Five Finger Rule for Selecting ERP Software

One of the most daunting problems faced by organisations in adoption of an Enterprise Resource Planning software is selecting the right software.  This article discusses the five finger rule that has to be followed in the selection process.

Rule 1 – Best Practices & Processes

The ERP softwares can tremendously improve an organisations performance by introducing the best practices in the industry.  Hence when you are looking out for an ERP software find the best one that has the industry best practices. It will not only make the implementation faster, but also keeps your business processes slick and lean.

Rule 2 – Technology

In the ever changing world of technology the selection of ERP softwares should be done with careful evaluation of the technologies used. Technology Obsolescence is inevitable but it can be delayed by careful selection of the ERP software.

It will be hard to maintain if an ERP software with age old technology has been adopted. Also it gets difficult to obtain hardware and associated components in future, resulting in high cost of ownership.  Further, investments on the hardware equipments will not be useful if an obsolete technology has been adopted.

Most of the existing ERP softwares like SAP & Oracle eBusiness Suite are built on obsolete technology and have failed to upgrade attributed to the complexity of change.  It require urgent attention from these software vendors.

The new generation ERP softwares have an advantage of using the latest technology available currently.

Rule 3 – Cost

When assessing the cost of an ERP software, the cost of acquisition and cost of maintenance are to be considered.  The cost of maintenance includes the cost of licensing, cost of the hardware and cost of staff required for maintenance of the software.  Keep in mind the below:

Old technology = high cost of maintenance

SAP/Oracle/IFS/Peoplesoft = high cost of acquisition and maintenance.

Rule 4 – Upgradeability

The commitment of the ERP vendor to upgrade the software timely is a deciding factor in selection of ERP software for an enterprise. The Software OEM should be willing to invest time and money in adding industry best practices to the ERP product.

It is often found that the software vendor focus only on the sales and support leaving the software to fall prey for obsolescence.  In addition to that the future technological obsolescence needs to be taken care of.
Rule 5 – Business Knowledge of Implementer

Business knowledge of the implementer is an often ignored criteria in ERP software selection.  The most common single reason for a failed ERP rollout is the implementors capability and knowledge of the business environment where the product is implemented.


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