Thursday, June 13, 2024
Information Technology

ERP Selection Criteria

Undoubtedly, the most important building block of information technologies in companies in terms of software is ERP – Enterprise Resource Planning software. Since it is the building block, in fact, most processes and software in the company are constrained by the flexibility, rules, and integration capacity in ERP. For example, some processes, which are the most basic need, may not be implemented in the company due to some constraints in the ERP. When all these situations are evaluated, the choice of ERP is a very big decision for the company, and the decision should be examined from many aspects during the selection. To mention mainly the ERP selection criteria:

Cost: Unfortunately, one of the most important criteria is cost. Especially for software that bills license/license maintenance in foreign currency, the total cost of ownership is very important in the long run.

Scope: Which processes will be managed within the ERP and which processes will be excluded from the ERP should be decided before the project starts. After the scope is determined, appropriate software selection should be made according to the scope.

Flexibility: Flexibility in ERP is very important, especially for industries and companies that require flexibility. Software with strict rules will not be suitable for such companies.

Industry Experience: Considering the dynamism and process differences between the sectors, referenced suppliers and software that have done projects in the same or similar sector are always advantageous. For example, it is highly risky for a retail firm to choose an ERP that has no previous retail application.

Current and medium-term Firm Size: I think one of the most important criteria in choosing an ERP is to choose software according to the size of the firm. To give an example, domestic ERP software developers do not want to sell to more than a certain number of users or companies over a certain size, because they know that their products are not suitable for companies of this size. Similarly, I think that global ERP software (SAP, Microsoft Dynamics AX) is not suitable for small-scale companies that have not yet been institutionalized. The software selection should be made by evaluating the current and 5 years future size of the company.

Company Profile: User profiles within the company and employee profiles in the software support teams should be at the level of knowledge and readiness to adapt to the new ERP.

Continuity: The continuity of the software and the supplier is a criterion to be considered.Software/suppliers that are not financially sufficient or that do not have enough customers may cause you problems during implementaion or after your project.

Of course, many more criteria can be evaluated in the selection of ERP, I think these criteria are the first ones to be evaluated.

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