The New Year is in full swing and we’re kicking off projects with mid-market manufacturers heading into ERP selection. We’re also talking with other companies about ERP success factors as they explore the launch of a first quarter ERP project.
These companies represent a variety of industries: process manufacturers such as food and beverage; Engineer to Order manufacturers; metal stampers and others.
Each of the companies face a specific set of business challenges and issues. While the circumstances are unique, our ERP consulting team begins the conversation by reviewing key ERP success factors.
5 ERP Success Factors
ERP project teams looking to better streamline ERP selection are wise to keep in mind the following success factors required to make a purchase decision.
- Features and Function: ERP selection projects must keep their focus on the ability of the software to meet the functional needs of the organization. Typically, a company will spend up to 80% of its time making sure that the software provides adequate coverage for an organization’s specific business functions.
- Cost and Contracts: An ERP system represents a major investment in capital expenses and resources. Given the magnitude of both direct and indirect costs (software, training, implementation and services), companies expend a good amount of time understanding and negotiating costs and contracts.
Once an organization considers these initial criteria, the selection team narrows vendors to a short list of the top contenders that can deliver appropriate features and functions, as well as deliver acceptable cost and contract terms.
The following risk factors make up the final determination:
- Vendor Background: Who is the ERP vendor you are buying from? Will they make a good partner? How many years have they been in business, and how many years has the application been sold in the market? Do they know your business? What are their prospects long term (are they positioned to be purchased or will they purchase another vendor)?
- Technology Platform: What is the underlying technology such as the database structure or delivery model? What direction is the vendor taking with this technology platform in coming years? Are they staying current? Do they perform well in the key areas of User Interface and Role Centers, Work Flow, and Business Intelligence?
- Implementation / Service: Will the implementation be led by a partner or directly by the vendor? Do they have experience in your industry? Who do you call when you have a problem during implementation? What is support like after “Go Live”? Careful scrutiny is needed here. A vendor might deliver excellent software at a competitive price, but is destined to fail if it is not implemented effectively.
ERP Success Factors: Your Next Step
In addition to outlining the success factors noted here, our team has gathered tried and true steps for manufacturers to effectively organize an ERP project.
Download the free white paper 7 Steps to Effectively Organize an ERP Project for a full look at this valuable information.