How to Choose the Best ERP System for Your Business
Find the best ERP for your business with our guide to evaluating systems and setting your requirements.
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Companies need accurate, consistent, real-time data to give them the advantage necessary to gain and maintain a competitive advantage and ensure they grow and develop. A key component in achieving this central source of dependable, actionable data is an ERP system. But how should you evaluate an ERP system and why should you buy one or upgrade your current system?
With so many software solutions out there, it’s vital that you find the right ERP solution for your specific needs.
What Is an ERP system?
ERP stands for Enterprise Resource Planning (ERP) and refers to the system brands use to manage daily business processes. Modern ERP solutions can cover a myriad of things, including:
- Accounting & finance
- CRM
- Ecommerce
- Supply chain management
- Procurement
- Marketing
- Analytics & business intelligence
- Production control
- Project planning & management
- Risk management & compliance
- HR management
Some systems can offer customisable dashboards and comprehensive reporting functionality in line with your company’s requirements.
Whatever the size of your company, implementing an integrated ERP system can improve your productivity levels.
Having multiple, disparate systems can negatively affect staff, knocking morale and segregating departments.
This can lead to breakdowns in communications, and an increase in duplication errors hampering the smooth running of a business.
Modern ERP solutions can not only boost your business’s success but can also bring about a much happier working environment with tangible productivity increases.
Benefits of Investing in ERP Software
There are numerous reasons to invest in a new ERP system, including:
1) Cross-company functionality
An ERP system runs across and touches many company processes and functions. It’s not just a solution for the finance and accounting department.
It has a shared database which can be accessed and utilised by the sales, HR, marketing, warehousing and distribution teams.
This creates much better synergy, allowing every business process to run smoothly.
2) Centralised data
Having just one source of accurate data makes it easy for companies to make decisions – and make them faster.
This isn’t so easy for companies that rely on spreadsheet accounting, or which can’t access up-to-date figures.
Companies that want to maximise opportunities, sales and profit can ensure they have the best information to act upon by selecting the best ERP solution for them.
With the ever-changing nature of the world right now, from the Pandemic to the latest Cost of Living Crisis, brands need to have access to the most up-to-date information at all times so that they can make objective decisions.
3) Time-savings
ERP software can automate many processes, meaning much less manual effort is required. This frees up staff time and gives employees ready access to the data that can help them quickly respond to customer queries. This increases productivity and creates more space for creative operating.
4) Cost-savings
While there is an upfront cost to investing in a new ERP solution, by streamlining numerous tools into one new system, you won’t be paying multiple implementation costs.
Additionally, if you have an enterprise resource planning system that’s cloud-based – like NetSuite – then you’ll remove many of the costs associated with infrastructure, plus the costs of maintaining IT equipment internally.
5) Increased revenue opportunities
Investing in an enterprise resource planning system can bring in additional revenue in several ways.
Firstly, having accurate stock information ensures better inventory management and confirms that customer demand is being consistently met, which in turn promotes customer satisfaction and increases loyalty and retention.
Additionally, an ERP system will identify which products are the most profitable and can improve cash flow and demand forecasting.
6) Improved business efficiency
Your business will be more effective with ERP software thanks to how it promotes cross-functional collaboration between teams, automates and improves processes and brings real-time business intelligence across the organisation.
This all promotes better decision-making – both at the strategic and tactical levels. There’s no longer the need to pool data across the organisation, or to build new spreadsheet scenarios every time a new strategy or tactic is up for consideration.
With the right ERP software, companies can quickly decide which products to sell, in which markets, and at what pricing and use the time saved through automating processes to continue driving the business forward.
How to Pick an Enterprise Resource Planning System
When investing in or upgrading your system, it can be difficult to find your way through the many different ERP applications available out there. Here’s our advice when starting out on your buying journey:
1) Choose a solution that can grow with you
Purchasing an ERP system for your company should be a long-term investment; it would be a mistake to choose a solution that suits you now, without considering your potential future business requirements.
You don’t want to end up replacing the system in two years’ time because you have reached a user limit or because you can’t add the functionality you require.
As your company grows, so will your number of employees, as well as the number of partners, vendors and suppliers you work with, so it’s vital that you choose a solution that’s scalable.
