ERP Evaluation Process- Your Concise Guide to Find the Right Solution

Enterprise Resource Planning (ERP) plays a vital role in driving the growth of any organization. As a robust and reliable system, it integrates different business operations across various departments of your company. Be it finance or supply chain management, HR, or accounting, an ERP system can handle all the processes effectively. However, it is essential to get the right ERP software for your company. Here, an ERP evaluation process comes into the picture.

The ERP software evaluation process is a systematic, step-by-step approach for assessing different ERP systems available in the market. It is useful to determine the most suitable solution for addressing the specific needs of your organization. Evaluation of ERP systems can reduce the risk of potential challenges associated with the wrong selection. Companies can select an ERP software that offers maximum return on investment through a proper evaluation process.

In this post, we will go through ten major steps for ERP evaluation. But, before moving ahead, let’s go through the importance of ERP in modern businesses.

Importance of ERP in Business Operations

A feature-rich ERP software can act as a digital platform that offers a single source of truth to every enterprise. It offers valuable insights for improving the decision-making process and is useful for automating repetitive tasks. These are the major reasons for the growing popularity of ERP solutions in various industry sectors worldwide. It is expected that the ERP market will continue to show rapid growth to rise to USD 96 billion by the year 2032.

Apart from retail and manufacturing, other core industry sectors have started adopting ERP solutions to leverage its benefits. Though large companies account for a whopping 39 percent of the market share, SMBs are slowly increasing their share over the period. As several options are available in the market, companies must understand how to evaluate ERP software to get the right solution. Here we mention these important steps to consider.

Top Ten Steps for ERP Software Evaluation

The ERP evaluation process consists of the following steps-

Define Business Needs

This is the first and foremost step. You need to analyze existing processes in different departments including finance, accounting, sales, and procurement. This will help you find the pain points and challenges that come with achieving medium to long-term goals. You can determine the functionalities of an ERP system based on this analysis and find the right option.

Make Your Team

It is necessary to make a cross-functional team that has representatives of various departments like IT, finance, operations, and human resources. Moreover, you need to consider the user perspective when choosing the right ERP software. The diverse team from your company can help you ensure that you keep end users in mind while selecting the right ERP system.

Shortlist Potential Vendors

You need to conduct thorough research on potential ERP solution providers to shortlist them. You can consider product offerings like features, scalability, and integration capabilities. You can also research market trends and industry-specific choices of ERP software. Reputable analysts like Gartner can help you find the trend and vendor ranking for shortlisting potential vendors.

Develop an RFP

It is better to make a detailed Request for Proposal (RFP) for an ERP solution. The RFP outlines your organization’s specific requirements, evaluation criteria, objectives, and desired outcomes. You can include the scope of ERP software and set a clear deadline for vendors to give their proposals. A comprehensive RFP enables vendors to suggest the right solution.

Get Proposals from Vendors

When you get proposals from shortlisted vendors, you need to make sure that these proposals contain the necessary information. The proposal should have a detailed overview of the capability and functionality of an ERP system. It is also necessary to include implementation methodology, support, and training with other details in the proposal.

Opt for Demos

Most ERP vendors offer free demos for their ERP solutions. Yo;u can check the functionality and ask questions about the features, customization options, integration capabilities, etc. Moreover, you can also check ease of use and overall performance. Demos are also necessary for comparing available solutions from the perspectives of clarity and responsiveness of all vendors.

Evaluate Proposals

You need to analyze all the proposals that come from shortlisted vendors. You can check whether these proposals meet the criteria. You can compare proposals in terms of functionality, pricing, and implementation process. It will help you narrow down the list as you can give evaluation scores to all the proposals. This evaluation will lead you to finalize the vendor.

Ask for References

You can contact existing customers of the shortlisted vendors before finalizing one for your company. You can ask about the implementation process, system performance, and overall effectiveness of the ERP system. References can also give valuable information about vendor support and responsiveness to issues. You can also ask about the experience of customers.

Negotiate Contracts and Terms

This is another important step. Before finalizing an SLA (Service Level Agreement), you need to ensure that the vendor you have selected offers support and maintenance services. You need to establish timelines and milestones for ERP implementation before finalizing the contract. You can also finalize other necessary terms and policies before implementation.

Plan ERP Implementation

Finally, you need to build a detailed implementation plan. It includes project planning with the defined roles and responsibilities. You need to consider data migration and plan accordingly for your new ERP software. Your vendor can offer comprehensive training for all end-users and post-implementation support with regular maintenance.

Hope these ten steps of the ERP evaluation process will assist you to get the right solution for your company.

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Concluding Lines

An evaluation of an ERP system is a one-time process but needs careful planning and proper execution. Once you select the right ERP software, it benefits your company in multiple ways. It can increase efficiency and productivity by handling various functions across different departments. You need to consider market trends and shortlist ERP vendors who give the necessary training and post-implementation support with complete peace of mind.

SAP Silver Touch is a trusted ERP solutions provider. We assist you in identifying the most suitable and beneficial SAP solution for your company. You can drive the growth of your business with the right ERP system as we thoroughly analyze your specific needs. Contact us to learn more about the role of an ERP solution and how it benefits your company in multiple ways.

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