How to Choose an ERP to Manage a Small Business

Here are 5 steps to follow to help ensure a smooth and (relatively) hassle-free ERP selection process:

1- Find out what’s out there. When you’re ready to take the plunge, you first need to research the market to better understand what your options are, in terms of features, functionality, and price. While reams of information are available on ERP software providers’ websites, it’s easy to get lost in the technical and marketing jargon, but you can still get a good overview of their product offering. Check out software review websites. Super helpful, you can read about the various vendors, what they’re selling, what their customers have to say, and even compare functionality and price amongst leading competitors. 

2- What does your business really need? To answer this question, you’ll need to draw up a detailed list of your “real” business requirements – what you need today, and what you expect/anticipate for the future, as your business grows. Compare your list to the various ERP vendor offerings, and determine who measures up, best. Discuss your actual business needs with other managers, such as R&D, Sales, and Accounting, to gain insights on efficiency and productivity, that will help you create a shortlist of viable contenders.  

3- Ode to the RFP. Many ERP vendors will help you create your list of requirements, and provide you with a Request for Proposal (RFP) template. The RFP will typically include a list of features and functionality for the ERP system you’re interested in. It’s a practical, useful and very helpful tool for you to understand just who your prospective vendor is, and what they have to offer. Once you have your current (and future!) needs clearly presented, you can use this RFP to assess the strengths and capabilities other vendors as well. 

4- Dollars and “Sense.” Without question, the cost of an ERP system is a key determining factor. Since small businesses typically have limited IT budgets, it’s important to understand the various pricing models available (and there are many!). As a small business, you may want to consider cloud-based ERP over an on-premise system that requires extensive hardware and related infrastructure costs. Cloud ERP offers lower capital requirements to access innovation, better and faster scalability, and automatic upgrades. Bottom line? You’ll be able to trim your operational expenses with dramatically shorter deployment time, and achieve faster ROI.

5- It’s time to choose. When you’re ready to move forward, with a detailed list of requirements and costs, you can draft a shortlist of potential ERP vendors. But you’re not done yet. You’ll want to ask each of your prospective vendors to demo the system for you, so that you can see, first-hand, what you’re about to purchase (or not). Be sure to provide a “demo script,” to view your business’s actual use case in action. You’ll also want to ask colleagues and peers, if available, which ERP systems they use, and if they’re satisfied, both with the software itself, and with the vendor’s post-sales support and service. Lastly, request a list of reference customers – and contact them!