ERP Software
Published December 10th, 2016 by

6 Guidelines on How to Choose ERP Software for Your Organization

6 Guidelines on How to Choose ERP Software for Your Organization

In order to find the best ERP software, you need extensive knowledge about different products that are available today. Gathering data containing information about a product is advisable so you can pick out something that suits the needs of your organization. The majority of the software provides the usual need of each industry such as manufacturing, distributing and retailing so this should roughly give you an idea of your choices.

There are many reasons why ERP software or enterprise resource planning software is chosen by many companies. But one common outcome when utilizing the tool is the efficient and organized implementation of the different processes needed to run the business. In the long run, the cost spent in acquiring the software is overshadowed by the great benefits.

Simplified Management Processes With ERP Software

Companies who use ERP software are able to combine different applications in just one system.  They can organize, manage and even automate all back office jobs including the management of distribution process, supply and pricing. The software is comprised of different modules and applications with various functions so you can find one with all features you need.

For smaller business, the software can help with financial management while for larger companies, it can assist with the overall operations that will lead to faster business transactions.

The tasks of different departments that can be integrated into the ERP software are the following:

  1. Financial management

ERP software for accounting is very useful in financial management because you can consolidate multiple systems like sales, service, and operation in one platform. You can also easily create quotes, orders, and invoices without switching from one application to another. The usual time spent in doing financial management job is decreased.

With the software, you’ll have access to reliable reports which show a complete picture of what is happening in the business starting from accounting, sales, purchasing, and inventory. The report is not only accurate but up-to-date as well so it is helpful to spot trends and issues that you can correct in the early stages.

  1. Project management

Effective project management plays a huge role in the successful implementation of plans. When ERP is integrated into project management, it aids not just in the implementation but the preparation and planning stages, too. Now, you can easily monitor tasks that have a deadline. There will be no more late deliveries on top of the better billing and project monitoring.

  1. Operations management

Tasks that are under operation management are buying, manufacturing, inventory, and sales order processes. These jobs can be streamlined with ERP software for retail industry. The details of products you have and those you need to purchase are accessible anytime you need it.

Every time a client purchases a product or avails a service, it will be reflected in your records. This will allow you to monitor your inventory so you can place an order or manufacture ahead of time before your products go out of stock. When products are readily available, your sales will not be halted; thus, continuous profit is generated.

In the manufacturing area, the software records every transaction made in producing a particular product so you can see the bill of materials. As for the purchasing, the software records suppliers of raw materials and price negotiation if there are any.

  1. Customer relations management

Efficient management of business processes is worthless if the customers are not treated properly. Even if you have the best product but you have bad customer service, your sales will remain stagnant or decline.  ERP software coupled with customer relation management (CRM) makes sure that there is improved customer service, resulting in increased upsell and cross-sell.

Information like the client’s account receivable, delivery, invoicing and the like are recorded in the system. This information is utilized to provide better service and attract new customers.

  1. Human resource management

According to American Psychological Association, US businesses lose about $300 billion or approximately $7,500 due to tardiness, absenteeism and decreased productivity because of stress brought about by their jobs. To solve this problem, companies have created workplaces and even software that help employees.

ERP software for human resources helps with managing HR tasks and activities. The employees are the most important resource of a company so providing them with great HR service is vital to keep them happy with their jobs. Service covered by the ERP software under HR management are payroll service, incentive compensation and employee center.

Choosing ERP Suited for the Needs of Your Organization

If you try to search online for different ERP software to buy, you will be presented with so many options and it can take a long time to make-up your mind. If you still don’t have a checklist or guidelines, we have made one for you.

  1. Look into the needs of your company.

Start by carefully defining what current issues you want to solve with ERP software. Be very specific with what you need so vendors can present to you specific features, too. Many companies base their decision on the price of the software or the reviews from other users. This can be helpful too but different organizations have different needs so you can’t rely on that information.

If you are not able to pick the suitable ERP, you will end up spending more on customization to suit the needs of your company. Be sure to choose software that is industry-specific with features that directly address the problems you have identified.

  1. Know the vendors.

Investing on ERP software is a huge decision because it costs a lot. Because of this, you have to make sure that you go to a reputable vendor. Meet as many vendors as possible and find out how much experience they have with the industry. Also, do your own research and look for product reviews to check how other people find the software.

Remember that vendors would only focus on their products’ strengths so it is your responsibility to find out what its weaknesses are. Ask for at least 3 references of satisfied customers.

  1. Consider your long-term goals.

Ask yourself how much growth you expect from the company in a few years. Then, make sure that the software you choose has a scalability feature. When the software is scalable, you can adapt to new technologies that might arise in the future. You can be assured that your system will remain at par with new tools.

Capabilities that need to be considered with scalable software are utilization, platform, user count, and functionality.

Ask how much data the software is capable of storing. There are systems that can’t function well when the storage is consumed. If you will need large storage, you should be able to customize the needs of the company. Another thing to think about is the number of users that can utilize the system. Find out if user licenses are priced individually or by the bundle.

  1. Get support from your team.

Prior to installing the software, you need to create a team who will implement it. You need to consult these people and ask for opinions about the different software. Everyone on the team has to be 100% convinced with the tool before you push through with the purchase.

Getting support from other staff coming from other departments is also important especially since the tool will be integrated into all areas of the business. You can also ask help from these people in creating a list of company problems that the software will address.

  1. Purchase only the modules needed.

ERP software is made up of different modules and each of these has specialized areas which handle particular business processes. Identify which department in your organization badly needs the software then focus on those areas first. Don’t worry if needs in another department will arise later on because you can always integrate the tools when necessary.

  1. Consider hiring a consultant.

There are times when your support team can’t handle complex ERP processes. In cases like this, hiring a consultant is highly recommended. The consultant can be industry-specific or someone who has comprehensive knowledge of the software. A third-party vendor can also help you particularly during the first few months of using ERP.

Budget and Resources

There is a huge difference between prices of ERP software. They may have the same functions but some are priced 5 times more than others. People might probably think that the higher the price the better it is, but this is not always true. Don’t underestimate the low-cost products. Always have an open mind and try to compare not just the price but the features as well.

Remember to take your time in choosing ERP software. Make sure you go through each of the guidelines so you can have a clearer vision of what type of ERP software is best for your company. Don’t be confused with the different software available. As long as you follow the tips, you will be directed to the best ERP software.

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