complex process; you’ll need a vendor to provide the necessary training, support, and troubleshooting during this critical phase. Consider the vendor’s experience in your industry and their track record with similar ERP implementations.
Also, consider how much each system will cost upfront and over time—look out for hidden costs related to customization, additional user licenses, or integrations. Be sure to look out for hidden fees that might not be immediately apparent, such as the cost considerations for additional third-party software or extra customization work.
5. Make the Final Decision
After a thorough ERP software evaluation, it’s time to decide. Present your findings to the key stakeholders in your company. This might include executives, department heads, or IT leaders. Lay out the pros and cons of each ERP platform and explain which one you recommend and why.
Once you’ve chosen an ERP solution, negotiate the contract terms with the vendor. This is where you can discuss the price, payment terms, and what kind of support you’ll get. Make sure everything you’ve agreed upon is written down in the contract.
Then, work with the vendor to create a detailed implementation plan. This plan should outline each process step, including timelines and who’s responsible for what. Ensure everyone in your company knows what to expect and is prepared for the changes ahead.
6. Implement and Review the ERP Software
Finally, it’s time to implement your chosen ERP software. Stick to the plan you’ve laid out based on your ERP assessment and keep communication open throughout the process. Regular updates will keep everyone informed and help address any issues.
Before going live, thoroughly test the system. This is your chance to catch any last-minute issues and ensure everything works as it should. Once the system is live, support your team to help them get used to the new system. Training sessions can make a big difference in how quickly your team adapts.
After the system has been in place for a while, take the time to review its performance. Is it helping you achieve the goals you set out at the beginning? Are there any areas where it’s falling short? Regular reviews will help you finetune the system and ensure it continues to meet your business needs.
READY TO TAKE YOUR BUSINESS TO THE NEXT LEVEL? RASO360 CAN HELP YOU WITH YOUR ERP SOFTWARE SELECTION
At Raso360, we specialize in cloud solutions that drive growth and efficiency, including SAP, Microsoft Dynamics, and Oracle. These ERP systems are trusted by millions of users worldwide and have been thoroughly tested for their reliability. With high-quality and successful ERP implementation and support, you’ll streamline your business operations and receive excellent value for your investment.
If you’re currently using SAP ECC 6.0 and are considering migrating to SAP S/4HANA, our in-depth guide is the perfect resource to help you navigate the transition smoothly. Download our comprehensive SAP S/4HANA migration guide to discover the steps for a successful migration.
At Raso360, you always have access to expert support. Book a consultation to discuss your business’s ERP needs, and we’ll develop a solution that fits perfectly.
References
1. Beckman, Jeff. “60+ Must Know ERP Statistics (2024 Trends and Facts)” Tech Report, 3 July 2024, techreport.com/statistics/software-web/erp-statistics/.
