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A Buyer's Guide to ERP Solutions
ERP Software Buyer’s Guide
Used by thousands of companies across the globe, ERP or Enterprise Resource Planning will not only increase the revenue and profitability of your business, it will also make your people technologically smarter. ERP delivers higher scale of automation. It integrates all business processes into a single system that offers synchronization of data. Supply chain, HR, order processing, manufacturing, support services, accounting, customer relationship and more; ERP streamlines all the processes of these functional areas of your business.
Ask a corporate executive about the top ERP vendors and he can instantly name two or three of them for sure. If there is one business solution to invest on, choose ERP. In this Buyer’s Guide, we at ITQlick.com will brief you on the right acquisition steps to consider for ERP solutions. Whether you already have the system in place or just about to buy one, learning the smart ways in buying ERP solution will give your company tons of benefits in the long run.
Types
The evolution of ERP system has been so fast that while most companies are just on the peak of enjoying the capability of this system, new and better versions keep on coming year after year. Let’s have a quick review. SAP R/3, Microsoft Dynamics AX, JD Edwards EnterpriseOne, and Oracle e-Business Suite Financials are among of the top ERP solutions in the market in the last five to ten years. But the question today is: are they for your business or could there be other better brands? A good way to answer this question is by understanding first the types of ERP solutions.
There are two broad classifications of ERP:
Horizontal ERP and
Vertical ERP. Horizontal ERP can be considered as one-size-fits-all solution. Why? It’s because the top horizontal ERP solutions, which we just mentioned above, can be acquired by any company of any size in whatever industry. Vertical ERP are industry-specific solutions. Meaning, if you’re in a pharmaceutical industry, your products, services, and information are in many aspects unique. A dedicated system is required for synchronizing processes related to them.
Another classification of ERP system is by method of deployment. These days, trade-offs between accessibility and efficiency can already be considered as half-way solved. With the advancements in ICT, a manager today can check if his weekly sales went up while driving his SUV along the country side on a Saturday afternoon. Now, check these different ERP deployment models and figure out which one is right for your business.
On-premise
ERP is running on your own server at the location of your choice. Your IT team handles its overall operation and maintenance.
Hosted
A third party (host) will provide the servers. The software is provided by the ERP vendor. You will run the system at its full capacity.
Public Cloud
Public cloud is owned by a third-party and since its “public”, there are other companies, other than yours, whose ERP is hosted in the same cloud. Cloud-based ERP usually doesn’t require your IT team anymore.
Private Cloud
Usually, your ERP solution provider is the same provider of the cloud servers or cloud infrastructures. You have your cloud-based ERP exclusively running in a private cloud network.
Hybrid
There are multiple platforms that run your ERP system. This is utilizing the private connection between platforms to distribute your workloads to the optimal environment.
Features
An ERP package is consisting of different modules that are equivalent to the functional areas or departments in your organization. ERP solution providers employ the so-called “depth of functionality” in their ERP package. It means that the ERP solution can be readily adapted by the client to support a wide range of operational execution specifics. This and four more basic features below are what you should investigate in-depth in an ERP solution.
Core Modules Availability
These core modules are the Financial Management, Human Resource Management, and Customer Relationship Management.
Wide Range of Integrated Functionality
Other than the core modules, these modules must also be available: Manufacturing, Inventory & Material Management, Sales and Distribution Management, Supplier and Purchase Management, Plant Maintenance, Excise Management and more.
Integration Capabilities
ERP implementation is a “Change Management” approach. It is the method of introducing to the organization a new system that will replace or refurbish the existing system. Some organization wants to retain their existing systems (also called legacy systems) by integrating it with the newer ERP system. ERP solution capable of this integration process is a must-sought after solution for your business.
Customization Capabilities
Although there are “as is” ERP solutions, a lot of ERP vendors offers customizable ERP. In a technical perspective, customizing an ERP is equivalent to altering the codes, interfacing other application programs, and changing some of the built-in architectures. Open-source ERP is the best example of a customizable system. It allows programmers and developers to alter the code in the software to customize for their specific needs.
Solutions per Business Size, per Vendor
When buying ERP software, there are three important factors to analyze first before proceeding with the vendor selection process. They are as follows.
Business Size
Mid-size market players like Epicor and Infor offers versatile and lower TCO on their solutions. Microsoft Navision and Axapta software are best recommended for SMEs. SAP and Oracle, both of which are top grosser ERP vendors, are for large enterprises. Identifying the right vendor base on business size can definitely save you time and resources.
Deployment Model
Epicor, Infor, and Microsoft Dynamics are leaders in on-premise solutions. Netsuite, Plex Online and Glovia are notable cloud-based ERP solution providers. Compiere and OpenBravo are among of the best open-source ERP solution providers. Identifying which of these providers can provide optimum security and 24/7 up-time is equivalent to putting your business in a winning situation.
Period and Degree of Implementation
Process preparation, configuration, customization, extensions, and data migration are part of the ERP implementation process. Enterprise software solutions usually require a year or two to implement. Cloud-based solutions are mostly subscription-based and require lesser time to implement; about a month or two for SMEs. If you are keen to these implementation details, you are giving your business the opportunity to prosper while change management is still on-going.
Pricing Considerations
The Total Cost of Ownership (TCO) is what matters most when we talk about the price of ERP solutions. Let’s go over to the most important points when calculating TCO.
Type of Business and Number of Users
It is always important to remember that the number of users and the functions that are included in the ERP solution are factors that affect the price.
Third-party software add-ins
If you’re planning to integrate third-party software into your ERP system to boost its functionality, that’s additional 10-15% of the overall software cost.
Implementation Cost
There is a significant cost on top of the ERP implementation process. The ideal software cost to implementation cost ratio is 1:1.
On estimate, the TCO of ERP software solution for mid-sized businesses is around $150,000 to $750,000.
We at ITQlick.com offer assistance to ERP buyers like you in finding the right software solution for your business. Our business solution experts are always ready to give you honest advice. Tell us your pricing considerations and we will be glad to help you in any way possible.
Market Trends
Getting informed with the latest trends in the ERP industry can give you more insights on finding the right solution for your business.
The competition between Tier 1 (for large enterprises) and Tier 2 (for mid-market businesses) vendors is generally tough at present. On the positive side, this situation gives Tier 2 vendors the opportunity to improve more their offered ERP solutions. What this mean to buyers like you is that you could see more quality solutions at a considerable price in the near future.
Mobility of ERP is the talk-of-the-town. Development of mobile ERP apps and interfaces is the focus of many ERP vendors today. We will see lots of smarter ERP features on our mobile devices anytime from now. Relevant to this, also expect the BYOD (bring your own device) era to come into the business world.
Another trend to watch for is the introduction of social collaboration feature in many ERP software solutions. Big data is on the rise and what to expect on this are more automation features, integration of business intelligence, and better API’s to be seen on future ERP systems.
ITQlick chart - 2023 best ERP Software
Finding the right ERP software for your business
Proper ERP software selections are the precursor to successful deployment and business growth. Finding the right ERP solutions doesnít have to be complicated, and it doesnít have to take days or weeks of your time.
After researching over 5,000 systems, we can identify the best solution for companies of all shapes and sizes. ITQlick.com is 100% free for software buyers.