How to Prepare an Organization to Select ERP Software

When organizations decide to implement ERP software, they often jump right into ERP selection without taking the time to prepare. They assume they can select the right technology by simply evaluating software features and benefits.

However, there are many activities that should precede ERP selection. Before starting to think about ERP vendors or perusing top ERP systems lists, consider focusing on these seven activities:

Ensuring Organizational Alignment

The key to a successful ERP selection is ensuring that stakeholders across the organization understand and agree with the organization’s strategy objectives. Then, decide how much technology is needed to achieve objectives, such as improving the customer experience, creating new business models or generating new revenue.

Developing a Business Case

What business benefits are expected from the new ERP software? What are the expected costs? Knowing the answers to these questions is critical to justifying an ERP investment when executives ask about ROI. To really win them over, one should outline exactly how new technology will enable the organization’s strategy objectives.

Mitigating Change Resistance

Once, the decision is made to implement new ERP software, employees have to be informed. By evaluating the organizational culture and employees’ openness to change, one can develop an organizational change management strategy that helps employees embrace change.

Defining Business Requirements

Many organizations do not have clearly-defined processes, but as they embark on their ERP project, they realize the necessity of business process mapping. Documenting current business processes helps to prioritize functional requirements and identify opportunities for improvement.

Transforming Business Processes

While some processes may only need incremental improvements, processes related to the competitive advantage may need a complete overhaul. This is an approach to business design that focuses on breaking down functional silos and providing end-to-end process understanding. It involves thinking about the purpose of each process and the hand-offs between functions. Ultimately, this approach builds process efficiencies that will guide in selection of ERP software.

Understanding Deployment Options

Complex organizations that need heavy IT control, gravitate toward on-premise deployment, while organizations that need less control generally outsource their IT functions. Here’s some of the deployment options: Cloud​ ERP; SaaS ERP; On-premise ERP; Hybrid​ Cloud; Managed Services​

Developing an IT Strategy

In addition to deployment options, there are several other IT strategy decisions to make before ERP selection. For example, to determine an integration strategy – do the organization want a single ERP system or several best-of-breed systems? While best-of-breed ERP systems can help build competitive advantage, they also create technical complexities, integration challenges and data issues. Many organizations implement single ERP systems since they enable standardization, which can reduce change resistance. However, single ERP systems don’t allow you the flexibility to choose the best software for each of your functional areas. This means need more software customization, which is costly.