ERP Software | The five critical fits in software selection

ERP softwareFor companies in Australia the decision to make a leap to ERP software can be made easier by considering five key critical areas of fit – Functional Fit, Technical Fit, Organisational Fit, Implementation Partner Fit and Financial Fit.

Functional Fit

From the ERP software demonstrated will it fit with both current business requirements and also your future business requirements?

Supplier responses and demonstrations often spend too much time on “core” functionality and not enough time on the unique and strategic requirements of YOU, the customers. These are the requirements that generate a competitive advantage to your customers and your internal processes.

How much custom work will be required? Does the supplier have the correct skill to do this?

Technical Fit

Don’t get hung up on the Cloud as this is something we have been doing for years, but the IT industry has now introduced with hype as a way to sell more solutions! Two key areas need to considered:

  1. Internal technical audit – The internal technical audit should check the current state of your IT environment in such areas as current hardware, software, FTEs, and internal skill levels.
  2. External technical approach – Determine the technology requiremed by the ERP provider such as hardware requirements, database requirements, hosting offering (Cloud, SaaS, etc). Take the advice of the ERP provider to ensure your infrastructure is correct and don’t skimp on small areas that could improve performance massively. You don’t want a slow new solution!

This also is an important consideration in point five, the financial fit, below.

Organisational Fit

Often overlooked and underestimated, this will be critical to the success of your project. It is important to understand what changes your organisation must make internally to make effective use of the new ERP solution. Many customers fear change and few understand the amount of change that is required. Ineffective change management can be a barrier to success.

Implementation Partner Fit

The most critical component and which will have the greatest impact on the success of your ERP implementation is ensuring that the partner you choose fits!

Assuming you have made a good job selecting the software with the best fit to your organisation, if you cannot implement the ERP software then what is the point?

Make sure you have confidence in your implementation partner and that you can work with them through the long winding road. The key areas you should consider when selecting a partner:

  • Strengths & Weaknesses
  • Revenue, Number of consultants dedicated to ERP software vendor
  • Industry Focus
  • Target Customer Focus (Tier 1, SMB)
  • Software Product Knowledge
  • Implementation methodology – Sigma 6, Prince 2 etc – Is it proven
  • Thought Leadership (publications, presentations)
  • Partnership status with Supplier
  • Reference site calls

Financial Fit

Total cost of ownership across the expected lifecycle of the ERP solution including installation, training, implementation, maintenance, upgrades, hardware, ERP software, third party software, process improvements, etc.

ROI and the proposed gains will not all be realised in the initial implementation but over the expected life of the ERP solution.

Don’t invest in software that is too big and costly for the size of your organisation or the return gained. Very few Australian SMB organisations would require a tier 1 product such as SAP or Oracle.

These, in our opinion, are five key considerations in achieving your goals of implementing a successful and correct size of business solution for your organisation. This information is designed to assist in your success.

Kinetic wish you luck with whatever system you embark on.

Posted on December 17, 2012

Categories: MYOB Greentree
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