Manufacturers often struggle to find exactly the right ERP system for their needs. As Aberdeen Group’s Nick Castellina recently wrote: “Finding a needle in a haystack is hard, but the task pales in comparison to finding a specific needle in a pile of needles.”
In other words, having so many seemingly similar options available to you actually makes your job tougher.
Because ERP systems touch so many areas of the business, it’s crucial to get this decision right. And because ERP systems are generally expensive, you probably won’t be able to rip yours out and replace it any time soon if it ends up disappointing you.
If you’re not sure where to begin your search, here’s a suggestion: Take a cue from some of your leading peers.
Three Top Criteria for Your ERP System
Seeking to eliminate the mystery from the ERP selection process, Aberdeen Group recently surveyed 130 manufacturers to find out what they looked for in an ERP solution. Participants could select more than one response. Three selection criteria far outpaced the rest: Ease of use (50%), Functionality (46%), and Total cost of ownership (43%).
It may be mildly surprising to see “ease of use” top the list—but it’s also quite encouraging. Manufacturers realize that all the functionality in the world isn’t going to help you if your end users are struggling to navigate the interface and complete business processes in a new environment.
Let’s face it: People are resistant to change, and people who work at manufacturing organizations are no exception. You may still have some business processes that revolve around spreadsheets and email—processes that require too many steps and are far too error-prone. But they’re the processes people know—and if your employees are put off by the interface and workflow of your new ERP software, they’ll cling to the tried-and-true-and-inefficient rather than embrace your new solution.
Of course, functionality is still important—very important, as the respondents confirmed. But it has to be presented in a way that users will appreciate.
As for total cost of ownership, it’s not surprising to see it listed as participants’ third-leading criterion. What’s interesting, though, is that they had the option of choosing “Software costs” as a criterion, and yet only 21% of respondents did. Today’s manufacturers have obviously wised up to the fact that it’s not all about the initial sticker price of an ERP system—it’s about what it’s going to cost to run that platform over the next 10 years or more.
Some manufacturers, of course, will choose cloud ERP largely as a way of avoiding major capital expenditures on software licenses and system hardware. Others may prefer to pay once up front for their software, and will install an on-premises system because they’re unaware that some vendors let you purchase cloud ERP for a one-time fee. In any case, manufacturers should look beyond the initial license fee or subscription agreement to determine how customizations, maintenance, and support could affect their total price tag over the lifespan of the software.
ERP’s Role in the Modern Manufacturer: Supporting the Needs of Industry 4.0
Is your manufacturing operation looking at the latest Industry 4.0 technology? Here’s how to make sure you’re really ready – download free whitepaper.
The Bottom Line
In the end,
- User-friendly interface.
- Strong functionality.
- Reasonable cost of ownership.
Let these serve as your “big three” criteria as you research and evaluate ERP systems for your manufacturing organization.