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Vital Steps for ERP Selection

While enterprise resource planning (ERP) software has improved significantly in recent years, many companies are not taking advantage of the full benefits these solutions can provide, according to IBM's Midsize Insider blog. In a recent study, software company IFS found that while resource planning is on the rise and ERP use is up, the complexity of many industrial manufacturing processes is too difficult for some software to handle efficiently, according to the blog post.

ERP selection can make or break a financial organization's ability to boost productivity and cut costs. When choosing the right solution, there are several steps to take to ensure positive outcomes.

Bring together your expertsWhile many companies believe that ERP implementation begins with the IT department, they should view it as a collaborative endeavor for department leaders across the organization. The ERP project team should consist of decision makers in accounting, operations, IT, purchasing and inventory as well as managing executives, according to software provider The Encaptis Group. This group of professionals should be responsible for researching, evaluating and selecting ERP, setting specific goals and objectives, communicating the ERP needs to organization members and working with the software supplier.

Keep in mind your company's unique needs
ERP is not a one-size-fits all. Decision-makers should keep in mind that each industry, especially finance, requires specific, tailored capabilities from ERP software. While generic fees may appear lower than those of specialized products, costs to upgrade and customize ERP can build up, according to Apprise Software.

It's important for companies to consider motivations for implementation, goals and desired outcomes, whether business processes across departments are standardized enough and what specializations ERP software will need to have for your business. These are just some of the topics the decision-making team should discuss.

Evaluate ERP options
Before considering which software to invest in, companies should define success and set up a system to measure it. The Encaptis Group suggests creating Critical Success Factors, or "the necessary elements for an organization or project to achieve its goals." Then, the ERP team should identify and rate the effectiveness of existing business processes. A thorough understanding of the current systems and employee activity allows businesses to pinpoint areas that need improvement. This knowledge gives companies the ability to confidently identify preferred solutions and develop a vendor list.

Selecting the best ERP partner for your companyOrganizations can search online, in journals and trade shows for worthy candidates, and request demonstrations for companies. Once the search has been narrowed to one or two candidates, give the providers the extensive information you've collected about your company's current processes and ask how they would handle ERP. Walk the decision-making team through each step. Keep in mind the costs associated with each software implementation.

Long-term thinking
According to Apprise, one of the biggest mistakes a company can make is not investing in ERP software for the long haul. Companies that spend extensive amounts of money on ERP should frequently monitor its progress and keep organization goals in mind. Ensure your organization's relationship with the provider is transparent to avoid hidden fees and costs.

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