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Why ERP Selection is Important and How to Make It?

Enterprise Resource Planning (ERP) systems play a crucial role in the success of modern businesses. These software solutions enable organizations to streamline their operations, manage resources efficiently and make data-driven decisions. With so many ERP programs on the market, it’s important to figure out which one best suit your needs. In this blog post, we will discuss the importance of Enterprise Resource Planning selection. We will outline the ERP selection stages to help you make an informed decision.

- Why ERP Selection is Important and How to Make It? - 2024 -

In 2022, the global ERP software market is valued at approximately USD 55 billion and is forecast to grow 11% annually from 2023 to 2030.

Importance of ERP Selection

Choosing the appropriate ERP software for your business can have a profound impact on your organization’s productivity, profitability and long-term success. The programs that fail in implementation seem to be characterized by incomplete analysis of the process, failure to implement process improvement steps and incorrect scope determination. Therefore, the selection process is critical to ensure that the effort and budget spent are justified. When the right choice is made, a suitable ERP system will provide the following:

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Increase operational efficiency: ERP systems increase productivity and reduce manual errors by automating repetitive tasks and streamlining workflows.

Facilitates data-driven decision-making: The solutions consolidate data from various departments, enabling managers to access real-time information and make informed decisions.

Improves collaboration and communication: ERP software integrates different departments on a single platform, fostering seamless communication and collaboration between team members.

Ensures regulatory and compliance: A reliable system can help your organization stay up to date with ever-changing regulations and compliance requirements.

Increases scalability: As your business grows, a robust system can easily accommodate new processes, departments, and users, allowing for seamless scaling.

Given the significant benefits and long-term effects of implementing an ERP system, choosing the right one is crucial. A poorly chosen software can lead to lost time, increased costs and even business failure.

ERP Programs

Before entering the selection process, it is necessary to examine the different types of programs available in the market. ERP programs are software that allow businesses to manage many different business processes such as accounting, purchasing, sales, production, inventory management, human resources, marketing and customer relations in an integrated manner. 

In general, ERP solutions can be categorized as follows:

On-premises ERP: Installed and maintained on your organization’s hardware and servers, on-premises systems offer greater control and customization options. However, they usually require significant upfront investment and ongoing maintenance.

Cloud-based ERP: Hosted on a third-party provider’s servers, cloud-based solutions are accessible over the internet. They offer lower upfront costs, easier scalability and less maintenance responsibility. However, they may have limited customization options and require a reliable internet connection.

Industry-specific ERP: These systems are designed to meet the unique requirements of specific industries, such as manufacturing, retail, healthcare or construction. They have features and functionality tailored to the processes and regulatory compliance needs of that industry. While industry-specific solutions offer a more focused approach, they may lack the flexibility to adapt to business growth or diversification.

In Turkey, the majority of the market is made up of 3 ERP providers, but there are nearly 100 companies offering different solutions. When making a choice, it is critical to compare the needs of your company with the solutions of the ERP provider.

ERP Selection Stages

To ensure a successful selection, it is necessary to follow a systematic approach. The following stages will guide you through the process:

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Define your objectives: Start by outlining your organization’s goals and requirements. Identify the key challenges your business faces and determine the functionality you need from an ERP system to address these issues.

Create a selection team: Create a cross-functional team with representatives from different departments. This team will be responsible for evaluating and selecting the ERP system.

Research and shortlist vendors: Conduct a thorough research on available ERP software vendors. Consider factors such as reputation, industry expertise and product offerings. Shortlist vendors that align with your organization’s needs and budget.

Evaluate the shortlisted solutions: Request product demonstrations from shortlisted vendors. Evaluate each solution against your organization’s goals, requirements and budget constraints. Pay attention to factors such as ease of use, scalability, customization options and integration capabilities.

Check references: Reach out to other organizations that have implemented the ERP systems in question. Gather feedback on their experiences, including implementation, support and overall satisfaction.

Negotiate and finalize contracts: Once you have identified the best ERP solution for your organization, negotiate contracts and pricing with the selected vendor. Ensure that the contract includes all necessary details such as implementation timelines, support and training provisions.

Plan for implementation: Develop a comprehensive implementation plan that includes resource allocation, timelines, training and change management strategies. Appoint a dedicated project manager to oversee the implementation process.

Monitor and evaluate post-implementation: Once the ERP system is in place, continuously monitor its performance and assess its impact on your organization. Regularly assess its effectiveness in achieving your business goals and make adjustments as needed.

As Teolupus, we consider the following points in ERP selection consultancy:

  • Involve end users in the selection process to ensure user adoption and satisfaction
  • Prioritizing cyber security and data privacy, especially when evaluating cloud-based ERP solutions
  • Consideration of total cost of ownership (TCO), including upfront costs, implementation, support and maintenance expenses
  • Assessment of the supplier’s commitment to continuous innovation and product development

Contact us for expert support on preparatory work, good implementation methodology, best company practices, selection and installation, regardless of brand in ERP program selection.

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