We wrote a blog post awhile back highlighting some key questions to ask when comparing ERP systems.
The post opened up with a favorite quote: “You can’t get the right answer till you ask the right question.“
These wise words certainly apply to an ERP selection project.
The three questions included in the archived post are not an exhaustive list, but instead provide an effective way to begin the ERP selection process.
Today, we again consider the most effective ERP questions to ask an ERP vendor, with an emphasis on total cost of ownership (TCO). These questions are particularly relevant when options such as a software as a service solution or hosted ERP are under consideration.
Questions for ERP Comparison
When we team with our manufacturing clients, we usually group ERP system questions into important categories and then guide the selection team through an “apples to apples” comparison.
From a TCO perspective, the analysis considers IT acquisition costs, costs of deployment, implementation, maintenance fees, support, backup and security systems, customization and configuration, data integration, user adoption and other areas.
In addition to these direct costs, we take the time to consider indirect costs such as required resources to manage information systems and a data center, if needed; the energy and space required for a modern data center, and any necessary capital investment in physical hardware and communications equipment.
We also suggest manufacturers consider the opportunity cost tied to all of their expenses and especially to capital expenditures.
Considering The Solution Platform
Many times, a selection project compares systems that are delivered through a variety of platforms – whether on site, co-located, hosted or delivered as a cloud solution.
In that case, we make sure to consider the assignment of costs for each of the scenarios. As an example, we put a special focus on whether the vendor or the manufacturer is responsible for costs in these areas:
- Software updates
- Physical location (server room)
- Disaster recovery
- Communication lines between facilities
Again, asking specific questions addressing each of the areas noted above clarify which party is responsible in terms of resources, costs and ownership. It’s all part of Ultra’s ERP education process, a valuable service that delivers critical insight to manufacturers.
Asking the right questions can certainly make ERP selection more effective.
For additional insight, see Ultra’s library of ERP selection white papers.