Top_Five_Mistakes_To_Avoid_When_Choosing_ERP_Software

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					Title:
Top Five Mistakes To Avoid When Choosing ERP Software

Word Count:
1720

Summary:
Top Five Mistakes To Avoid When Choosing ERP Software


Keywords:
ERP Software, Softwares, Computer Software


Article Body:
1. 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.

      Take into consideration that, in order to efficiently implement and
use best-of-breed solutions, you will need extensive knowledge of both
the business rules and the database constructs within each application of
your business processes. This is due to the fact that all of your
individual systems need to run in unison in order for your data to be
consistent and accurate throughout your operations. If you’re not
prepared to deal with the sometimes overwhelming task of creating your
own interface between disparate systems, then fully integrated ERP
software is your better choice.

      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.
2. 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. For an industry tailored solution,
find a provider who offers specialized software for your industry and
therefore will be able to provide the most beneficial solution for your
business needs. Your solution should be specifically tailored for your
business and industry and your provider should know your industry as well
as you do; enabling them to make recommendations. 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.

3. 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. In many cases, resellers will have to
learn your business and then retrofit a customized solution to meet your
specific needs, which ultimately costs you more money. Find a partner who
is using best practices, not just generic business process flows, in your
industry.

      Avoid vendors who are not in sync with where your industry is
going. Instead, look for a partner who both knows your industry and knows
where your industry’s future is headed. 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. Responsive product support, ongoing product releases, and user
forums such as on-line bulletin boards and user conferences are all
essential business tools and services that your vendor should offer if
they are looking to build lasting relationships.

4. 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. When you’re investing your money and time into implementing a
system that will enhance the performance of your business, isn’t it worth
dedicating someone to making sure it’s done right?

      Lack of commitment and support from the top is another area where
companies fall short. The President or other top executive of the company
should be involved. This does not by any means refer to them leading the
day-to-day activities of the project, that’s what the dedicated Project
Manager is for, but more so to their being involved in status meetings. A
solid commitment from the top will flow through the organization to make
implementation of your new ERP software a success.

      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. And, in the event
that an employee leaves or changes positions within the company, the next
person stepping into the position can learn the job more quickly and do
the job more efficiently if there’s documentation at hand that serves as
instant training.

      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. Once the new system
is live, users should have continued follow up training, whether it be
every 4, 6, or even 8 months. This will enable your company to identify
any implementation areas that may not have been needed at the time of
deployment, but which have become necessary later on.
      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. In many cases, problems will be discovered during this
testing process that may require some minor modifications before going
live. In order to minimize errors after deployment and maximize the
potential of your new ERP software, it is crucial to test all of your
data, procedures and processes before launch.

5. 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. While human nature tends to lead us down the
path to the bargain deal - we often do this at home, not just at work -
with ERP software, what appears to be the lowest cost solution often
results in the greatest long term cost. When securing proposals, if you
find a vendor’s quote to be far below that of other vendors you are
considering, chances are the deal is too good to be true.

      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 provider when you can expect to start seeing a return on your
investment. Hasty decisions in favor of the lowest cost ERP software
provider or solution may leave you plagued later with hidden costs, and
delay or eliminate any ROI for your business.

				
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