Member Article

3 questions to ask ERP software providers

Having your ERP software configured to fit your business provides many additional advantages but requires specialist involvement – so here are 3 questions to ask a prospective ERP provider.

Committing to a software provider

When it comes to choosing an Enterprise Resource Planning solution for your manufacturing business, it is extremely unlikely that the system will match all your operating processes “out-of-the-box”. Many ERP/MRP systems will be relatively close as standard products, but:

• They are often unable to cope with the “quirks” of your processes
• They may not support the specific manufacturing stages of your product
• They may not cope with regular process changes.

“Software should be changed to protect any process that provides competitive advantage or differentiation.” 2012 - ERP Report – Panorama Consulting

At this point, your business needs to consider the ability to configure an existing system so that it matches your business needs perfectly, for which you will need assistance from ERP software specialists. Here are three questions to ask any ERP software provider to make sure you get the specialist help you need.

Will my ERP system be future proof?

Your business and processes will change over time and you need to be sure that your manufacturing software can cope. Think:

• If our processes change, will the new software adapt?
• In the event of regulatory changes, are upgrades and modifications included?
• Ultimately, will the software be reusable if things change? Or are the modules “set in stone”?

If your enterprise resource planning system is authored by your provider, expect greater flexibility as they have full scope to enhance the product and will often seek to include enhancements into their standard product. If the software is being customised heavily by a third party reseller/developer or written bespoke, expect future changes to require substantial work and upgrades to be more difficult. Ultimately, if your ERP system does not adjust with your changing business processes, then its usefulness and lifespan is severely limited.

“Not all customizations are created equal. If the customization can be added as a separate component which can be isolated from the main line code, then it will present fewer obstacles to future upgrades and be easier to manage.” 2011 ERP Solution Study - Mint Jutras

Do you have experience of our sector?

To ensure your chosen ERP software providers are suitable for your project, you need to know:

• Have they ever worked in your particular industry niche?
• What evidence can they provide of their experience and commitment to the sector?
• Do they have a reference with whom you can speak?

If your software provider can provide adequate evidence, they should be able to accurately configure the system to what your business needs with their standard software ERP functionality.

“ERP is packaged software that is designed by vendor organizations and is used by customer organizations, two sets of players independently of each other. The institutional conditions and human actors involved in technology design are different from those involved in technology use. As a consequence, ERP, as a semi-finished product, tends to embody the institutional properties of vendor organizations, which might be from a different country with different meanings, norms and powers.” ERP Customization Failure: Institutionalized Accounting Practices, Power Relations and Market Forces - Ahmed O.R. Kholeif

How much development needs to be done for this ERP system to do what I want?

Most software projects are billed on the time it takes to complete. If you are able to configure a standard product to meet your needs, the costs will be lower and implementation quicker. If bespoke customisation is required, find out how much the project requires and the timespan because:

• It will define how much the project will cost
• It provides extra confidence in the provider’s ability
• It gives you a definite deadline for which to prepare your staff and processes for roll-out.

Without a deadline, the ERP/MRP system customisations may never be completed! And unless the extent of bespoke customisation is openly detailed, your business doesn’t know how far your system is being changed from the standard product – which has cost, support and lifespan implications for your future.

For example, if bespoke customisation exceeds 15% of the project cost, is the core system truly fit for your requirements?

Bonus question – What about after installation?

Developing and installing the software is just the first step in preparing your new ERP software. What happens after it has been deployed in your business?

• What level of support can I expect from you?
• Will my staff be trained to use the new software functions correctly?
• How will problems and bugs in the software be resolved?
• What level of IT staff support does the system require?

And two key questions are:

• Will I still be able to upgrade my tailored system with ‘standard’ upgrades in the future?
• How much will the technology the system uses cost me to maintain and support?

Your ERP software and users will require on-going support – it is best to get this arranged before beginning any development project.

“Many organizations do not realize that the total cost of ownership of an ERP system is composed largely of on-going support. While initial license fees and consulting services required to implement the system are one-time investments, the cost of support personnel recurs year after year.” ERP Support Staffing Ratios – Computer Economics

Tailoring ERP software to your specific business processes certainly adds to the overall cost of a project, but if easily achieved through configuration and minimal customisation, it will provide even greater efficiencies and potential for competitive advantage.

Considering an ERP software implementation? Download our eGuide How to avoid ERP disappointment now… Copy and paste this link into your browser:http://bit.ly/1JevxRN

This was posted in Bdaily's Members' News section by Paul Bywater .