Having asked ‘What is ERP’ and what it can do, the question that comes naturally after is how to select which solution is right for my small business or organization. The options are numerous and there is in fact an entire business ecosystem around this specific question. That includes consultants, resellers, and companies that help you decide and/or implement the solution for you. It’s a huge subject but we’ll try to cover the basic criteria for choosing ERP for your business to get you started.
Regardless of the specific nature of your small business, there is a number of general criteria that you need to consider and apply in pretty much all cases. So here’s what you should take into account as a small business owner when looking for the ideal ERP for your needs.
Features
Obviously, whatever ERP you choose needs to cover the basic aspects of your business requirements. Your choice will be different if you want to make your inventory management more efficient. Compared to wanting to better handling your customers and sales leads. Moreover, if you want to improve how you work in both fields. It’s important to prioritize your goals. Most of the best solutions out there, focus on doing only one or two things well. Mostly those that are targeted to small and middle-size businesses. So, the main feature they offer should match your goals as closely as possible. Note that having more features than needed might sound like a good thing, but in reality, it adds unnecessary complexity. That could lead to an increased learning curve (and drives hidden costs higher).
Data Visualization & Export
Can your ERP generate a printable report of all interactions with customers, suppliers, affiliates, etc? How about aggregate data graphs or end-of-month/year reports? What level of detail of how your business works can the ERP provide? Again, simplicity but also completeness in data visualization is key to understanding your business in a snapshot. Therefore it should be one of the main criteria for choosing ERP for your business. Can you easily share this information among employees? Also, if you decide to ever change systems in the future, is your information locked in the current ERP?
Usability
Another important feature is the ease of use of the software. Do you and your employees have to undergo lengthy training to learn and change the way they work? Or is the solution so well designed that you’ll hardly ever need a manual? The abundance of solutions out there makes this particular criterion potentially the decisive factor. The ERP with the shallower learning curve usually prevails over the ERP with the most features. This is especially true in very small businesses.
Security
When using ERP your crucial business data are stored in a foreign place. For that reason, you should be sure that proper encryption and security measures are in a place where necessary. While there should be as much security as needed, it shouldn’t get in the way of usability. You should ‘buy’ to the extent that you need it. For Instance, there’s more reason for it if you know that in the past a competitor has been after your data.
Data Import
It’s important to consider, how and to what extent will you be able to import your existing data into the new system. Especially if your business has been running for a few years now. It’s important to consider the current format of your data. How well organized and easy to process they are. To what extent you’ll need to manually edit the data. All of that mostly in order to be able to start to actually work with them.
Maintenance
Once the new system is in place, it’s not the end of the story. You will now have to consider how much will it cost to maintain it. Also, in what way it can be upgraded to include further features or needs that will arise in the future. You should also consider hardware equipment and additional licenses you might need. Other than that also a backup scheme in case of a disaster is always recommended. Hosted or Software-as-a-Service solutions usually offer this out of the box. That is mostly useful to small business owners so they do not have to deal with upgrades, maintenance, and installations. All that is needed in the latter case is a web browser and an Internet connection.
Diversity
Apart from the above points, there are a number of other features. Most of them are easy to forget but can largely limit your solution if left unchecked. Most likely the system needs to support multiple currencies (e.g. in its reports) or have product tracking capabilities. Furthermore, there might be industry or business-specific individual needs that must be covered in your particular case. Finally, governments or institutions might require that certain regulations are met. Therefore, if your system doesn’t support them then it is of little use.
Cost
Of course, once you have an idea of what you’re after, then comes the crucial criteria for choosing ERP for your business. It’s the issue of how much does it costs both, to begin with, but also in the long run. Usually, the core spend is a function of the users (or machines) the software will be installed for but other costs may also be involved.
So How Should You Begin
In this article, we went through the major features that you should consider while choosing ERP for your business. Of course, there are many other criteria that you might need to consider, that are specific to your business model. Moreover, another important distinction might be whether the ERP will be installed on your computers or whether it should run on the cloud.
Cloud ERPs are a great solution for many smaller businesses. Mostly because the demand for hardware is low and the software is adaptable to your specific needs. If you are considering a cloud ERP that is easy to use, focused on customer support, an individual approach, and a good value for investment, you might want to check our free trial of Megaventory management software.
Dimitris Athanasiadis oversees Operations and Customer Relations in Megaventory.