How to: ERP Assessment in 6 steps.

Implementing ERP is not only an investment; but also a time-consuming and intense task. Getting through such an implementation successfully requires planning and assessment. By conducting an ERP assessment and review procedure, you allow yourself to identify weaknesses and address them before they become an issue. In addition, an ERP readiness evaluation is a step you shouldn’t skip to estimate how ready you are for such an intensive and significant change.

Why should you do an ERP assessment?

As it’s such a big step to take, both organisational and financially, you want to make sure the deployment for your ERP is successful. In order for it to be effective, you need to define your ERP’s functionalities and asses the entire process.

For the assessment we can differentiate between working with ERP for the first time or upgrading your current ERP solution.

If you are new to ERP, you might want to identify any software or current systems that will become redundant after your ERP implementation. Or to evaluate which current infrastructure needs adaptation before installing ERP, to calculate and assess the total cost of ownership, to estimate your time frame in which implementation is possible and pinpoint possible reasons for delay.

When you want to upgrade/update your current ERP solution you want to evaluate the current programs, areas of improvement, how your business’s growth has impacted the system and to calculate costs and benefits of opting for a new and improved ERP solution. 

Is your company ready for ERP implementation?

When is it time to implement ERP? Well, there are a few questions you can ask yourself to estimate whether or not it is time to start looking for to streamline your operations.

• Do we have enough transparency in our operations?
  If your operations lack real-time data and reporting it will be tough to make decisions that are substantiated with data and often result in complex operations that could be simple when using ERP.  
   
• Do we use systems that don't support us because they no longer fulfil our needs?
  Does your company use countless software systems that don’t seem to meet your needs anymore? Then, it might be time to switch to an end-to-end solution.
   
• Do we miss opportunities, simply because our operations aren’t ready to act upon them?
  If your systems don’t meet your needs, those opportunities will slip through your fingers, as your production processes aren’t ready to scale up rapidly.
   
• We want to expand globally, but our current systems don’t allow it?
  Well, this speaks for itself. If your current systems hold you back from your global expansion goals, then it’s time to switch it up and make sure your company is ready to chase its potential, whether that’s locally or globally.

 

ERP assessment in a few simple steps

STEP 1 Preparation is key

Implementing an ERP solution will cause a 360-degree change in your way of working. For the better, of course, but it’s a change your company and employees need to get used to. Your team needs to be fully committed to this task. Being prepared for the entire process will help focus on the results, keep your team motivated, and prevent unexpected situations. During this step, you should ask yourself a few questions:

1. What is the current efficiency of your operations and how will/can an ERP solution improve this?
2. How does your inventory management look today? And how will this look when using ERP? What will be the impact of accurate forecasting, knowledge of real-time data and better warehouse management? 
3. What will happen if we have more transparency throughout our entire sales process? How will this help us grow? 
4. What will be the impact of real-time data concerning production costs and sales on our growth?

STEP 2 : What do we expect from an ERP?

In this step, it’s time to determine our goals and needs. When defining your goals, you automatically think about what it is you expect from your ERP implementation, and which challenges this will solve in the short and long run.

You need to determine and map out the future of your company and all the current processes, as well as  determine how ERP will improve each of these processes. 

Don’t forget to establish your specific needs, which will translate into your company’s most indispensable ERP functionalities.

STEP 3: What is our budget?

Considering your needs and goals, you can now measure how large of an investment you might need, or how much you want to spend on a potential solution. During this step two important calculations must be considered, being Total Cost of Ownership (TCO) and your Return On Investment (ROI).

STEP 4: Time to review your options

Your business is completely ready for implementation and has determined its goals and needs when it comes to implementing an ERP solution. Now, it’s time to look at all the possible solutions and find your perfect fit. In this step, you will have to make a shortlist of potential vendors with each their benefits and shortcomings.

STEP 5: Only settle for your perfect fit

Your previous list has been shortened to only a few ERP solutions. The hardest task here is to choose the one that perfectly matches with your goals, needs, and overall business philosophy. Before, making a decision ask the sellers/developers for a demonstration and involve the most important people on your team.

Don’t be afraid to ask the following general questions:

1. Can the solution solve all, if not most, of our needs, support our growth and streamline our processes?
2. How much will the implementation cost and how will this be invoiced?
3. How does the service after implementation look?

Industry-specific questions:

1. Do you have industry-specific knowledge about the challenges your industry faces?
2. Do you have previous experience with a company that looks like yours and will you be able to assist our very specific needs?
3. Do you have any similar cases from the industry?

STEP 6 : Evaluate deployment flexibility

One final step, before deciding on a suitable solution is to see how flexible your ERP solution will be. You must establish the limitation of your ERP in time and functionality. Can your solution grow when you grow, and how long will this solution last? For example, cloud-based solutions, in contrast to on-premise ones, have more flexibility and scalability options for the future. Make sure you weigh in the strengths, and limitations of all deployment models and choose the one that suits your business's bottom lines.

Choosing an ERP solution is one of the most important decisions your firm will make, as it will have a long-term influence on your company's success. Take the time to go through the entire assessment approach and make the effort to conduct a thorough and comprehensive examination. It will only help you to be well-prepared and choose the software that is a perfect fit for your company.

Do you want to know what a industry-specific ERP solution such as NORRIQ has to offer? Then don’t hesitate to ask one of our experienced consultants for advice:

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