Best Practices for Choosing ERP Software

By Neil Zawacki
Updated: September 06, 2011

Best Practices for Choosing ERP Software

ERP (Enterprise Resource Planning) software has become a staple of the modern business world. It allows a company to quickly share information between departments and manage fixed assets and inventory. This article will provide some of the best practices for choosing ERP software.

You should start by looking for ERP software that meets the following criteria:

- It can handle multiple types of currency (U.S. dollars, euros, yen, etc.)
- It has a strong security system with encryption procedures.
- It can handle a high data load without performance degradation.
- It has a modular and customizable structure.
- It can perform data exchange with XML and EDI.
- It has a fast and flexible reporting system.
- It can log all the activities that are performed by users.
- It supports mobile devices.

The next step is to determine the total cost of ownership for the solution. This is more than the price of the software – you need to take into account the annual fees for system upgrades. If you don’t have an IT department, the cost of technical support and ongoing maintenance should be factored in as well. It could turn out that the overall cost is much greater (or cheaper) than you originally realized.

The ERP software vendor’s standing in the business world is another matter to take into consideration. For the most part, you should look for a provider that is still acquiring new customers on a regular basis. A vendor that primarily subsists off maintenance fees is much more likely to go out of business in a faltering economy and leave your company without access to technical support or system updates.

You should also ask the software vendor for at least three references. This will give you a chance to talk with other small businesses and see how well the solution worked out for them. If the ERP vendor does not want to provide references and tries to steer you towards case studies or unsourced quotes, it’s not a good sign – you may want to just move on to another provider.

One final step is to ask the ERP vendor for a free demonstration of the software. You can use the opportunity to try out different configurations and determine how flexible the system truly is. You’ll also be also to test the special features and see whether or not they’re worth the additional price. You may have to go through the process a few times if you’re not fully satisfied, but you should be able to find the best software for your company in the end.

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