Choosing an Enterprise Resource Planning (ERP) software provider is a critical decision that will affect an organization for years. It is important to establish a team of people with a variety of skills to analyze the business and technical needs of the organization, analyze several ERP provider offerings, and make recommendations. ERP is a large business, and significantly impact a business.
A team should be put together to help determine the goals for the ERP system. Goals may include improving business process efficiency, increasing the organization’s ability to better server customers, and lowering the costs of technical infrastructure support. The team should consider their organization's industry and size because some ERP software is built for specific industries, and others are designed for the size of an organization. Choosing the correct industry-specific or size-specific provider will require less customization of the software.
ERP solutions are expensive, and should last the organization for a decade or more. It is critical to find a provider that is likely to remain in business for that length of time. Financial stability is an important factor when choosing an ERP provider.
Another factor is the geographic distribution of the organization’s workforce. A different solution might be preferable if the workforce is dispersed, rather than operating out of one location. For example, a geographically distributed workforce may make using a hosted ERP solution more beneficial. Hosted ERP software is generally more expensive.
An organization’s business and technical environments will be factors in choosing an ERP provider, and may determine the cost of the software. The level of complexity should match the expertise of the ERP provider. Organizations with simple environments may not need some of the functionality or services that organizations with complex environments need.
The team should review the offerings of several ERP providers and decide which provider has a solution that most closely fits the organization's needs, and determine how much customization may be needed. Ideally, very little customization will be required to allow the ERP system to meet the organization’s business and technical requirements. Customization is expensive and time-consuming. Customization will be required not only on initial installation, but also during every software update.
There are different ERP provider infrastructure platforms available. An option may include installing the ERP software in the organization’s data center. In this situation, the organization will be responsible for scaling up hardware, software, and personnel for managing the ERP solution. ERP hosting by the provider may be desirable for organizations interested in outsourcing ERP software maintenance.
An organization should also consider its staffing and whether it has personnel with the skills and experience to implement and maintain the system. If not, the organization may want to partner with a provider that can provide ERP consulting and training as needed. If the organization has these resources, it can look at ERP providers that are not as strong in this area.