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Navigating the ERP purchase decision-making process

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Navigating the ERP purchase decision-making process

When purchasing a strategic software solution, such as a new enterprise resource planning (ERP) solution, making the right decision is vital. The following steps are designed to give organisations a better understanding of the functions needed for the business software to perform, establish its infrastructure requirements, and achieve ROI quickly.

 

Assess functionality needs

 

Start by evaluating the business challenges and individual pain points that you need to address, and determine the business value your organisation needs to extract from the software. What problems should it solve, or what new growth opportunities should it create for your business?

At a very early stage of your decision-making process, you will want to compile a list of cross-functional requirements to use, to reach out to software vendors that have solutions that match these requirements.

If replacing legacy software, make sure to keep in mind future business goals, as opposed to simply writing a list of the shortcomings of the old software. Where do you want to be in 3-5 years? What your ERP solution needs to support in the future, is almost more important than what the system does for you today.

Another key question to ask is: How do you want to deploy the solution? Legacy systems traditionally are on-premises solutions. Today, you have a choice in deployment including traditional on-premises, hosted, “true cloud”, or some hybrid of any or all of these options.

 

Have an open dialogue with software vendors

 

The beginning stages of any software decision should involve an open and honest discussion with the software vendor about the organisation’s business ambitions. If your focus is to increase profitability, the vendor must show their strength as a true partner by suggesting options that will best accommodate the goal, in line with the company’s overall business strategy.

 

Understand the end game, not just cost of ownership

 

New software requires a considerable business investment, however, it’s important to measure ROI, not just cost. Consider the up-front purchase budget alongside other key considerations, such as the benefits the organisation can expect to gain from that software, as well as the long-term maintenance costs.

Today’s next-generation enterprise software assists companies by driving up their productivity, while keeping costs down. A modern ERP solution can help a business save valuable time by reducing the amount of administrative tasks that employees have to complete, automating processes and streamlining workflows. This results in a business that is more agile, responsive and competitive.

 

Supporting the new software

 

Be sure to understand the capabilities of your company’s IT department. Will the team need help throughout the entire implementation process and beyond, or will they just need a training session before managing the deployment themselves?

An ERP system is not a function of the IT department, it’s a function across the entire business and this is where massive cost savings are realised. Cost of ownership is a principle that is not understood and is often found within organisations that do not see technology as an advantage. They are stuck in the mentality of “we have always done it that way”.

Choosing new software is a complex task and it can also be a confusing experience. Once implemented, the system needs to evolve with the ever-changing requirements of the business and these configuration changes must be carried out by the organisation itself, not the IT department or the IT vendor. It is becoming more of a business function to update configurations and reporting dashboards.

 

Research the software vendor

 

It is vital that companies check credentials and do the necessary research to make sure they work with a software vendor that cares about the business requirements, not just about where the next sale is coming from.

Reputable software vendors will consult with the company on different options available and offer honest opinions on how to use technology to improve the business. This is especially important when purchasing an ERP solution, which is a whole package, not just one small element of a business’s technology.