How to Choose Between Enterprise Resource Planning Systems
Your spreadsheets are in shambles. Your documents are in disarray. Your accounting is atrocious. Your customer service is crumbling.
It’s definitely time for an enterprise resource planning (ERP) system. Now the question is, with so many types of enterprise resource planning systems to choose from, which one?
Whether your business identifies with the chaotic ERP-less scenario described above or you already have an ERP system but it no longer meets your needs, we can help you! You’ll walk away with a better sense of how to sort through the various ERPs on the market, what to look for in a solution, and other points to consider during your ERP selection process.
Put the “Planning” in Enterprise Resource Planning System Selection
ERP selection and implementation can take as long as a year, so it’s not a stretch to refer to the process as a journey. And for a successful journey, you need a map and you need to know who’s going on the journey, what you want to take with you, and what should be left behind.
Pick Your Team
Gather critical stakeholders from throughout the company who will participate in the selection process. This may include adding contractors or experienced ERP consultants who can help guide the process. Deloitte recommends defining each person’s role and determining how much of their time will be devoted to the project.
Decide What’s Working and What’s Not
Identify pain points associated with the current ERP system or way of doing things. This can be a good jumping-off point for identifying desired features for the new system. Senior managers at Deloitte caution, however, that some issues might actually stem from “upstream processes that need to be addressed first.”
Keep Your Eye on the Near(ish) Future
Envision what you want your company to look like in a few years so you can select your ERP system accordingly. Keep in mind that looking too far into the future is almost as detrimental as shortsightedness. It isn’t prudent, for example, to spend extra money on a system that offers manufacturing-specific capabilities if your business doesn’t plan to start a manufacturing division for another 15 years. When it comes to looking ahead, 5-10 years is the sweet spot.
What Should You Look for in an ERP System?
Now that you’ve completed some preliminary steps in the ERP selection process, it’s time to delve into greater detail about what differentiates one ERP system from another.
Here are a few important criteria to consider when choosing between different types of enterprise resource planning systems:
Fit
The right ERP system will be appropriate for your particular industry. If you’re a manufacturing or distribution company, for example, you’ll want to look for a solution with robust inventory management capabilities, whereas this might not be as important for a professional services firm.
Scalability
Look for an ERP system that can accommodate future growth. Maybe it allows you to add new users at any time or offers certain features on a modular basis. The last thing you want is to undertake a major ERP implementation effort now, only to have to do it all again before the first one is even fully up and running.
Ease of Use
An ERP with tons of features may seem attractive, but capabilities can equal complexity, and complexity can equal increased onboarding time, not only in terms of initial implementation but anytime a new employee begins using the system. A more complex system may also take longer to pull up on desktops, laptops and mobile devices, reducing agility and potentially impacting morale for those who must access the system several times per day. When it comes to ease of use, it’s also important to consider navigation, user interface and overall user experience.
Health and Sustainability
Assess whether the product you’re considering will be healthy and sustainable for the next 5-10 years. You don’t want your system to be nearing end-of-life just as you’ve started to reach your stride with it. Ways to assess the health of an ERP platform include looking at their existing and new customer base.
Data Migration
The new system’s ability to accommodate your current system’s data is an important consideration, and the right ERP consultant can play an integral role in facilitating a smooth data migration process. But, just as a person moving houses probably shouldn’t put 10 boxes of clothes in the moving truck that really belong at a donation center, the transition to a new ERP system might be the perfect time for a data cleanup, Deloitte says.
Cost
When looking at the cost of different types of ERP systems, consider the fact that the “sticker price” isn’t everything you’ll pay. There may be additional data hosting fees, costs for customizations and integrations, training and support fees, maintenance fees, and more.
But also bear in mind that a cheaper system is no bargain if you end up wasting staff hours on menial tasks like data entry because your ERP lacks the functionality you need. On the flip side, if your ERP system is too feature-heavy, you might need to pay for additional training or hire employees with specialized knowledge (who may command specialized salaries).
It’s All About What You Need
In many cases, selecting a particular ERP system doesn’t mean choosing a superior product over an inferior one. It’s simply that different types of enterprise resource planning systems are right for different types of businesses.
As an example, let’s look at two popular ERP systems on the market today: Acumatica and Microsoft Dynamics 365 Business Central.
Both Acumatica and Business Central are geared toward small to mid-sized enterprises (SMEs). Both are established companies (Acumatica was founded in 2008, Microsoft in 1975), meaning there’s a reasonable expectation of healthy, sustainable products. Both products have been praised by critics and power users alike for their flexibility, robust customization options, and ease of use – PCMag called Acumatica an “excellent option for those needing a scalable financial and enterprise resource planning (ERP) platform” and Business Central users have lauded features like its “intuitively structured dashboard” and “enormous adaptability.”
There are, of course, points of distinction between the two systems. A major one is pricing structure. Where most ERP vendors charge on a per-user basis, Acumatica is unique in that it charges customers based on resource use – specifically, transactions such as invoices or sales orders. While this can make initial budgeting difficult, thus complicating the ERP planning process, in return you get scalability, as the system accommodates unlimited users at no additional cost.
Enterprises that already employ Microsoft products should have an easy time adapting to Business Central and will appreciate its out-of-the-box ability to export data to Excel or Microsoft Power BI for data analysis or visualization. Acumatica is understandably not as Microsoft-centric, focusing instead on “playing nice” with a variety of software brands. This translates to a wide variety of integration options that may require additional effort to take advantage of.
Why Crestwood?
Crestwood Associates is the partner you need for your ERP journey. We will walk with you every step of the way, starting by helping you choose the type of enterprise resource planning system that helps your company fulfill its goals. We guide you through the implementation process, including assisting in migrating your data to the new system. And in the future, when it’s time for one ERP journey to end and another to begin, you’ll receive a full, relational database that can be smoothly imported into your new platform.
With more than 5,000 successful ERP implementations under our belts, you owe it to your business to see what Crestwood Associates has to offer. Don’t wait. Request a consultation today.
