How to Know if You Are Selecting the Correct Software

April 22, 2010
Ten tips to run a disciplined selection process.

Choosing the right manufacturing ERP software is tough. There are hundreds of options, technical jargon is confusing and a mistake can be costly. However, selecting software doesn't require in-depth technological knowledge. You simply need to roll up your sleeves and run a disciplined selection process. In this brief guide, we review ten best practices for selecting manufacturing enterprise software. Afterwards, you'll be ready to start your software search in earnest.

1. Take Ownership of Selection Process
Your manufacturing software will impact most every aspect of your business, so this is not a decision that should be delegated entirely to a junior staffer or the IT department. This process demands the management talent, process expertise and perspective of business users, in addition to IT. What if your IT staff selected a system based on an underlying database they like, but failed to recognize that the system accounts for inventory differently than you do? Take ownership of the selection process to avoid buying the wrong software.

2. Determine Your Needs
Too many buyers let the software salesmen drive the process and determine their requirements. Only you know how best to run your business and where you need to automate for the greatest return on investment. Therefore, it's critical to map out your core business processes and feature requirements. Do you simply need production planning and scheduling, or integrated accounting, customer relationship management (CRM) and a manufacturing execution system (MES)? Build an exhaustive list of features and then prioritize them based on what will give you the most bang for your buck.

3. Get the Right Software for Your Industry
Most enterprise resource planning (ERP) products are designed to serve a range of manufacturers; others are for specific modes and industries. There are benefits and drawbacks to each approach. The narrow focus of a specialty ERP vendor allows them to design software around the needs of manufacturers within their target market. At the same time, specialty vendors may be challenged to generate enough revenue to support the wide range of ongoing development and infrastructure required by client demand. Large, broadly-focused vendors may have more resources and broader reach, but are not always specialized in your industry. The best vendors will have well-developed functionality for your industry.

4. Integrate the Enterprise over Time
Consider how you want your system to support production, financials and logistics. Do you want all of these functions in one complete suite, or should your MRP interface with your existing accounting systems? There are advantages to managing all functions in a single system. However, many manufacturers have already made significant investments in their accounting or supply chain management systems. Integration may suffice.

5. Assess Ease-of-use Carefully
Manufacturing is complex enough without software making things more difficult. Therefore, it's critical to find a system that makes your process easier, not harder. The system must be highly intuitive and easy-to use. The simplest way to evaluate ease-of-use is to carefully assess a demo of each product you consider. Try to manage a common process such as generating a bill of materials. Did you figure it out right away? Features that can augment ease-of use include on-line help functions or a "training mode" that lets new employees learn without acting on live production activities.

6. Ensure Strong Support and Maintenance
The support and maintenance you receive is just as important as the software. Some leading vendors provide support 24 hours a day, 7 days a week. You will likely need weekend and nighttime support, assuming production continues around the clock. Consider also how support is delivered. Are you up for talking to foreign call center staff? Do you want help on-site? And remember, when it comes to software, support isn't just technical assistance; support often includes maintenance releases -- new features, bug fixes and minor upgrades.

7. Pay Close Attention to Vendor Viability
ERP software isn't all you're buying. You're also entering into a long-term vendor relationship. It's critical to assess the software company's viability -- not just if they survive, but how... Sure, healthy margins in the software business keep most established vendors afloat, but what about the vendor's "strategic viability" in a market that is poised for dramatic consolidation? Can and will they invest in new development? Will they continue to meet regulatory requirements and support new standards? These outcomes could have big implications for you.

8. Be Realistic About Your Budget
With software prices ranging from tens of thousands to millions of dollars, you can narrow down your software search based on price. However, screening by budget upfront will limit your ability to find the right system. While software does not have to be expensive to be good, never buy on price alone. The more sophisticated buyer will consider the value of the system -- as measured by return on investment -- rather than thinking in absolute dollars.

9. Understand your Deployment Options
"Deployment model" refers to where the software is installed and how it is accessed. There is a substantial shift underway in how software is deployed, so understanding the various deployment models is important. A traditional "on-premise" system (aka "client/server") is installed on a server at your office, as well as on each user's computer. Meanwhile, in the newer "Software-as-a-Service" model (aka SaaS or "web-based"), the software is hosted in a secure, off-site data center and users access the system through web browsers. The SaaS model is similar to using a website. There are also hybrid models, such as when a client/server system is deployed with the "server" software hosted at the vendor's data center.

10. Plan your platform technology needs.
While we recommend that the software you select should drive the technology on which you run it, don't forget that these components are often highly interdependent. The right software application for your business may only be compatible with certain operating systems, databases and hardware. Ask each vendor about their platform support requirements, along with recommendations on configuration and deployment techniques.

Don Fornes is CEO of Software Advice, a free online resource that reviewsmanufacturing software systems.

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