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How to Evaluate an ERP System

An enterprise resource planning (ERP) system is an important component of any forward-thinking organization because it helps to integrate and streamline processes for improved productivity and a better customer experience. With a reliable ERP system like the SAP Business ByDesign enterprise planning solution, you’ll have better control over important processes in your business to ensure that everything progresses smoothly and without delays.  

But how do you choose the right ERP system for your business? This is one of the most common questions that every business owner asks when they want to implement an ERP solution into their business. 

What Is an ERP System?

An ERP system is a platform used by organizations to manage their day-to-day operations, including procurement, supply chain management, and project management. If you are looking for effective ways to optimize supply chain operations, an ERP is one of the best solutions. 

But how does an ERP system help supply chain optimization? It does so by streamlining all channels of communication between departments and branches within an organization, eliminating data silos.

Using Internet of Things protocols, an ERP system updates data from multiple sources in real time, preventing communication holdups that can easily cause delays and misunderstandings. ERPs help you integrate multiple business processes for a free flow of data from different sources.

How to Assess an ERP System

ERP systems are designed around well-defined data structures with shared databases. Therefore, the data shared across different departments in your company will be normalized because it will be based on a common definition and user experience. These concepts are integrated with business processes and workflows across all departments. In short, an ERP system is a vehicle that integrates people, tools, and processes across an enterprise.

When you are evaluating an ERP system, make sure it has all the necessary features and functionalities to help you achieve the integration. Some of the key features of modern ERP platforms that you should look out for include enterprise-wide integration, real-time data updates, shared databases, and consistency. In addition, below are some other important considerations to keep in mind when evaluating the merits of a system.

Total Cost of Ownership

Apart from the initial startup investment, there are other expenses you have to consider to get a clear picture of the total cost for the system. These include hardware requirements, future improvements, cost of implementation, training, and consultation fees. Considering all possible costs will help you choose a system that won’t break the bank.

System Requirements

Make sure you understand what kind of ERP platform your business truly needs before you begin the implementation process. Otherwise, you’ll end up spending money on a system that might not have the functionalities your business demands. It’s important to ensure you understand the current and projected trajectory of your business, as well as its business plan. That way, you can choose an ERP system that will continue to support your goals and objectives as it grows.

Peer References

Industry peers who have already implemented an ERP solution can be a great resource because they have personal experience with their system and fully understand what works and what doesn’t. Ask them for recommendations and advice on the ERP system best suited for your business. Make sure you seek advice from people who are willing to share their first-hand experiences, lessons learned, and the challenges of using a specific ERP solution. This will give you a real-world perspective and possibly save you a great deal of time.

Deployment Flexibility

A good ERP system will have well-defined deployment options–this ensures that the system you choose easily adapts to your business processes. For instance, if you choose a cloud-based system, it should be able to meet your current and future needs. You can also choose an ERP system with hybrid deployment options that is ideal for both cloud and onsite deployment.

Lastly, it’s important to understand that the evaluation process varies from one organization to another because each business has unique needs and practices. Choose a system that matches your specific needs and processes.


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