10 Question in Choosing a Midmarket ERP Solution

Understanding your company’s needs will signifcantly ease your decision-making process.

A lot of people may tell you that a system can

1. automate some of your tasks
2. minimize overlapping or repetitive tasks
3. centralize information and data
4. provide accurate and quick calculations

The above are common expectations most people have when they discuss about ERP. But those expectations will not be realized if you do not choose ERP solutions wisely.

You should ask at least these 10 questions when researching vendors and their products :

1. Do you know and understand the business problems your organization’s business leaders plan to solve with ERP? The frst step in choosing the right solution for your organization is knowing exactly what you need that ERP package to do. Your company may be embarking on an ERP implementation to grow revenue, increase productivity and improve efciency, but fguring out the specifc problems that need to be fxed to meet these goals can take some digging.
Keep in mind that “many ERP installations have fallen short of expectations precisely because of a failure to determine and define detailed project goals at the outset,” according to British fnancial-software provider Lakeview

2. Does your organization have a business-application vendor already? If your company currently uses applications in the Oracle-PeopleSoft, Oracle-JD Edwards or SAP business- application suites, your decision may be made for you. However, if you’re not satisfed with the vendor’s performance or if the ERP functionality doesn’t suit your organization’s needs, you don’t have to be locked in. Changing to a diferent vendor will probably interfere with the business to a certain degree, but it may be worth the disruption if it results in an ERP package that will ultimately
reduce costs across your organization.

3. Does your organization have any legacy ERP systems to contend with? If your organization is replacing a legacy ERP system or consolidated multiple systems, it’s critically important to standardize business processes across the enterprise.

4. Is a vertical ERP solution suitable for your organization? In an efort to make ERP more accessible to midmarket companies, most vendors have released bundles with software tailored to specifc industries — the choices are abundant and likely to target your organization’s industry, whatever it may be. Such a solution may speed deployment and decrease the amount of customization you require to fully support your organization’s business processes.

5. What functionality will your organization actually use? You may not need an end-to-end solution that incorporates everything from payroll to feld-service management to product-return authorizations to sales tax management. Aberdeen Group’s “The 2007 ERP in the Mid-Market Benchmark Report” reveals that the most frequently-used ERP applications are in the fnancial and manufacturing modules. Purchasing is the most widely adopted, used by 96 percent of the midmarket survey respondents. Next, 95 percent use accounts payable, 94 percent use inventory control, and 93 percent each use general ledger and accounts receivable. In contrast, few of those companies used their ERP applications for payroll (18 %), Human Capital Management (8 %), Enterprise Asset Management (6 %) and event management ( a measly 4 %). Your business may not either.
The bottom line: Don’t pay for functionality your organization doesn’t need now or won’t use in the foreseeable future.

6.  Does the ERP solution align with your organization’s business processes? To the greatest extent possible, make sure that the ERP system you choose requires very little — ideally, zero — modification to align the applications with your business processes. For the solution to be a good match for your organization, you should not have to employ the vendor (at considerable cost) to change the software’s source code to match your business processes. Even if your industry requires particular functionality, such as complying with manufacturing and environmental regulations, you should be able to find a vertical solution that delivers that functionality as part of its core offering.
That’s not to say that the ERP solution shouldn’t be customizable — it should, and it should probably come with a programming toolkit so that your company’s IT staf can fne-tune the applications.

7. Does your organization have the IT resources necessary to support an on-premise installation? Recognizing that midsize companies often have constrained IT budgets with fewer programmers and IT dministrators to dedicate to an ERP implementation than do large companies, ERP vendors are beginning to deliver their applications on demand or as hosted applications.
Even if your company can support on-site ERP, you may have good reason to consider an on-demand or hosted solution, as it can be a low-cost and quickly adaptable alternative to an on-premise ERP installation.

8. What kind of services will your organization require from the ERP vendor? Your company will require its vendor of choice’s services, from helping select the right ofering — many vendors ofer more than one ERP package suitable for a midmarket company — to customizing the specifc modules. Because you want to get the most out of your ERP implementation right away, consider also using a vendor’s business and IT resources consulting services — they can help design business processes to best ft the ERP applications, as well as help plan for infrastructure growth as your organization expands. Also, make sure that your company’s vendor of choice ofers adequate support services, training and even global outsourcing services.

9. What is the true cost of the ERP solution? Like any large-scale technology undertaking, purchasing the software and licensing — the cost of which depends on your organization’s size, the number of employees who will use the software and the number of ERP applications you’re buying — is just one part of the fnal cost of an ERP solution. Because midmarket companies are likely to be operating on a more limited budget than their larger competitors, it’s critical to know up-front what the costs will be for implementation services, maintenance fees and upgrades. Such professional services don’t come cheap, according to Aberdeen Group’s “The 2007 ERP in the Mid-Market Benchmark Report.” Of the 645 midsize companies surveyed, Infor customers had the lowest services-cost-to-software-
cost ratio, spending an average of 70 cents on professional services for every dollar spent on software.

10. Does the vendor have a clear long-term product strategy? In AMR Research’s 2007 report, “ERP Providers Serving the Midmarket,” the frm noted that midmarket ERP investments are “intended to last an organization 15 to 20 years.” Few deployments are expected to have a life span even half that of ERP, so investigating the long-term prospects of a company may be a new notion — particularly when you consider the many mergers and acquisitions that have roiled the ERP market in recent years. Nevertheless, you need to be sure that your company’s ERP implementation will be able to grow with the organization and adapt to changes in the business, as well as continue to ofer the best in ERP functionality as the technology continues to evolve.

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Source : www.Inside-ERP.com
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