In a fast paced business world, industrial distributors need a system in place that can help streamline their operations. Enterprise resource planning (ERP) systems are invaluable tools that help industrial distributors to efficiently handle their day-to-day administrative operations.
The right ERP system will meet your unique needs – improving your efficiency and coordination by connecting core business functions and providing a single stream of data to ensure every department is on the same page.
Selecting the right ERP for your organization can seem difficult at first. It requires businesses to take a personal look into how they operate. With an extensive amount of ERP solutions on the market, you must put in a careful thought to find one that not only supports your business operations today, but scales alongside you as you grow. To make this task easier, let’s look at five tips for selecting the right ERP system for your business.
5 Essential Tips to Choose the Right ERP System for Your Business
Determine Your ERP System Needs
Before you decide on an ERP system, you need to evaluate your business and determine what areas need the most help. It’s crucial to the success of your ERP implementation strategy to determine the features and functions your business needs in an ERP system. When considering options, company leadership should balance present pain points with potential future needs – ensuring you select a system that will grow alongside you. Certain ERP providers will provide expert support to streamline this process.
If this is your first ERP system, you should consider a comprehensive review of your business processes and workflows to determine what should be included in the new ERP and which processes should stay independent. Your goal when conducting this review should be to determine what problems you are trying to solve and how the system will help you achieve that.
Areas to consider when determining your needs include:
- Accessibility: You need to determine what team members will need access to the software and in which ways they will need access to it. If your team needs mobile access for order entry or inventory management, the software should be tailored to meet that need.
- Accounting: Managing and reconciling both estimated and actual costs is one way for distributors to control their margins. You should consider a system that will meet your order entry and processing needs.
- Analytics: Successful companies need to know how their business is doing, down to the granular level. They should also know how they compare to similar companies in their industry. When considering an ERP, you need to determine how much visibility you should have in terms of sales, production, and procurement.
- User experience: When deciding which teams can benefit from an ERP system, you should consider ease and how it can impact the productivity of your employees.
Audit Your Existing Applications
When determining which ERP solution is right for you, consider what is and isn’t working in your current business processes and applications. The best way to get a complete picture of your current workflows and bottlenecks is to complete a business audit. This process will help you to identify current silos, look for legacy tools that need to be replaced, and even find tools that are no longer utilized.
If you decide to continue using existing applications for certain business processes, you will want to consider an ERP solution that can integrate with those applications. Certain ERP systems can be integrated into common business applications such as ecommerce storefronts, point-of-sale (POS) systems, online marketplaces, and vendor management systems. While this option is a possibility with certain ERPs, other solutions perform at their best if you fully integrate into the ERP’s ecosystem.
Determine Your Budget
The price of implementing an ERP system will vary depending on a wide array of factors such as vendors, number of modules, whether you utilize a virtualized server or run the application on-site, and the number of licenses needed.
Most ERP providers offer different pricing based on the features each user needs access to. This allows you to customize your system based on your unique situation – that way you are only paying for what you need.
The type of ERP system you choose also has a hand in potential cost. Unlike the subscription price model of a cloud-based ERP solution, on-site ERP systems tend to have additional upfront costs and installation fees, however the overall total cost of ownership is lower than a cloud-based solution. You can request with your ERP provider a total cost of ownership evaluation prior to making your decision so you see the full financial impact of each solution.
Higher costs do not necessarily equate to a better system. Certain ERP solutions are more expensive as they have features you don’t need or won’t likely use. This is another reason why you should conduct a thorough needs assessment before deciding on an ERP partner.
Consider Which ERP Provider is Right for You
There’s a wide array of ERP software options to choose from. While it can feel overwhelming at first, you should attempt to narrow down which vendor has the right offerings that meet your unique needs. A few items to keep in mind when looking through potential providers includes:
- Ability to Customize: Once you decide what pain points you are trying to fill, you should find a provider that can deliver a custom experience to meet those needs.
- Ability to Grow: Your ERP system needs to be able to grow as you do. When selecting a vendor, consider how they can meet your needs for years to come.
- Niche: Are you an industrial distributor or build-to-order manufacturer? Then you should consider working with an ERP provider that caters specifically to your industry – delivering insight that other providers can’t match.
- Training & Support: When implementing an ERP system, you are launching a potential multi-year partnership with the provider. You should consider how their post-implementation support and training can benefit your business.
Once your team has narrowed down your list of potential vendors, the next step is to determine which of those choices provides an effective and efficient implementation process with continuing support. While many vendors can offer a quick launch time frame, it’s important to consider all phases of the implementation process, from pre-launch and post-launch to ongoing support.
Start Your ERP Journey Today with TrulinX
Our TrulinX business management platform is specialized for industrial distributors, build-to-order manufacturers, and fabricators of every size. With our niche features, supplier integrations, and industry leadership, TrulinX is specifically designed for your distribution business. Ready to improve your workflow through an innovative modern ERP software? Request a Demo to see how we can help you make that change to your business.