If you’re a non-IT professional exploring the realm of ERP software for the first time, or looking to replace an underperforming system, the journey ahead probably fills you with fear and trepidation.
You might need ERP access for a dozen of your staff, or perhaps you can get away with a single user package. Should you be looking forward to spending around £10,000 for an entire system, or will this be a £200,000 knock to your budget? Which of your business functions can be integrated into an ERP system? If you’re going to spend a big chunk of your budget on ERP software, what is the return on investment (ROI) you should expect?
With so many questions, you might long to hand the entire purchasing process over to a consultant. However, as an SME, the additional expense of hiring an ERP consultant could add strain to an already tight budget. If this difficult scenario resonates with you, we invite you to make use of the list of questions below and our accompanying eBook on how to buy ERP and accounting software. These resources include some hard ‘inside’ information into the world of ERP, to give you the confidence to whittle down your options to a shortlist of well-matched software and providers without the help of a consultant.
7 Essential Questions to Ask Potential ERP Providers
Do you have a longlist of potential ERP providers that’s made up of recommendations and industry leaders? While positive client reviews and brand credibility go a long way towards illustrating the reliability of a vendor and the value of their software, it’s important to find a match for your particular business and industry needs. Here are the essential questions to ask when looking for a perfect fit:
1. Do you have experience in our industry?
Are you searching for an ERP that ticks all the boxes on your list of everyday operational functions? If you’re in a niche industry, chances are that it won’t be easy. From our experience, you can expect to get some blank stares from generalist providers when mentioning some of your most essential requirements.
If you’re a smaller business, contracting a provider to build you a bespoke solution is probably out of your budgetary league. What now?
Start by identifying an industry-specific provider that meets your unique requirements as part of their standard offering. Once you’ve got specific software in mind, a provider with the kind of attitude you’re looking for will be willing to customise this package to suit your business-specific processes and data. Not only will you get the industry and business-specific functionality you need, but you’ll benefit from the provider’s experience and understanding.
2. Is your system cloud-based or do you install on-premise?
What is Cloud computing and how does it affect ERP functionality? You’ve been using Cloud computing all this time, unless you were living in a cave somewhere, and that cave somehow didn’t have an Internet connection.
Putting it in simple terms: Cloud computing is the ability to use the power of other computers (located somewhere else) and their software, via the Internet (or sometimes other networks). This means you don’t have to go and buy some super powerful gigantic computer system of your own or an entire software package. By utilising the Cloud, you get access to these systems at a pay as you go rate.
3. Do you supply mobile apps?
One of the greatest benefits of cloud-based software is that, in theory, you can access your business data from wherever you are in the world, as long as you’ve got an Internet connection. The same benefits apply to mobile ERP:
- Mobile ERP gives you access to business data and reports from home, from a customer site or at a Board Meeting.
- Your iPad or iPhone can be turned into a working mobile office.
- Mobile ERP empowers your sales team to operate optimally while visiting client sites or meeting prospects in coffee shops.
- Mobile apps enable remote operational procedures such as capture customer signatures for deliveries or completed jobs.
4. How frequently do you update your software and are updates included in our package?
Your business might not be chasing after the latest software innovations, but your software package should at least keep track with changes in regulations. Best of breed solutions should keep you up to date with industry innovations as well. Make sure you know which upgrades are included in your package and how often you’ll have to fork out additional funds.
Take note: While an improved software system could be worth the cost if it generates business value, you shouldn’t be forced into buying an entirely new system again.
5. Is the system fast enough and big enough?
Most purchasers forget to specify any speed for the system they buy, even though a crucial benefit of computerisation is speed. System speed generally declines as data volumes increase. That nice quick demonstration you saw online: how much data do you think the demonstrator was holding in their system? Now consider your own system that operates in the real world. How fast is your data retrieval time, really?
Waiting time of only a few seconds can be frustrating. If you have scores of records (stock lines, customers etc.) it would be wise to insist on seeing a demo of the software operating on a comparable database.