It’s also a good idea to choose a solution that can offer extended functionality if and when it is required, such as eCommerce capabilities, advanced financials or advanced inventory management.
And if you have plans to become an international company, we recommend making sure that you can add global capabilities such as multiple languages and currencies.
2) Pick a solution that can be tailored to your business
The right ERP should be customisable to your needs.
Many, or most, ERP implementations are out of the box and will not fit in 100% with your operations so it’s best to find one where you are able to pick and choose the functionality you need.
It’s worth finding out if the ERP vendors you’re talking to offer any industry-specific solutions that have already been optimised for your sector.
Finding more flexible ERP systems means you are only paying for what you actually need, and not for features that you will never use.
A good solution will also allow you to add more functionality over time if and when it is required.
3) Look for reporting and analytics tools
One of the key benefits of using ERP systems is that it gives you access to key information from across your entire organisation.
This means you should be able to locate and report on any type of data you need from any department quickly and easily.
You should be able to easily create accurate reports on key aspects of your business such as financial projections and customer satisfaction.
Also, you should have access to historical data and key trends over time that allows you to react quickly and remain competitive.
This information is only of true value when you’re able to view it clearly and easily, in the way that you need it. So the right ERP system should have easy-to-use dashboards, reporting and analytics tools.
4) Choose an ERP that integrates with your CRM
A good ERP solution will allow you to manage your entire business with a single solution, and this includes customer relationship management (CRM).
Good customer management has become much more complex. As well as new buying channels emerging and customer habits changing, people now expect a much higher level of service than they used to – and this goes for buyers in both the B2C and the B2B sectors.
Customers expect you to know who they are, what they’ve ordered in the past, how much they paid, their payment terms, what products they’re interested in, and more.
Fragmented systems mean a lack of visibility at the point of contact with the customer. You need a solution that can bring together data from your sales, marketing, customer service, order management, billing and finance departments.
This is why it’s important to choose an ERP that comes with CRM functionality included, or one that can integrate easily with your existing CRM.
5) Choose an ERP that is secure
When you are using a piece of software to store vital business information such as financial and customer data, you need to be confident that it’s safe.
When you choose an on-premise solution (more on this later), it’s up to you to look after data privacy, encryption, intrusion detection, password policies, etc. So make sure your IT department is up to the task.
When you choose cloud-based software, all of this is taken care of for you. You get to benefit from enterprise-grade security which includes all the latest protections, updates and patches. However, be sure to check the vendor has the appropriate security certifications and procedures in place.
The next step when choosing a new ERP for your business is to consider the type of partner you need to ensure your business operates more effectively than before.
How to Choose an ERP Provider
Once you know what you’re looking for in a new software solution, you’ll need to find the right vendor that will work with you to help you meet your business objectives, rather than installing your solution and walking away.
Consider the following:
1) Look for potential software vendors that will provide an implementation partner
Many vendors are focused on the installation process and don’t tend to provide a long-term, ongoing relationship that can optimise your use of your ERP.
This is where a partner comes in.
A partner takes care of many of the technical details for you, helping provide peace of mind that your project will be a success. Choosing a vendor that offers a full implementation process can help in the following ways:
- Reduce disruption to your business – your partner will have the experience and know-how to help make the project go as smoothly as possible.
- Offer ongoing training & support – guaranteeing your business receives the right level of training and support to help you and your staff make the most of your software, for as long as you need it.
- Provide software health checks – a partner can regularly review your company’s use of the technology to make sure it’s meeting your business goals, and suggest ideas for improvement.
- Recommend functionality extensions – they can provide advice on how to extend the functionality of the software and recommend customisation strategies.
2) Look for a provider that will offer training
High-quality training is hugely important. If your staff, the actual users, don’t know how to use the system, then they are more likely to be resistant to the change and unwilling to use it properly.
It also means they will make more mistakes, and then you’re not going to get the results you are looking for.
That’s why training is so important, so make sure either your vendor or your partner can offer this as part of the service. Also, find out if this is offered on an ongoing basis.
3) Beware of vendor lock-in
One thing to watch out for is vendor lock-in. You don’t want to be stuck with an ERP product you’re not happy with and that doesn’t support your business applications.
