A guest post by Nick Castellina, Research Director for the Aberdeen Group’s Business Planning and Execution practice. His enterprise applications research explores how ERP is used differently across industries, and how it can apply to all roles within the organization.
Finding a needle in a haystack is hard, but the task pales in comparison to finding a specific needle in a pile of needles. Selecting the ideal Enterprise Resource Planning (ERP) system from among the numerous options on the market can feel like just as daunting a challenge. ERP represents a serious investment for any organization and is vital to future success. As such, a great deal is at stake.
The ERP selection process should be regarded as a top priority, with appropriate time and resources devoted to it. Top performing organizations approach the selection process with a clear plan in mind and come away with solutions that implement smoothly and help drive business immediately. Further, those that get the most value out of ERP choose a solution that can support them through business change and as they continue to grow. On the other hand, less meticulous organizations become saddled with solutions that continually disappoint, put additional strain on the organization, and often need to be replaced.
In many of my past research surveys, I asked survey takers to indicate the selection criteria they choose when selecting ERP. Functionality and ease of use always come out on top.
But while these two selection criteria are integral to selecting a solution that fits your organization today, neither of these criteria are necessarily permanent.
Functionality may no longer be adequate as your organization’s needs change, and a system that seems easy to use today may feel clunky in comparison to newer, upgraded solutions over time. In fact, a recent study of mine asked survey takers to indicate the reasons that they replaced their old ERP system (Figure 1).
Three of the top four reasons concern solutions that are no longer able to support the business. Maybe it does not have the features needed to continue to operate effectively; maybe it is unable to support connections with emerging technologies, or maybe it can no longer handle the business due to explosive growth.
Regardless of the reason, what is the point of paying maintenance on an ERP solution that can no longer support the business?
Figure I: Is it Time to Replace Our Enterprise Resource Planning System?
But replacing an ERP can be expensive and disruptive to the business as well as carry a lot of risks. Organizations could be better off staying on the latest version of their solution (the Best-in-Class are 61 percent more likely to be on the latest release), as well as doing necessary tailoring themselves.
For this reason, Best-in-Class organizations are 83 percent more likely to have a solution that can be quickly tailored to reflect business change. Therefore, flexibility needs to be a top criterion used when selecting an ERP.
This flexibility expands an organization’s ability to grow, support new business models, remain compliant, and take advantage of emerging technology. My research has uncovered numerous benefits from selecting an adaptable solution. I have also uncovered many tips on how to take advantage of this flexibility to become a more effective organization.
I would like to invite you to attend a webinar that I am presenting on June 9 at 10am EDT / 3pm BST in partnership with IFS to hear some of these tips. Register for the free webinar now. I hope you can make it.