How to Select an ERP System

With hundreds, if not thousands, of different types of ERP systems on the market, it’s hard to know which system is right for your business. Different tiers, target markets, and feature sets can make the selection process overwhelming—and make it difficult to know where to start.

The good news is that all of this variety is actually good for you, as it means that there is a system on the market that is perfect for your business.

Your only job is to find it.

Identify Why You Need an ERP System

The first step in finding the right ERP system for you is to identify why you need an ERP in the first place. Before you start researching different ERPs and their features, costs, implementation methods, and other factors that will be important to finding the right ERP system for your business, take a step back and figure out why you need an ERP.

The obvious answer is that if you want to grow your business and remain competitive, you need a comprehensive software system that will help you manage every aspect of your business.

But you actually need to dig a little deeper than that.

Gone are the days where you could get by with the number one ERP system in the world (Excel). While it’s true that many businesses still use Excel as their defacto ERP system, if you choose to be one of these these operations know that you will lose significant business to competitors that have upgraded to a better solution.

All good true ERPs (not Excel) will help you increase your efficiency and reduce costs—an ERP will connect and integrate all the different aspects of your business into one database, streamline your tasks and processes, and let you share accurate information across your company. But to truly find the best ERP for you, start thinking about what your business really needs to get out of an ERP.

Build a Business Case for Why You Need an ERP

A good way to determine why your business needs an ERP system is to create a business case for a new ERP system. When building a business case, be sure to define how an ERP system will help you achieve your organizational goals. Your business case should answer the following questions:

• Will an ERP improve employee and operational efficiency?
• Will an ERP eliminate silos and integrate disparate systems?
• Will an ERP enable real-time data, allowing for better decision-making from leadership?
• Will an ERP improve your business processes from quote to cash?
• Will an ERP improve the customer experience?

And the biggest question of all:

• Will a new ERP system help achieve long-term organizational goals and improve the bottom line?

Don’t just invest in ERP software because you see everyone around you doing it. Take the time to figure out what it will actually improve in your day-to-day operations, plus how it will help you achieve your long-term goals.

Identify Your Pain Points and How an ERP Will Help

The next step is to identify the specific problems your manufacturing business has, and how you can fix them. Sit down with a small, trusted group of people at your company and ask yourself what do we need to improve to become a better business?

A good sentence to use to figure this out is “We need to improve ______ by ______.” Maybe you need to improve profitability by cutting down on raw material costs. Maybe you need to reduce errors by clarifying procedures. This isn’t an easy step and it will take effort and work to figure out exactly what your business needs to improve, but once you have you can almost guarantee that you will be able to find the right ERP for you.

The most common pain points that companies seek to address are:

• Employees losing time
• Information delays
• Error reduction
• Blind spots in operations
• Improve estimation process
• Standardize profit margins
• Inventory tracking
• Knowledge transfer
• Complete margin oversight
• Scalable growth

Only once you know what your organization definitively needs to improve your business, can you start looking for an ERP system with the right features for you. Instead of becoming distracted by bells and whistles that won’t be of any use to your organization, you will be able to focus on the right features that will benefit your organization the most.

Want to learn the next steps in finding the right ERP for your organization? Download our eBook: How To Select the Right ERP and learn the five must-follow steps to selecting the right ERP for your business.