Make sure you find out what happens at the end of the contract. Could you easily move your data out of the system if you wanted to? Does the vendor have data migration tools to help with this? Don’t forget to read the small print and ask about hidden charges.
How Do You Know Which Is the Best ERP for Your Business?
The right ERP system for one company may be entirely different for another. Here are some reasons some of the companies that have chosen us were looking for new ERP software products.
While this isn’t an exhaustive list of reasons why companies want to incorporate their current business processes into one streamlined tool, one or more of these may resonate with your business needs and help you know what the best ERP software looks like for your business:
You want to improve communication and collaboration
Implementing an ERP system opens up communication channels in an organisation, allowing staff to share ideas and collaborate on group projects. This can help break down both social and professional barriers and promote cross-functional working.
Achieving a high level of unity across departments – such as Finance & Accounting, Sales, HR and Marketing – requires these teams to be able to work well together. An ERP system ensures that everyone is working on the same, unified system and has access to a single database of information.
Information is pivotal to business and sharing that information gives a better experience for all – staff, suppliers, partners and most importantly, customers.
As well as promoting more harmonious working across departments, the management team gains a better insight into projects and can more closely track how the company budget is being spent and whether KPIs are being met.
If you’re interested in this, take a look at NetSuite SuiteProjects.
You want to reduce manual processes
Manual data input and processing can be tedious and mundane. Having staff undertake this sort of activity can take a long time and decrease staff motivation. It can also lead to costly mistakes.
Our ERP solution eliminates a huge amount of manual input. The system is capable of performing repetitive and mundane tasks automatically, freeing up time for your staff to concentrate on more important work, and helping them to be far more productive.
You want to streamline multiple systems into one interface
Having multiple systems in use by different departments can cause problems for staff accessing the systems.
It’s also time-consuming and costly to train staff on multiple systems. In addition, sickness and annual leave can sometimes mean that others need to access a system they aren’t used to or had any training on so that a task can be completed in a timely manner.
If your business runs a single system, all employees can be trained to use it at the same time. It is then simple for everyone to perform many different tasks as the interface is the same.
Take a look at our Training and Support services that ensure all staff can access and use our ERP software easily.
You want remote access across devices
Not everybody is in the office all day, every day, especially in a post-pandemic working environment. But whether your staff are out and about or working remotely, information can be harder to come by when you’re not in the office.
Remote access to data is vital, and it’s key that users should be able to log on to computer systems from any tablets and mobile devices.
For example, salespeople that need to update a client’s details on the go don’t always want to rely on carrying around a laptop or waiting until they get back to the office to make a change on the system. Being able to access your systems from a mobile phone or tablet makes things so much easier.
With NetSuite’s ERP solution, changes can be made quickly and it’s simple to look up some information on the go. On top of this, your staff can access the system from home, via just an internet connection and a browser, rather than having to go into the office and use software that is only available onsite.
Remote access also makes it easier for your employees to work outside of normal hours. This makes it easier if you plan to implement a flexible working scheme to provide a better work-life balance to your employees.
You want to increase warehouse productivity
An ERP application can help you to improve productivity in the warehouse. By tracking warehouse KPIs, you can see where you can improve efficiency and productivity. You can also track and assess order picking accuracy, on-time delivery rates, cycle count accuracy and more.
With warehouse management functionality, an ERP optimises your stock holding, ensuring you don’t have cash tied up in excess inventory. It can also ensure stock accuracy and help you better organise, handle and pick your stock. This increased efficiency makes for a more productive wholesale distribution operation.
How Do You Evaluate ERP Systems?
An investment in a new system can only come after a prudent evaluation process. This may include:
- Building a use-case scenario
- Examination of expected ROI
- A fair degree of internal checking and validation
With so many features available and differing strengths and weaknesses of varying ERP systems, it can be a complex process to define which software might be right for your business. Here are some considerations that will help you through the process.
1) Establish the project framework
The first stage necessitates deciding who should be involved and what your desired goals and time frames will be. Setting specific project goals is also vital in ultimately ensuring a successful implementation.
2) Scope out your requirements
Decide which functionality you want to incorporate into your new ERP system. Perhaps start at a high level and drill down as you go.