6. Tell me about your hardware backbone
The software is important, the hardware less so. Nonetheless, it’s important to make sure that:
You don’t get locked-in to the provider
Ask if there are alternative sources of supply for the hardware, support, and service.
The hardware is scalable
Make sure you won’t have to write off a large portion of your initial investment if your business expands and your ERP has to be scaled accordingly. Ask how much it would cost to double/treble (whatever your plans are plus a bit) the number of users, the storage capacity, the number of sites and other variables that might change over time.
Test this issue from a different angle; supposing you do break all sales targets and have to replace the main system unit, how big a proportion of your initial investment does that represent?
Their policy on hardware upgrades is reasonable
Your hardware only really needs to be up-to-date enough to ensure that the system is quick enough, has enough expansion capacity, and that the spares are available and are likely to continue to be available. Upgrading to the latest hardware technology within a week of launch is probably unnecessary.
The software is Microsoft compatible
We can’t leave the hardware issue without saying that if you don’t choose Microsoft compatible hardware – why not? Not only does Microsoft dominate the industry, but school-leavers are also rarely taught to use any other type of system.
7. What level of support will you provide?
Are you an IT professional? Does your business have an in-house IT team? If not, you want to be sure that you’ll be getting all the necessary support from your provider. Ask potential providers the following questions:
Who is on the support lines?
You need to be able to speak to the most suitable person. Beware of efficient-sounding arrangements whereby "two specially assigned technicians will be introduced to you and your system..." You need an industry-specific consultant that understands your company’s needs from the outset. This isn’t always possible for generic ERP providers but should be expected from bespoke outfits.
How quickly do they respond to urgent queries?
Support calls are often for general, non-urgent queries. But occasionally, if not always, you need rapid action. How long will it take to get through to a human that can provide personal support?
What’s their definition of a ‘response’?
Careful here: many companies happily promise a specific ‘eight-hour response’, for example. Court cases define a ‘response’ as ‘picking up the telephone’. If your definition of ‘response’ entails some level of solution to whatever problem you’re experiencing, you may be disappointed.
You’d be amazed at how many computer engineers drive to client sites knowing darn well they’re unable to fix the problem but have to visit the site immediately, just to satisfy contractual terms.
What’s their policy on replacement equipment?
Once they've reached your office inside the response time, they could take weeks to fix the fault without breaking the contract. Find out what equipment their engineers have with them, ask if the company holds standby replacements for servers and workstations. Most don’t.
How do they handle remote support?
This allows an authorised user to see and resolve a problem without having to ‘talk you through’ some convoluted computer commands by telephone. If remote support is the only option, be careful in taking it unless it's cheaper.
What charges are included in your support package?
Disaster Recovery Insurance (DRI), for example, is an additional charge for worst-case scenarios when you might need urgent support. DRI is usually a rip-off if you have system support and maintenance from the same company. Unless you require special standby services, you shouldn’t need it as normal business insurance should cover theft, fire, and wilful damage.
What’s their process for escalating key problems?
Escalation of critical issues shouldn’t be needed too often. Yet you should be able to get through to a Director, or the equivalent, with the authority to ‘make something happen’ above and beyond the strict terms of the small print when it’s necessary.
The next step in buying ERP software
Once you have your checklist in hand, telephone interviews will be sufficient to narrow it down to a shortlist. Suppliers should be able to answer promptly, grasp your needs and offer ballpark costs.
Whittle your list down to the providers that have answered your questions adequately, and invite them to visit your premises. Some people miss this stage and go straight to demonstrations. A meeting at your site first will help you to show areas of your particular interest. Even a brief walk around your site will help a supplier to gain some background to your business. A good supplier should welcome the opportunity, or even insist!
To learn about how to evaluate suppliers during this site visit and how to get the most out of your ERP demo, download our eBook on how to buy ERP and accounting software.
Do you have additional questions about choosing ERP solutions for your business? Add a comment below or tweet @UKERP with your queries – we’d love to answer them!