The right ERP software can save your company significantly or introduce additional headaches that you and many others throw up your hands and walk away. Staying in that “win” column primarily comes down to how you choose your platform.
While you know that you’ll need to shore up an extensive list of vendors and KPIs, there are a few other considerations that can help manufacturers select the right ERP software.
ERP software has three of those steps to consider and use.
Match software to production type
In the ERP software world, your specific type of manufacturing will be treated differently by software solutions. Discrete and process manufacturing often treat raw materials differently at each stage in the process. Your ERP software will need to be able to understand these needs and provide the corresponding capabilities such as supporting the purchase of a liquid in pounds, inventorying it in pounds, but measuring it in ounces or liters when used.
Process manufacturers also tend to QC test batches of materials before, during, and after production, so the ERP they choose should support this function as well as track related quarantines or disposals.
Get industry-specific demos
Take your software selection process to the next level by asking vendors for ERP software demos that closely align with your business processes and industry. ERP systems should match both your production method as well as your industry focus to protect your business and give your company the best chance at a positive ROI.
This step is immensely important for highly regulated industries. Compliance isn’t just a checkbox in an RFP document; it should be something your team can see with its own eyes. Include the IT department in these demos to ask the right questions about capturing and sharing data so that you don’t throw up barriers to getting your necessary reports out on time.
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Determine the total cost of ownership
Manufacturer margins are feeling the squeeze lately, and the push to leaner operations throughout your supply chain ensures there are many eyes on how you use your software budget. For ERP software in general, many projects go off the rails and can fail because they expand significantly beyond the scope and planned budget.
To protect your business you should select an ERP that you can afford and is more likely to give you a positive return. There is some variance in what you can expect to pay for ERP software per user depending on a multitude of factors, including business size, industry, and more, according to the latest ERP software research. Whatever your final budget figure is, you should make sure that you create a total cost of ownership for at least the next five years. Don’t forget that your ERP software total cost of ownership is more than just the software cost.
Your budgeting and RFP processes need to look at all of the ways an ERP software can introduce costs. Start with the basics such as software and per-user licensing fees, then move on to common elements like training, maintenance packages, and the upgrade or update lifecycle costs.
After you understand the software’s expense, ask about your costs for implementing it. This should involve discussions on hardware and infrastructure requirements, customizations for your business, a list of when you’ll be charged additional fees for growth (such as adding components or sites), and more.
The vendor is as crucial as the ERP software
The three selection steps we noted are critical to a successful launch, and they’re a terrific way to judge another vital aspect of ERP software selection: finding the right partner. Bring your questions and needs to vendors and pay attention to how they respond. You need a company that is helpful when you have an issue before and after the selection process.