Seven enterprise resource planning selection challenges
When it comes to enterprise resource planning (ERP) selection challenges, many manufacturing and distribution organizations find that navigating through the many available solutions can be an obstacle in today’s industrial environment. Enterprises saddled with legacy, outdated ERP systems often don’t know where to begin when it comes to an ERP selection project. Worries over what could go wrong abound.
There is another way. Today’s ERP system provides manufacturers and distributors the tools necessary to improve business performance. Robust business intelligence, dashboard reporting, mobile access, real-time data access, integrated inventory control, quality, material requirements planning (MRP), and other features can help companies work smarter, make informed decisions, and improve business processes.
A full review of business process improvement with accompanying change management directives—identified well before scheduling any demos from potential solution providers—sets the stage for true value realization from the efficiencies of a new ERP solution.
When carefully selected, an ERP system helps companies succeed and prosper in changing environments, setting them apart from competitors. A poorly considered or rushed choice can lead to an expensive and unused system that doesn’t deliver on its promises.
Pitfalls to avoid in the ERP selection process
There are seven pitfalls that many manufacturers fall into as they try to select a new ERP solution:
- Failure to properly analyze the company’s specific requirements: Without the formulation of a well-thought-out goal of what the future state looks like, switching to a new ERP may result in a less-than-optimal solution. Look for features that give an advantage and are unique to the company’s industry.
- Lack of realistic deadlines coupled with insufficient resources: Take the time to truly research enterprise needs and the ERP vendor’s offerings, reviewing references and participating in demos. Make sure the team has the motivation, energy, and buy-in for the implementation of new software. Consider resources carefully for the teams involved.
- Ignoring training and change maintenance: If the enterprise cannot allocate proper time for training, the project is doomed for failure and employee resentment. Prepare for change rather than responding to it later.
- Missing the step to make sure all legacy applications are decommissioned: Avoid duplication and inefficiencies.
- Failure to properly set up a test environment: Make sure to test that the new solution will accommodate the enterprise’s realistic workload.
- Not reviewing enough vendors/reviewing all a vendor has to offer: One size definitely does not fit all in the ERP space. Be sure to compare multiple vendors and dive deep into features to weigh all options.
- Focusing on costs to the detriment of realizing long-term benefits: Don’t do price comparisons too early in the process and miss out on how a new ERP could affect true business process improvements. Consider factors beyond costs.
ERP selection challenges
Many companies looking to select an ERP experience common issues such as poor access to information, core systems that are difficult to use, and an over-reliance on standalone systems that are islands of information. In addition, they have systems that have not been updated or which are held together with manual work-arounds or odd assortments of bolt-ons.
As these companies enter into an ERP comparison and selection project the ERP selection challenges can be lumped into these five categories:
- Uncertainty: The company can’t get a clear handle on what’s available with modern ERP in terms of BI, reporting, features, integration, mobile access, security and more.
- Resource and time challenges: The manufacturer doesn’t have the necessary internal information technology (IT) expertise, resources, or time to effectively take on an ERP project. Nor can the company spare internal staff for this effort.
- Lack of insight: The company needs help to understand current processes, including where the opportunities are to improve with new technology, and which ERP system best fits its requirements.
- Future growth: Many organizations are not exactly sure of their technology needs in the face of growth from expanded markets or facilities.
- Return on investment (ROI) concerns: Many teams are wary of making a significant investment in technology when they don’t have a clear vision of the expected costs and ROI.