by October 6, 2010 0 comments

An enterprise comprises of various departments like Finance, HR, marketing etc and each department essentially works on independent business applications like an HRM, a CRM solution, etc. Almost all mid-sized to large enterprises today have an Enterprise Resource Planning (ERP) solution, that integrates information used by multiple departments from not only a single but also multiple company sites, into a single management control system. An ERP solution is meant to ensure seamless information flow amongst different departments, avoiding data duplication and giving the organization a unified view of data spread across various silos and providing greater visibility into business processes across an enterprise. Such a centralized database in turn saves an enterprise costs and time and enables quick information retrieval, facilitates analysis and intelligent decision making for the management.

Why choosing the right ERP is important?
An ERP solution is the backbone of any enterprise and is mission critical. Also there is a huge investment of time and money, associated with purchasing an ERP solution, its implementation and the related change management within the organization. There are multiple things that need to be considered prior to choosing the right vendor, during implementation and even after it.

The wrong choice of a business application has the potential to seriously affect the entire business itself. With so many vendors in the market, the process of evaluating the right ERP becomes even more challenging for the IT decision makers.
Making the right choice

Before obtaining an ERP solution it is important to not only keep in mind the modules that have to be integrated at this point of time as well as the modules that would have to be included as the enterprise grows. We talk about some of the key points that a CIO should keep in mind before deciding on an ERP solution:

1. Study system requirements: The first step for any organization set to deploy an ERP is to put down System Requirement Specifications (SRS). It is often seen that the system requirements study is not done properly by organizations. If sufficient time is not given at this stage for preparing the SRS, it later leads to chopping and changing of program codes after the ERP goes Live. This is cumbersome and often leads to an ERP failure.

2. End-user comfort: The most important thing to be kept in mind is that all business applications provide best results when end users are at complete ease while using the system. So, the first thing to evaluate with any business application is the application’s interface for end-users. If the decision maker is convinced about it, then the post-implementation part of convincing and training end-users to move away from legacy systems becomes easier. Generally, change-management is the biggest challenge that organizations face in the post-deployment phase and evaluating the user interface eliminates this is in the first instance. Also conducting dummy transactions on practice databases to get a feel of the comfort level is highly recommended.

3. Migrating data from legacy systems: An enterprise’s legacy systems hold all critical data. While looking out for an ERP solution provider it is important to evaluate the vendor’s capability to enable migration of current data on legacy systems to the new system, in a hassle-free manner. It should also provide means for checking the integrity of this data before the system goes live.

4. Customization: Today the market offers ERP systems that have features supporting specific verticals, say a manufacturing industry or a fashion industry or even footwear. Though such off the shelf solutions are available, there is always need for customization them to your organization’s specific needs. It’s important to evaluate whether the ERP solution is flexible enough to be easily configurable and able to accommodate future business requirements.

5. Ease of integration and accuracy: An ERP system is meant to integrate different modules across departments into one and it is of prime importance to evaluate how easy or difficult this integration is going to be, and the amount of vendor support that would be provided. It is also critical to understand how accurate and efficient the ERP system is. These issues can’t be figured out by just speaking to vendors. It becomes important to speak to organizations that are users of the solution being evaluated to get the real picture.

6. Security: An ERP system deals with critical information and it is important to secure the system from threats within an organization. With many enterprises exposing data on the Web, security concerns are escalating. Apart from a stringent authorization mechanism, the system has to be protected from hackers or other malicious applications. What has the vendor to offer along these lines is another thing that enterprises need ask while evaluating the solution.

7. Post-implementation support: Along with evaluating a solution for an organization, it is equally important to evaluate the needs of business partners who shall be using it. Another important criterion is to evaluate for technical support, as problems may arise post-implementation. It has been seen that many times, post-implementation support is not upto the mark and organizations feel challenged with virtually no support. You should directly speak to the existing clientele to understand their needs.

8. Investment: It is not just that obtaining an ERP license involves costs. The post-implementation support, maintenance, change management, infrastructure, etc also involves expenses. So, while evaluating a particular solution, it is required that along with the upfront cost, a detailed analysis of costs that an organization would have to incur after the implementation should also be taken into consideration.

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