ERP Guide: Select The Right ERP Software

What Is ERP Software?

Enterprise resource planning (ERP) software helps companies streamline business processes and manage company data by integrating them into a single system. A wide variety of ERP solutions are available, including industry-specific products, different deployment options (on-premise, cloud), and a trio of tiers that caters to the complexity and size of the business involved.

It can be difficult to determine the type of ERP system that will best serve a business. TEC’s ERP Resource Center aims to help with initial research, including valuable information about ERP types, costs, and trends. We also cover ERP evaluation, implementation, and plenty of ERP product reviews. All resources are impartial and designed to enrich the knowledge of company decision makers.

One of the most common questions asked about ERP solutions is, “How much does an ERP system cost?” Most companies want to understand the ballpark price range, what variables may affect pricing, and how much the ERP implementation stage might cost. The complexity of ERP systems, the limitless number of variables specific to each case (such as the number of users and degree of customization), and the way ERPs are implemented increase the effort to pinpoint baseline ERP price estimates. As well, many ERP vendors, especially large software providers, don’t publish any numbers.

However, with years of experience in the field, TEC has established some guiding principles, ballpark ranges, and helpful insider knowledge so that you can estimate the cost of an ERP system for your business.

Our ERP Pricing Guide explains how ERP pricing works. It discusses key costing and budgeting variables, implementation methods, and the relationship between ERP tiers and price. As well, our real-world ERP pricing case studies are excellent resources for anyone looking for ERP costing examples.

A recent TEC survey asked 39 ERP experts from across North America their opinions about everything from emerging technology to pragmatic ERP selection advice, including budget, timeline, and ROI advice. See what the ERP experts had to say about effectively budgeting for ERP software and for maximizing your ROI on your next ERP software purchase.

ERP has evolved considerably over the decades with advances in deployment options, database structures, user interface designs, features, functions, and integration methods. Technology trends have influenced the ERP market, driven by both user demands and advances like mobility, the Internet of Things (IoT), and Artificial Intelligence (AI). Most ERP vendors work hard to integrate new technologies and respond to shifting business requirements across all industries and verticals. This makes for a very competitive environment.

Important trends in the ERP industry include cloud vs on-premise deployment, AI, robotic process automation (RPA), open-source ERP, and wider platform options. Understanding ERP tech trends will help you determine which types of innovation will create the most meaningful improvements in your business, and narrow down your search for the best-fit ERP.

Open-source ERP, a software package whose source code is freely available for use and modification, is an option that may be suitable for companies with unique or rapidly changing requirements. Learn about open-source ERP for your business.

Another option for ERP software is the development of ERP platforms, where software functionality is built atop of a platform layer of services. Read TEC’s article on differences between single, integrated massive ERP systems and rising ERP platforms and find out what the ERP experts say about the future of ERP.

Companies considering a new enterprise software solution need to learn about evaluation, selection, and implementation approaches. Our resource center includes topics that cover all aspects of adopting a new solution, from start to finish.

It’s wise to start with an assessment of your general business processes, your medium-term strategic aims, and your system infrastructure. Read TEC’s Guide to Enterprise Architecture Review to learn more.

ERP Selection Process:

Subjects covered in our resources include who should be involved in your ERP selection project and how to determine your business requirements. You’ll also find info on how to evaluate ERP solutions, including pointers on handling the request-for-information (RFI) process, software demos, and contract negotiations.

Learn about common pitfalls to avoid during selection, and why your company may want to partner with TEC or another impartial consulting firm to save time and money and ensure ERP success.

Assembling Your Team

Establishing the right project team is the first essential step to ERP selection success. In our experience, most companies include too few perspectives, seeking to contain what feels like an overwhelming process. But you can (and should) involve representatives from most key areas of the company. The trick is assigning roles and managing the scope and timing of each role’s involvement.

• Who Should Participate in Your Enterprise Software Selection?

Determining Your Needs and Assessing ERP Products

It can be tedious to document your company’s unique business processes and needs and then translate those into functional ERP requirements. But getting this step right is paramount. It can be done far more easily with the help of a business requirements document, or request for proposal (RFP).

An ERP RFP is a thorough list of the software features and functions you can expect to find in a good, full-suite ERP system. These feature-and-function lists help you verify your requirements and eliminate the items you don’t need. Later, the same master document can be used to collect support data from ERP vendors, compare competing solutions, and manage ERP vendor demos.

Our other ERP selection resources round out the picture on how to approach requirements and evaluation:

Benefits of Partnering with a Business Software Consultant

Most people opt not to buy a home without the insight and experience of a good real estate agent. It is the same with enterprise software purchases. These are long-term investments with significant costs. As well, ERP sales reps are well versed in the process and negotiation terms while their customers usually are not, resulting in a precarious imbalance.

It makes sense to bring in a partner with a proven approach to helping clients get the right business software at the best price. A third-party with your best interests in focus can greatly mitigate risks and save significant time and money.

• Benefits of Impartial Software Advice When Selecting Enterprise Software
• 4 Ways a Software Research Firm Can Help Ensure Software Selection Success
• TEC Customer Success Stories

ERP Implementation

While an ERP selection project may successfully identify the best-fit product, your ROI is determined by the success or failure of the implementation stage. For this reason, an experienced and reputable implementation consultant is well worth the cost—a minor expenditure that can result in major savings.

Learn more about what an ERP implementation involves, common challenges, and expert tips for success:

Find out what ERP experts say are the top software selection and implementation mistakes that companies make and read about real-life customers’ experience with ERP software implementation projects:

• Customer Satisfaction Reports (reviewing vendor and reseller implementation performance)