How to choose a new ERP system
Selecting a new software system for your business is no easy task. Here we take a look at the major considerations you should be aware of before choosing a new system
First off, what is an ERP system, and why might I need one?
ERP stands for Enterprise Resource Planning, and an ERP system is the software that allows businesses to perform everyday business functions, like buying, selling, stock management, customer relationship management, financial management and so on. They can be used by businesses of all sizes, and can have an enormous impact on efficiency, process and profitability.
Merchant businesses, wholesalers, stockists and importers usually have fairly complex business management requirements that can be made easier, faster and more accurate using a good ERP system. Using one system for everything has many advantages – it ensures that all the different areas of the business are linked up, meaning you have a better idea of what’s happening where. That in turn lets you provide better service to customers, manage availability and ensure your workforce is deployed in the way it is needed.
So chances are, your business could benefit from using an ERP system – but it’s absolutely vital to choose one that suits your business. ERP solutions are not cheap and they will affect everyone in your business, so it’s incredibly important to consider every aspect before making your decision.
You may well already have an ERP system in place, and be quite happy with it. But we would encourage everyone (yes, even our customers!) to be aware of the other options available so you don’t miss out on technological advances that could be of benefit to you and your business. ERP systems are not something that get changed often – usually you’d stick with it for 5+ years before changing – but it doesn’t hurt to know what’s happening in the wider world, and make sure you have every tool you need to do better business.
How do I know what system will be best for my business?
It’s never easy choosing a new system. ERP systems are not cheap, so it’s a big decision, and there will always be an element of disruption to your business while it is implemented. But the benefits of getting the right system are massive, so it’s a worthwhile investment.
Keep your ear to the ground
You may not currently need an ERP system, or you may be quite happy with the one you have in place. But we always recommend that you keep an eye on what’s happening in the market. If you have used a particular system for a long time, you may not realise how many great new features and functions are available, so you could be missing out on big time savings and operational advantages. Of course, you may already have the best system around, but it doesn’t hurt to make sure that’s the case. Technology moves fast.
If your system can’t do it – talk to your supplier
No two ways about it: changing ERP systems is expensive and time-consuming. So we would always recommend talking to your existing provider if you are unhappy, or want to add new functionality. They may be able to add features to your existing system that solve your problem. Just bear in mind that sometimes, it’s better to rip off the plaster and go for a whole new system than to continually tinker with something that, ultimately, doesn’t meet your needs.
Can I still use my existing accounts package?
That will depend on which ERP system you choose. Many systems have their own accounts package built in, while others have a more flexible, modular approach, so you can choose to integrate with your existing package if you prefer. Ask the service provider about this up front as it will save a lot of hassle later on, and manage expectation on both sides!
The 10 steps to choosing a new ERP system
Without further ado, here is our 10 step guide to choosing a new ERP system for your business.
1. Work out what you actually need and review your processes
While it might be tempting to leap in and find a solution, you need to spend a bit of time identifying the problem.
Think about the pain points in your business. What do you wish you had more time for? What are the areas you don’t have information readily available on? What are the real strengths and opportunities? Where do you end up spending most of your time – and where would you like to spend it instead?
Having a comprehensive strategy for where you’re going and what you want to achieve will make it much easier for you to select a system that can help you get there. Whether you’re undergoing digital transformation and need to lay the foundations for eCommerce, want to be able to see more easily where you could be working more efficiently or profitably, or simply need to free up time and resource, the right ERP system can help with all of it, so it really is worth taking the time to consider your destination and objectives.
2. Ask around
There is no better way of finding a new system than asking your peers and connections for a recommendation. Asking people who work in businesses similar to yours will usually mean the recommendations are relevant and therefore valuable. But do bear in mind that the best known is not always the best for YOU, so it will still depend on your criteria.
Asking around should also involve searching Google (other search engines are available!) Try to be specific about these searches. Running a search for “ERP system” will return exactly that, but they won’t necessarily be specific to your industry. So perhaps a search for “best ERP system for timber merchants” would be a more relevant way to approach it. And another hint – check the organic results, not just the paid ones – big budgets for advertising don’t always equal the best service, so make sure you dig a little deeper into those results.
3. Make sure the system does what YOU need it to
There are many, many ERP systems out there and chances are, several of them can perform the basic functions you need them to. But it’s really important to select the one that suits your industry, and your individual business, best.
For example, some of the best known ERP systems (SAP and the like) may be powerful, comprehensive options. But they aren’t necessarily geared to your industry. Find a system that caters to your industry – timber merchant ERP, builders’ merchant ERP, steel stock ERP, plumbing supplies ERP – whatever that industry is, choosing a system designed to cater for it is likely to save you a whole heap of work trying to customise a generic system.
An industry specific merchant ERP system should enable you to work with the metrics, product types, delivery methods and split payment requirements common to merchant businesses. You should be able to, quickly and easily, switch between packs and units, lengths and weights, currencies and locations. You should be able to perform functions which are very specific to your industry easily. Check whether the providers work with other businesses like yours – and not just the same industry, but the same sort of size too. Service is a big part of choosing an ERP provider so make sure they are geared up to give you the level of service you want; for an achievable price.
An added word of caution; don’t assume that a new system will have the same features as your current system, or that it is as easy to use. If you have been attracted to a particular system because of a specific, standout feature, just make sure that the rest of the system does what you need it to as well. It’s all too easy to be lured to a new system by a few snazzy features, assuming that the basic functionality will match what you already had, but that isn’t always the case. However good the standout features, the day-to-day functions are probably the most important thing to be confident about.
4. Look at the whole cost – not just the up-front offers
ERP systems are expensive, but a great system should be able to not only pay for itself in terms of efficiencies and rate of sales, but actually increase profitability, reduce waste and improve workforce productivity.
