ERP Buyers Guide: Shortlisting Your Requirements
Have you decided to take the step to move towards a new ERP system for your business? This can seem a daunting task when you’re not sure what to expect, trawling through supplier websites, contacting numerous providers, and knowing that investing the wrong system can cause wasted time, money and energy. These days, organisations of all shapes and sizes rely on ERP systems for the efficient running of their business, but choosing the right one is not a decision that should be taken lightly.
Whether you plan to upgrade an existing system or are evaluating ERP software for the first time, there are many areas that you need to take into consideration. In the ERP Buyers Guide Series, we’ve condensed what we think are the top considerations to make when choosing the right ERP system for your business, and today, we are going to focus on requirements.
Understand your Business Needs and Processes
Look at your business processes as a whole, and how each department within your business function. It is a good idea to document and summarize your current processes - both at what you currently do, and if there are any areas which you would like to change, or create efficiencies in. Drafting a summary flow chart will enable potential ERP providers to have an immediate understanding of your end-to-end process.
(For example, create a flowchart of the sales order process, including order entry, credit approval, picking, packing, shipping, invoicing and payment collection.)
This will help identify bottlenecks, redundancies and any manual tasks that could be automated or improved. Many ERP systems can be customised to fit your business needs, so the more information you can provide from the beginning, the easier it will be for you to select a system that suits your requirements.
List Down the Requirements
After looking at your business processes, now is the time to make your ‘shopping list’. Make a list of all of the requirements you would like the system to meet, you can use your process maps to support this but also look at which processes will be affected by the ERP implementation. This includes areas where the current system fails or is inefficient, or processes which you know will need to change due to changes in your business or industry. Highlighting pain points, or future requirements will ensure your provider will know that these areas are important to you.
Categorize Requirements Based on Importance and Impact on Business Operations
To find the best fit ERP for your business, it is a good idea to break your requirements into 3 categories.
Must-Have or Critical Requirements:
Description: Essential features without which the ERP system would not be able to function effectively.
Example: General ledger, accounts payable/receivable, inventory management, order processing, payroll management.
Good to Have or Important Requirements:
Description: Features that enhance the functionality and usability but are not critical for basic operations.
Example: Advanced reporting and analytics, mobile access, CRM integration, supply chain management.
Nice to Have or Optional Requirements:
Description: Additional features that provide extra convenience and efficiency but are not essential.
Example: Social collaboration tools
Anticipate Future Business Requirements
An ERP system should be considered a long-term investment into your business. It is important to consider not only where your business is currently at, but also your long-term goals and visions. This will help ensure that you are provided with an ERP system that can grow with your business. Sitting down to identify and document any potential future needs and growth plans will help your provider to understand your business.
It is important to ensure that the ERP solution can scale to accommodate growth and change. For example, verifying that the ERP system can handle an increased number of users and higher data volumes without performance degradation.
By systematically categorizing your ERP requirements, you can ensure a comprehensive evaluation process and make an informed decision that aligns with your business goals and priorities.
ERP Features Most Businesses Use
While most ERP solutions contain many modules that provide businesses with flexible, extensible software to run their operations on, the core features found in most ERP implementations include:
Finance and accounting for tracking accounts payable, accounts receivable and managing the general ledger. This module also creates financial statements, including income statement, balance sheet and statement of cash flows, as well as automated invoices, payment receipts and tax statements.
Customer relationship management (CRM) for tracking customer activity, managing sales leads and converting prospects into customers.
Human resources management for consolidating and managing employee information and providing employee self-service.
Order management for tracking orders from placement to fulfilment.
Inventory management for SKU-level inventory tracking.
Production management to plan and manage manufacturing production runs and supply chains.
Procurement, for sourcing goods and services.
Once you have understood the core features which a system offers, you can then start investigating any additional features the system can support. This will allow you to start shortlisting systems based on your requirements, leading from your critical requirements, following down to your nice to have requirements.
Consequences of not fully understanding your requirements.
Businesses that spend the time understanding and outlining their requirements at the beginning of their ERP journey, have a much higher chance of selecting an ERP system that will provide them with greater benefits and results. If this work is not done on the outset, it can result in a poorly selected ERP system, leading to you spending money on a system which will not deliver the control, efficiencies and ROI that you expect.
With that being said, we cannot stress the utmost importance of taking the time to fully understand the requirements and outcome you expect from the implementation of an ERP system. However, if this feels daunting to you, this is also something that some implementation partners can help you with. If you want to find out more about how NetSuite can meet your requirements, or get help with mapping and understanding your requirements, get in touch today by clicking the button below, and we’d be happy to help you.