6 Factors to Help You Choose the Worlds Leading ERP System

Enterprise resource planning (ERP) is one of the core business systems essential for any company, regardless of size and industry. According to Statista, in 2018, the turnover in the ERP market was around $39.4 billion.

However, choosing a world leading ERP system can be a daunting task with all the options available today.

To ease your difficulty in deciding which system is best for your organisation, here are six factors to consider while evaluating ERP software:

1) Functional Capabilities

Look at the functional capabilities of the software to see if it will make your job easier. For example, accounting and finance departments implement ERP systems for an accurate recording of financial transactions, while marketing teams need solutions that provide real-time data on customers.

Some essential features of functional capabilities are:

a) Flexibility

The software should be flexible to adapt to organisational changes. For example, if your department plans for a new product launch, the system should incorporate it without any glitches.

b) System Interoperability

The ERP system should integrate with other related software for better reporting. For example, if you use an e-commerce platform, the software should sync with it to better inventory tracking.

c) Scalability

Ensure that the system is scalable and can handle a sudden increase in user base without compromising performance. Scalability also prevents IT infrastructure from going obsolete.

A scalable system allows you to use the same software for small and big businesses, helping you save costs.

2) ERP Vendor’s Strengths

When you talk to different vendors, they emphasise their unique selling points. You need to study these strengths and how they will benefit your business.

Some of the most critical factors are:

a) Agility 

Agility is essential for businesses to achieve a market advantage. The system should be flexible enough to make changes quickly.

b) Ease of Use

The system should be easy to understand and implement. You do not want to take too much time and resources to train employees.

c) Cloud Factors

The system should have adequate cloud support so you can access real-time reports anywhere, anytime. Plus, it will save you money on heavy infrastructure.

d) Customisation

ERP software should be customisable to fit your unique business needs. It can help you achieve efficiency and accuracy. Customisation is essential if you have different units in your business with particular requirements.

e) Technology

The system’s technology should be progressive and state-of-the-art to give your business a competitive advantage. If you look for an off-the-shelf solution, the vendor should have the latest technology.

f) Pricing 

The vendor’s pricing model should be transparent to avoid surprises at the end of the contract period. You can negotiate when the vendor offers discounts.

3) Business Model

Analyse your business model to understand if you need an on-premise or off-premise leading ERP system. 

On-premise software is installed on your business’s local servers, while off-premise ERP solutions are web-based.

On-premise solutions offer more security and control, but they require expensive infrastructure. Plus, you need to allocate resources to manage and upgrade the system. 

On the other hand, off-premise solutions are more accessible to implement without significant business processes changes. However, you cannot access real-time data because your data is stored remotely. Also, the vendor should have a fast internet connection to ensure that the system is up and running at all times.

4) Organisational Factors

The company’s business model, structure, and employees’ skill sets are crucial factors to consider.

If you are part of a big organisation, the system should support multiple users. Big companies also need powerful financial reporting to store sensitive data securely.

5) Industry-Specific Factors

Industries have unique business requirements. The ERP system should integrate seamlessly with other software, such as the accounting package.

It should also have specific functionalities to suit your industry, such as warehousing or business connectivity if you’re planning in engaging with customers frequently

6)  Financial Considerations

The vendor should have a good track record of delivering solutions that meet customer demands. In addition, you need to significantly examine the solution’s cost-effectiveness if your business model changes over time.

You must remember that an ERP system is an investment for future growth. You should ask the vendor about future support, upgrades, and maintenance costs.