QuickBooks is renowned the world over as an outstanding small business accounting package. It’s no wonder that QuickBooks is the #1 best-selling small business financial software, recommended by three out of four accountants. Even so, no matter how capable a software package QuickBooks may be, it’s primarily aimed at small businesses and at some point, you’re going to outgrow the software and exchange it for a full-fledged ERP system. So what should you look for? What factors should you consider?
Versatility
One of the areas where a true ERP system surpasses QuickBooks is in its ability to manage more diverse business assets. As businesses grow, they may acquire other companies or split into multiple divisions or have greater degrees of separation between the various parts of the company. A good ERP system provides the tools necessary to manage a diverse, and continually diversifying, business.
Local or Cloud
Another important consideration is whether to install locally or go with a cloud-based system. Each has its own advantages, depending on the particular features you value. A local install will generally have a higher upfront cost, but lower ongoing maintenance fees. A cloud-based install, on the other hand, has much lower upfront costs, but higher maintenance fees. While you must choose the option that is right for your business, it is important to select an ERP that offers the option your business needs.
Customization
To succeed in today’s marketplace, companies must adapt and adapt quickly. Many companies are in niche industries not easily served by off-the-shelf software. In either case, nothing will be accomplished by moving from QuickBooks to an ERP solution that is equally limiting.
If keeping up with your industry’s changes is like hitting a moving target, you need an ERP system that is designed from the ground up to allow in-house customization and configuration. Some ERP systems, such as Dynamics NAV, are specifically designed to allow easy extensibility and customization.
Reporting
Another area where ERP systems surpass QuickBooks is the depth of available reporting. To determine if a potential ERP solution meets your reporting needs, you need to evaluate what your reporting needs are.
What information do you need to retrieve? What analytics do you need to access? What trends will you need to monitor over the next five years? All are important factors to consider when choosing the right system.
Integration
An ERP solution is only a solution if it helps ease workflow issues, not compound them. If your business relies on specific software, such as Microsoft Office and Outlook, picking an ERP system that integrates with your existing software can save you both time and money.
Vendor Analysis
A significant, but often overlooked, factor to consider is the health of a prospective vendor. No matter which installation option you choose (such as local or cloud-based) moving to an ERP system is a significant investment, in time, money and resources. It’s important to choose a vendor that has a reputation for innovation, being able to adapt to changing circumstances and the financial security to be around for the long haul.
“You should also appraise each company’s commitment to its products. Inquire about the vision of the company and its products,” says Adam Golden and Dawn Scaiano, writing for TechRepublic. “Find out what percentage of revenue is spent on research and development. Look at the company’s record of introducing new products. Is it historically ahead of, or behind, the technology innovation curve?”
There are many aspects to consider when choosing an ERP solution. By taking the time to consider the above factors, you can select an option that will save you time and money, while helping your business grow to the next level.
ERP Photo via Shutterstock
Aira Bongco
I hope Quickbooks has a bigger version. It is just not easy to switch especially if you have already taught your employees how to use a certain software.
Some excellent points. I would add that some of the most overlooked areas we see are including staff in the evaluation process to obtain their input – and equally important – to obtain their buy-in. Software migrations are rarely easy, and that buy-in will be critical. Another is the actual software selection process itself. Many companies start calling vendors, who give them their standard demos and decisions get made based on that rather than the company’s specific needs.
We find a selection process that first identifies company requirements, then obtains vendor responses to those, with demos reserved for the best fit vendors, optimizes everyone’s time and results in the most educated decision.
Companies may also want to ask whether your selection consultant has compensation relationships with the vendors involved.
An ERP implementation done well results in significant productivity improvements and is worth the time, money and energy invested. Timely reporting to run the business is often drastically improved, as the author mentions. The ability to connect to websites for sales can increase revenue. In general, profitability increases.
Emily
Good advice, ERP and its tools have good advantages and versatility in business. Companies should make use of ERP modules to manage different functions. I work with McGladrey and this piece on ERP security will interest readershttp. http://bit.ly/mcgldrysapaudt
Thanks for acknowledging these great tips, It will surely help me a lot in order to choose the right ERP solution for my Business. Actually, it’s all about versatility and a Right ERP will provide you.
Clearly, these are only a few of the factors that need to be taken into consideration when asking the question, “How do I choose the right ERP?” However, I believe that they are some of the most important considerations that should be made by every organization looking to invest in an updated enterprise software system.
Here are some step which you must consider while selecting an ERP solutions service provider:
Generate a list of key requirements, before you start your search for ERP solutions provider
Choose the solution provider that could be utilised across tablets as well as smartphones
Choose the option which it easy to update and help in preservation of custom features
Consider the reputation of vendor
Measure the potential business benefit which each module will offer after integration.