Some companies will put together a request for information (RFI), which can be submitted to each software provider so they can determine which solution best meets your needs.
3) Evaluate potential ERP vendors
Beyond the ERP software itself, it’s important to evaluate prospective vendors too. You will want to consider implementation costs and customisation fees, as well as how well your ERP partner can service other needs, such as technical support and training.
4) Ask for references
It’s also important to check references, testimonials and case studies to ensure the suitability of an ERP consultant and supplier.
You could also request customer references to find out how the actual implementation has worked and how the software vendor has responded to challenges or problems. If you go down this route, here are some questions you could ask:
- How did the project go in terms of timeframe, budget and objectives?
- How smoothly did the implementation go?
- How well does it integrate with their other systems? (their CRM, for example)
- How easy is the software to use?
- How have their staff adapted to the change? And are they all using it?
- Have they received high-quality ongoing training and support?
- How many users do they have using the system? And have they been able to add new users easily?
- Was their system customised for their business in any way?
- Have they been able to add new functionality easily?
- How useful have the reporting and analytics tools been? And have they been able to adapt based on these?
- What tangible benefits have they experienced since implementing the software?
- Would they choose the same vendor again?
5) Understand the different options available to you
Before you make your decision, make sure you understand all the differences between on-premise, hosted cloud and true cloud solutions:
What Does ‘On-premise’ Mean?
‘On-premise’ means the software is purchased and installed on your own servers at your business premises. Some companies prefer on-premise software because they like to keep a tight control of their operations and they have an experienced IT department who can look after all of their IT, and keep their data secure.
Of course, the downside with on-premise software is that you are responsible for the maintenance, security, software upgrades, etc.
With cloud software, all of this is taken care of for you. If you are looking for any-time, anywhere access, flexibility and automatic upgrades, then the cloud is the way to go:
What Does ‘True Cloud’ Mean?
With ‘true cloud‘ the solution is designed and built from the ground up for the age of the internet; they are accessed via and work seamlessly on all browsers and devices.
They are flexible, customisable and are built to cope with large numbers of users with no drop-off in performance.
What Does ‘Hosted Cloud’ Mean?
‘Hosted cloud’ is an application that has typically been built to be on-premise, but has been reworked so it can be delivered online.
Whilst these do come under the definition of ‘cloud’, hosted solutions are often less flexible and trickier to upgrade than true cloud solutions.
Read more about this in our related article Beware of ‘Fake’ Clouds.
6) Deliberations
This stage will take all the information you receive from each ERP sales team and evaluate it against your requirements.
When making your decision on which is the best ERP system for your company, you may want to consider:
- Project implementation times
- How closely the ERP software can be customised to your needs
- How well the ERP vendor understands your industry or if they have experience working with companies similar to yours
- Who you will manage the project from your side and the supplier’s side and if you believe they will work well together as a team
- How easy the software is to use and what training will be required
- How your data will be migrated from your old systems to your new ERP system
- How flexible the platform is
- What updates and maintenance will be required and how easy they are to undertake
- What the costs will be for implementation, annual licences or subscriptions, training and maintenance etc.
You could even implement a scoring system to help you make the most practical decision.
7) Final checks and decision
When you’ve whittled down a shortlist of enterprise resource planning system providers, the last stage of the ERP selection process involves carrying out a cost-benefit analysis and ROI projections associated with ERP implementation.
You want to be as sure as possible that there will be a positive outcome when you weigh the value that a new system will deliver for your company against the costs and risks of implementing one.
The business case for an ERP can be evaluated by examining how well the problems you have can be addressed by a new system – and how quickly.
It might be that you will immediately see a return due to having a faster month-end close, for example. But other benefits might only be seen in the longer term – such as productivity improvements that can’t be fully realised until everyone using the system is trained.
Find Out More about NetSuite’s ERP Solution
With the evolution of modern technology and the demands of running a business, implementing an integrated, cloud-based ERP solution like NetSuite ERP could help your business work smarter, harder and faster.
A good enterprise resource planning (ERP) system is key to successfully managing and integrating all of your core business processes. It should allow you to run your entire business with a single system.
To discover how an ERP system can boost your productivity, book an appointment now or contact us today for a free business consultation or a quote.