“How much does your software cost?”, is usually the first thing I get asked when I first meet or talk to a prospective client. I reply saying:
“How much of your company’s time is spent duplicating data with double entering and inefficiencies with your current system?”
Traditionally Enterprise Resource Planning or ERP was a system viewed to be more suited to large business or corporations who can
afford and splash cash towards the project. That may have been the case many years ago, oh how times have changed thanks to cloud computing.
“We need to move to a system that does it all but ERP systems are too expensive
from what I heard”
Don’t get me wrong, ERP are pricey compared to what you
spend on your current smaller system like MYOB of Xero which is a thousand or so per year, but it’s not too much when measuring the cost saving when you streamline your processes with ERP.
All too often I get asked that question by clients, so my blog is about “Checklist when evaluating ERP systems”
Here is a quick key point checklist I recommend when evaluating ERP systems;
Evaluation of ERP systems
- Ask your accountants or financial controller who they recommend to look at when it comes to ERP. Also talk to your contacts and other businesses that use ERP and get their views on what they use.
- Look at both cloud and on-premise ERP systems so you get to compare the best of breeds and the IT infrastructure required
Cost vs Benefit Analysis
- If you are still using spreadsheets and consistently double entering information with multiple systems, measure those costs. Your preferred ERP system should replace that and once you tally up how much time and money is spent on that, you will start to see a truer picture of costs involved.
- Add up your total cost of ownership comparing on-premise and cloud applications over a 5-year period.
- What more can I get out of the system if I want to expand and grow the business? For example, acquisition of new businesses, expansion overseas with additional offices etc
- I want to diversify my business, can the new ERP system handle that?
- Will I ever outgrow my selected ERP system?
- Who will support my business when I implement the new ERP system?
- What types of support model do you offer?
Before you select the new ERP system, get some reference sites and talk to existing clients using the ERP system. Ask them these questions;
- Was the project implementation on time and on budget to what you were quoted?
- If you were to change the project implementation again, what would you do
- Did the new ERP system save you money with more improved efficiencies?
- Does the system allow you to make changes, create reports, give you ownership
to enhance the ERP easily? Or did you have to pay an external party to
complete those tasks?
- Was your business affected when upgrades occurred?
- Did you require more support after your system went live?
- Would you recommend this system to others?
Remember, change your business to suit your ERP system NOT change the ERP system to suit your business. If you have that mindset to make that change and take that leap to a ERP system, your business will be successful and grow.