There are a number of different cost elements involves with ERP systems and it’s really worth looking at the ongoing cost of a system – not just the up front price. You need to know exactly what is included; does the price include onboarding, training and implementation? How many users does it cover? Does someone who works in the yard on stock control cost the same as the Managing Director? Is there an additional service charge? Do you get unlimited helpdesk access as part of the price? Will you need specific hardware to run the system? These are all really important questions to consider when looking at the lifetime cost of your ERP system.
5. Consider your workforce and their everyday experience
ERP systems have traditionally been complex systems, which take a long time to master and are not always particularly enjoyable to use. These days, technology has moved on significantly and you should demand far more from your ERP system.
It really does pay to choose a system which is easy to use. Not only will staff be able to get to grips with it faster, meaning less disruption during the implementation phase, but it will also improve their day-to-day experience.
A system which is easy to use will get used more often by more people. Therefore more information will be added minute-by-minute, meaning the accuracy of the system improves, it is more current, and the quality of information is better. Better information, more readily available, means easier and better decision-making throughout the business, with measurable, quantifiable results.
6. Get as much experience of a system as you can before making your choice
Not all ERP systems can be trialled prior to purchase, but if there is an option for a demo, make sure you take it! ERP providers will always promise systems are straightforward and user-friendly, but if you need a degree in computer science to figure out how to upload an order or email an invoice, it’s probably better to know that before you’ve forked out a bundle for it!
Again, ask around, read the reviews and case studies and get as familiar as you can with a system. Many ERP providers will be more than happy to put you in touch with an existing user so you can get a first hand account of how it works day to day.
7. Check the system can meet your future needs, not just your current ones
Technology moves fast, and so does business. Having a system in place that meets your needs today doesn’t necessarily mean it will still be meeting those needs in five years’ time. While ERP systems are not something people tend to change often, it’s always worth looking around every few years to make sure you are still getting a competitive service, product and price. A good ERP system should be able to help you deliver your long term business objectives as well as optimise day-to-day processes, including sustainability, employee engagement and growth strategies.
Digital transformation is a hot topic and more and more merchants are switching their strategies to include online. Taking on a new system that will be able to grow with your business and expand to meet those needs is important – anything you can do to reduce the need and frequency of changing systems will pay dividends in the long run!
Remember, ERP systems should cover all the core elements of your business operations but that doesn’t mean you have to use (or pay for!) everything. If you trade materials but don’t have a stockholding, you can still benefit from an ERP system – but there might be a deal to be done on the price. Similarly, if you are planning to expand, you will need to take on more users as you go, so check that you can pay flexibly to take on individual people doing specific roles, rather than block-buying user groups or having to pay the top rate for a user who might only need the transport function.
It's also worth considering accessibility, especially given the events of 2020. Can the system be easily accessed remotely and allow flexible working? Your system should be able to help you deliver your services and business objectives and play an active role in making every day easier for every member of your team.
8. Make sure you get along with the ERP provider
This is more important that you might think. Your ERP system is a critical part of your business, so it’s important to work with people who share your vision and who you will be happy to work with. You are likely to be working with them for some time, so make sure you can see yourself having a good relationship. Are they responsive and flexible? Do they seek bespoke solutions, or try to simply channel you into a pre-existing route? You need to know you can have frank conversations, be heard and respected, and get the level of service you want. You don’t want to be “just another customer” – so choose a supplier who you click with, who understands how to help you succeed, and who works with other merchants on a similar scale to yours. Chances are you’ll be speaking with your ERP provider team fairly often, so it really does make a difference if they’re on your wavelength and are able to listen and react to what you are saying. Responsive, diligent service is worth a lot – so it pays to get to know the people behind the product.
It’s also worth considering whether you will be a “big” customer to your ERP provider. If they’re not used to dealing with businesses of your size, it’s worth making very sure they have the capacity to adequately service your operation. Conversely, if you are a small merchant just starting out, you want to know you’ll get just the same level of service as a much bigger organisation, so ask the awkward questions - and think the answers through carefully!
It can also be quite telling how long a provider has been in business, and whether they have a good understanding of your industry, or just the software. It's best to choose a provider with plenty of experience on both sides, to match practicality and functionality with the best technology.
9. What’s the ongoing service package?
It would be great to think that you could just buy a system and be done with it. But we all know things are never quite that simple. Technology is brilliant, but if issues come up you need to know you’re covered and can get help fast.
Check what level of helpdesk service is included in your package, as well as training. Many providers offer a certain amount of training up front, but it should be possible to get more in-depth coaching later on too, once you’ve got to grips with the basics, or to support new starters. Some providers include service in the price of the product, while others charge separately, either annually or ad hoc, so make sure you know what level of service guarantee you have.
10. Shop around
Obviously we’d love you to just sign up for Merchanter straight away, but actually you need to be sure you have the right system for YOU. So take all the points above into consideration, take your time, and shop around. You need to be confident you’ve got the system that suits you, your staff and your business the best. An ERP system can have a huge impact on every aspect of your business so it really does pay to look around and weigh up all your options.
So to sum up…
Ultimately, it will come down to what you need your ERP system to do and how well it performs those functions. You can afford to be picky – this is a big decision and one that has an impact on everyone in your organisation, so demand more! Choose a system that will be easy to work with every day, that your staff will enjoy using, and which will be able to evolve with the needs of your business. The very best systems enable modular expansion so you can seamlessly add functionality and users as needed, and will make information easier to access, analytics more meaningful and useful, and processes more efficient and profitable. All that, and with friendly, professional service thrown in.
If you would like to try the free, online demo system of Merchanter for yourself, or have a guided demo, just leave your details here and we’ll be in touch.