For manufacturers and distributors, there are few projects as critical as selecting and implementing a new enterprise resource planning (ERP) system. A successful ERP project can bring a multitude of benefits like streamlined operations, increased productivity and a wealth of data insights to drive your company forward.
But the wrong software solution can bring unexpected challenges, wasted resources and could disrupt your operations. In order to reduce the risks of selecting the wrong ERP system and going through a failed ERP implementation, it’s critical to ask the right questions to find the software and ERP vendor to make your goals a reality. Here are the essential questions to ask an ERP vendor before starting your project.
1. Understanding Your Needs
What are our business requirements?
Let’s start at the beginning. In order to select the right ERP solution, you need to review your current state to evaluate any gaps in your existing business processes, areas for improvement, and the pain points with your current enterprise software systems. Take stock of your goals for the new ERP such as improved inventory management, integration to or replacement of your financial software, or better data insights. Develop your list of requirements around these needs to help evaluate the capabilities of the software vendor to align with your goals.
How does your ERP system cater to our industry-specific needs?
As a manufacturer or distributor, your needs may differ from companies in other industries. For example, you’ll need to find out if the prospective ERP can support complex supply chain management, industry-specific regulation and quality compliance, or production planning and scheduling. A software vendor with industry experience might be able to address these challenges for effectively.
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2. System Capabilities and Features
What core functionalities does your ERP solution offer?
Next, you’ll want to ask about the system’s core functionality. These might include financial management, granular inventory control, order processing or robust customer relationship management (CRM). Ensure that the system includes your essential operational needs without extensive add-ons or customization.
How customizable is the ERP system?
Speaking of customization, ask about the ease-of-use when it comes to customizing the system for your workflows and naming conventions. Are there standard dashboards included, and can they be customized for your needs? What happens if changes need to be made in the future? Understanding the options for customizing the solution will help you decide if the system is a good fit now, while also being agile enough for your future needs.
Can the system integrate with our existing software?
You’ll need to make sure the new ERP can integrate with your existing systems such as e-commerce solutions, accounting software or other platforms. Smooth integration with these systems eliminates data silos, keeping your ERP as the system of record.
3. Implementation Process
What is the typical implementation timeline?
In order to set realistic expectations, you’ll want to ask about the typical timeline for implementation. Get an idea of contingency plans if there are challenges along the way. Plus, if customization will be needed, ask how this will impact the timeline. Does the timeline include testing? If so, how long will that process typically take? Does the implementation time vary for cloud-based versus on-premises implementation?
What is the implementation methodology?
Structure is key to a smooth implementation process. What are the key milestones along the way, and the deliverables at each phase? Understand what will be involved for each stage: planning, design, configuration, testing, training, and go-live.
Who will be involved in the implementation?
It’s important to have an idea of the personnel resources required for the ERP project. During the implementation process, what roles and responsibilities will fall to your internal team, the vendor’s team, and any third-party implementation partner?
What training and support do you provide during and after implementation?
For end users, moving to new ERP software can be a substantial change from existing systems. To ensure successful ERP adoption you’ll need to help your team learn the new system. As part of the change management process, what training resources will be available to your team during and after the implementation? Whether through online videos, one-on-one training sessions, or written documentation, understanding on-going support will help ensure long-term success and help your team manage the change.
4. Cost Considerations
What is the total cost of ownership (TCO)?
Beyond the initial software cost, it’s important to understand the total cost of ownership. Ask the software vendor for a breakdown of costs. These may include license fees, implementation costs, and maintenance fees.
Are there any hidden costs?
Additional costs could arise during or after ERP implementation. These could include hardware like servers or networking devices, data migration, additional user fees or future upgrades. Upfront awareness of these costs can prevent being caught off-guard later.
What is your pricing model?
Common pricing models for ERP software include perpetual licensing, subscription-based pricing or usage-based pricing. With perpetual licensing you pay an upfront fee, and you can use the software indefinitely. However, you are responsible for maintenance, including updates. In contrast, subscription-based pricing is applied on a monthly or annual basis and includes maintenance and updates. Finally, the usage-based pricing model is determined by how much you use the software, usually based on a per-user, per-month basis.
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5. Vendor Reputation and Experience
Can you provide references or case studies?
For a first-hand take on what it’s like to work with the vendor, request a few references, ideally from businesses that are similar to yours. Case studies and references can shed light into the vendor’s effectiveness, along with any challenges that occurred and how the vendor addressed them.
How do you handle customer support and service?
Having access to reliable customer support is critical to addressing questions or issues and avoiding downtime. Ask about the vendor’s options for on-going support after the ERP implementation. How can they be reached if there’s a critical issue and what is their typical response time? Is 24/7 support available? What are the methods of contact?
6. Future-Proofing Your ERP Investment
How often do you release updates and new features?
Regular software updates are necessary for stability, security, and ongoing improvements. But there are some key factors to consider. First, find out how often updates are released. You’ll also want to know if installing updates will require significant downtime or other disruption to your operations. It’s also important to know how future updates will affect any customizations you make to the software. Finally, find out if updates are included, or if additional fees are required.
Is your software scalable?
Will the software meet the needs of your future business growth? Ask how the ERP solution allows for scalability. You’ll want to know if it can accommodate more users, increased transactions or new functionality as your company grows and business requirements change.
What is your vision for the future of your ERP solution?
You’ll also want to ask how long the vendor plans to support the software. Are they committed to functionality improvements, security updates and customer support for the long-term? You don’t want to be caught with an end-of-life notification shortly after you’ve completed implementation.
7. Data Management and Security
How is data migration handled?
Data migration is one of the most important—and challenging—pieces of any ERP implementation. Find out how the vendor approaches the process of transferring data from your current systems to the new ERP solution. A detailed data migration strategy helps ensure data accuracy and minimizes disruption.
What security measures do you have in place?
ERP security is dependent on a number of factors, whether you use a cloud ERP or an on-premise solution. Ask about the vendor’s security standards including encryption, access controls and data backups, as well as any industry-specific regulations which may apply to your company (e.g., HIPAA, PCI DSS).
8. User Experience and Interface
How intuitive is the user interface?
A new ERP won’t be much use if your team won’t use it. One thing that could help ensure smooth end user adoption of the new ERP system is a user-friendly interface. Ask if you can view a demo or use a trial of the system to evaluate the user experience. You’ll want to see if the system navigation is intuitive.
What mobile capabilities does your ERP solution offer?
With more employees working remotely, mobile accessibility becomes a must-have feature. Ask if the ERP system allows users on-the-go access. Mobile access can boost productivity and avoid delays in decision-making or customer service responses.
9. Performance and Reliability
What is your system’s uptime guarantee?
The last thing you need is your ERP system going out, resulting in lost sales, production delays and customer satisfaction issues. Many software vendors have Service Level Agreements (SLAs) that specify uptime percentages, with an availability goal of 99.9% or higher.
Conclusion
A modern ERP is critical for driving growth for manufacturers and distributors. but finding the right software solution can feel overwhelming given the number and variety of ERP providers in the marketplace. But asking the important questions outlined here can help narrow the field to the ERP software that aligns with your company’s unique business goals, so you can make an informed decision.
Ultra Consultants can help guide your ERP selection process, finding the best-fit technology platform to drive next-level performance. From business process improvement, to selection, implementation and value realization, Ultra delivers true digital transformation from the factory floor to the back office. Put our decades of experience to work for you by requesting a free discovery call today.
