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10 Steps to Buying an ERP System Software

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10 Steps As promised, we are continuing our series for ERP Systems.  This is our second install of the ERP blog with more to come regarding purchasing, implementation and unexpected costs, open source, industry specific and ERP buyer survey comments.

10 Steps to Buying an ERP System Software

Enterprise resource planning software is an integrated information management system involving financial and business software for all industry segments.

1) Do we need an ERP System? Assess your existing business processes from ALL departments to identify whether there is a need for an ERP system software. Implementing an ERP system is a long-term strategic decision for the company and it alters the work flow of your company.

2) What are the goals and objectives for the selection? After you meet with all company department managers, you'll be surprised to find that not everyone has the same requirements for ERP system software but they will have some very specific "must haves". Know what those are! Realize that there is not an ERP software package that can meet ALL the business requirements of a company or industry segment. I had a client that approached me at the Rockford Chamber's Manufacturing Expo and he stated, "I haven't found a software that can do all of what I want it do." That's right, there's not a "magical" software out there. Sometimes the solution is to fix some internal work flow issues.

3) Form an evaluation process. Either have a company committee research what is out there that meets your requirements or hire a consulting firm to do it. Usually, it's a combination of both - functional experts from different company departments and an outside consultant.

4) Define product requirements. Don't make it too difficult. Define the simple first. Is user friendly the most important? What is the skill level of your team using the software? Is inventory your biggest headache? You can purchase the best industry specific software in the world, but if it's too difficult to use, to set up and to manage then the ROI (return on investment) is not there.

5) Develop a pre-evaluation selection criteria. Select the top 3 ERP packages for final selection that meets the critical business needs, matches the skill level of the users and implements the business model work flow for the company.

6) Check out your peers and competition. What are some of the financial and business software packages they are using? What do they like? What do they dislike?

7) Final 3 extensive research. Schedule the real time software demos (NOT a power point) for the final 3 ERP system packages. Be prepared ahead of time with the specific functions and reports that you would like to see.

8) Know the history. How long has this ERP system software been around? How many times has the company been purchased? How much "red tape" do you have to go through to get the answers for fixes to software development problems that may occur after an upgrade? What language is this ERP system written in - how many platforms?

9) Flexibility. How easy is it to interface with third party softwares? Do you own the Source Code after you pay for a customization? Will the customization perform easily after an upgrade?

10) Vendors. Pick a vendor who can work successfully with your company's team. You have to be confident that they can carry through the implementation. Each company has its' own culture and not everyone can successfully work with that culture. Finding the right relationship and commitment is key in a vendor relationship. How long has the vendor been around? Check out their references.

Next week we will slide into third base with our ERP System Modules and Features.

Software Selection Guide

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